Dealer Accessory Ordering Options Tutorial - with fixed slides - 6-25-18

Transcript

1. Welcome To Premiere Testing Dynamics’ Tutorial & Test Center This Class Was Created Specifically For GM ADI TSMs The Subject of this Tutorial is “Dealer Accessory Ordering Options” Premiere Testing Dynamics
2. We will begin with a tutorial and end with a quiz to test your knowledge on the subject. The passing grade for this tutorial is 80%. Once you achieve a passing score, you will be certified in this subject. Make sure to print your Certificate of Completion at the end of the quiz. You can proceed through the tutorial by clicking the right arrow when you are ready to proceed. If you need to go back at any time, click on the left arrow of the program which will take you backwards.
3. Dealer Accessory Ordering Options GM Accessories has been one of GM’s largest growing divisions over the past four years. In fact, since only 2014, sales have grown from around $500 million to over $800 million in that time, with growth in excess of 57%. This growth is attributable to many new processes introduced by GM, ADIs and the dealerships themselves. GM and it’s ADI network have worked to introduce various types of practices and processes that make this type of growth possible, including selling processes, pre-loading of vehicles, commission plans for dealership sales people, installation of accessories and the ordering of accessories. In this tutorial, we will focus on the process of Dealer Accessory Ordering and the options they have available to them.
4. Dealer Accessory Ordering Options When a dealer wants to order GM accessories, they have four ordering types to choose from, including: 1. RPO 2. LPO 3. ADI to Dealer (A2D) 4. Direct from GM (ACO) All of these options will be explained later in this tutorial. It is important to remember that a dealership will order accessories using one of these methods based upon the reason they want to order.
5. Dealer Accessory Ordering Options Dealerships order accessories for a variety of reasons and place their order based upon the reason they want or need the accessory. Some of these reasons include: 1. They want the accessories installed at the factory and to appear on the Monroney label. 2. They want the accessories to be installed on the vehicle at the dealership and appear on the Monroney label. 3. They want the accessories readily available for sale in their Parts Department. 4. They want accessories for a specific customer at the time of the vehicle sale that may not be in inventory in the Parts Department. 5. They want accessories installed after the vehicle arrives and prior to positioning the vehicle in the showroom or on the lot with an addendum sticker.
6. Dealer Accessory Ordering Options Let’s take a closer look at the reasons dealerships order accessories .
7. Dealer Accessory Ordering Options Reason #1 - Order the vehicle with accessories built with the vehicle at the factory and appear on the Monroney label. When a dealership orders a new vehicle to be built by GM, they have the option to have accessories added to that vehicle at the factory. When they place this order, it is known as a RPO. RPO stands for Regular Production Option. There are a limited number of accessories that can be ordered as a RPO, but that list can change based upon demand for a particular accessory. Every RPO has a RPO code and dealerships order the accessory by selecting that code.
8. Dealer Accessory Ordering Options Reason #2 - Order accessories when they order the vehicle. These accessories will be installed on the vehicle at the dealership but will appear on the Monroney label. When a dealership orders a new vehicle to be built by GM, they have the option to have accessories installed on that vehicle at the dealership. When they place this order, it is known as a LPO. A technician at the dealership will install the accessories and GM will pay the dealership for the labor to install the accessories. The amount that GM pays is based on the dealership’s warranty rate. LPO stands for Limited Production Option. There are many options with LPOs. Some accessories are bundled together forming a LPO package and other LPOs are single accessories. Similar to RPOs, dealerships order the accessories by selecting than LPO code.
9. Dealer Accessory Ordering Options The ADI is responsible for delivering the LPO accessory to the dealership. Prior to delivery, ADIs place an orange sticker on each accessory ordered as an LPO. By doing so, dealerships can easily identify: 1. The part number of accessory 2. The VIN (vehicle identification number) of the vehicle 3. The dealership’s name and BAC (dealership identifier) 4. Bar code scan representing the GM part number 5. The date of the delivery 6. The name of the accessory
10. Dealer Accessory Ordering Options When a dealership orders an LPO, the following process occurs: Dealership orders a vehicle from GM and includes an LPO The vehicle is built and a Monroney sticker is applied to the window. The sticker includes the accessory ordered as an LPO When the vehicle exits the assembly line, the ADI is sent a notification to deliver the accessory to the dealership When the vehicle arrives, the dealership’s Service Dept. preps the vehicle, including installing the accessory When the accessory installation is complete, the dealership files a labor warranty claim to be paid by GM for the installation The dealership is reimbursed by GM at the GM established labor time x the dealership’s warranty labor rate The vehicle is placed on the showroom floor or the dealership lot and is ready for sale.
