By Ben Silver - May 18, 2016
The information age has changed the landscape of business throughout the world. Salvage yards are no different, we’re affected by the availability of our used parts data on the internet, broadening the landscape of salvage vehicle purchasers globally, and the constant tug of war between salvage yards and outside interests attempting to use our data.
What’s the Big Data Deal?
Salvage yards create an immense amount of data that is very valuable to other automotive industries like new parts dealers and insurance companies. Salvage yards log and archive data for all the used parts searches, used parts sales, recycled parts requests, % of time orders are not filled, hit rate on used parts searches, miss rate on used parts searches, and the list goes on. Savvy salvage yards utilize this data to drive there wrecked vehicle purchasing, sales strategies, and inventory processes.
Priced for Competition
As an Owner of a salvage yard in Denver, I think it’s paramount to display our inventory on any channels that are available to us. This means putting our part data, i.e. part type, price, etc., on the internet, and in some cases paying websites to display our used auto parts data. Most other salvage yards in Colorado are doing the same thing. So our customers, are now accustomed to seeing live information on parts availability and price on the internet. This competition has driven price of used and recycled auto parts down over the last 5-10 years.
Purchasing Wrecked Vehicles, A Global Endeavor
Furthering the affect of technology on salvage yards, is the fact that nearly anyone from anywhere in the World can access insurance vehicle auctions in Denver and purchase wrecked cars. You can imagine how much more competition there is for auto salvage and wrecked trucks given this fact.
The Lean Salvage Yard
In the current landscape, we’re seeing more and more salvage yards going out of business every year. The changes in the market and the dynamic competitive nature of the salvage yard business has taken it’s toll on many business. Salvage yards have to operate by the numbers. Progressive salvage yards are evaluating hundreds of metrics quarterly and making fine adjustments to run as lean as possible. It’s not the wild, wild, west anymore. You have to be measured and well planned to continue to grow and thrive as a salvage yard in todays market.
Ben Silver is the CEO of Central Auto Parts and acting President of the Colorado Automotive Recyclers. When he's not "auto blogging" or pushing Central Auto Parts to new heights, he's chasing his young daughter around the house or tying flies for the next great fishing adventure.