11. Dealer Accessory Ordering Options Reason #3 - Order the accessories for stock in their Parts Department. Parts Departments track their daily sales of parts and accessories. They do this so that for accessories that sell at a consistent pace, they can keep those accessories in stock for spot deliveries. A spot delivery is when a customer purchases a vehicle and takes it home that day. If the accessory purchased needs to be installed, the service department will install it prior to the customer taking the vehicle home. Ideally, the Parts Department has the Accessory in stock and ready for install. They may also sell these popular accessories over the Parts counter or through the dealership’s Service Department. These order are known as ADI-to-Dealer (A2D).
12. Dealer Accessory Ordering Options Reason #4 - Order accessories for a specific customer at the time of the vehicle sale. Dealerships who sell accessories to a customer who is purchasing a vehicle (or over the Parts counter or through the service lane) often need to order an accessory that their customer wants, but that they do not stock in their Parts Department. The dealership would order this accessory from their ADI* through one of the following methods: 1. Phone the order in 2. Fax the order 3. Order online through GM’s Accessories Digital Solutions system 4. Place their order with their ADI TSM This type of order would also be known as ADI-to-Dealer (A2D). *Dealership could order any accessory direct from GM, but it generally takes longer and some accessories have minimum order quantities. This type of order would be known as an ACO (direct from GM).
13. Dealer Accessory Ordering Options Reason #5 - Order accessories after the vehicle arrives and install prior to positioning the vehicle in the showroom or on the lot with an addendum sticker. While the ordering of accessories for showroom or lot vehicles can be done as an RPO or LPO, some dealerships choose to “pre-load” a vehicle after the vehicle arrives at the dealership. Pre-load is when a dealership installs accessories to a vehicle to be displayed on a showroom or lot. Any accessories ordered would be referred to as A2D. By doing so, they can: 1. Measure how many of their vehicles are accessorized and how many are not. 2. Install accessories that may not have been available as an RPO or LPO. 3. Maximize profit installing the accessories as a “pre-load” vehicle after it arrives at the dealership. * More on the profitability of ordering options later in this tutorial.
14. Dealer Accessory Ordering Options How does profit begin with the ordering of accessories?
15. Dealer Accessory Ordering Options Much of the dealership’s profitability in accessories is based upon how they order. There are three different profit margins when ordering accessories that dealerships should consider when deciding how they will order their accessories: 1. Dealers that order a RPO will earn approximately 13.6% (from net invoice) on those accessories (9.1% from invoice). 2. Dealers that order an LPO will earn approximately 13.6% (from “net” invoice – 9.1% from invoice) and an install fee, paid by GM, for installing the accessory. 3. Dealers that order direct from their ADI or GM (for stock, pre-load or for a customer) and install the accessory will earn 25% on those accessories when sold at MSRP and additionally, the labor charge to install them. A TSM should always bring attention to these differences when discussing ordering options with a dealership.
16. Dealer Accessory Ordering Options Though there can be a wide difference in the profit margins of varying ordering options, there are reasons for each one: 1. RPO – A dealership earns approximately 13.6%. However, they do not have to involve themselves in the installation of the accessory and the accessory appears on the Monroney label. By appearing on the Monroney label, the accessory can be financed with the vehicle.
17. Dealer Accessory Ordering Options Though there can be a wide difference in the profit margins of varying ordering options, there are reasons for each one: 2. LPO – While the profit margin is the same as an RPO, along with also appearing on the Monroney label and financing the accessory with the vehicle, the dealership earns the labor charge for installing the accessory. GM pays the dealership for the installation using the formula: “GM Install Time x Dealership Warranty Labor Rate” = Labor Charge
18. Dealer Accessory Ordering Options Though there can be a wide difference in the profit margins of varying ordering options, there are reasons for each one: 3. ADI to Dealer or ACO – Either of these options are a method for a dealership to order accessories for Parts Department stock, for pre-loading or for a specific customer’s needs. Charging MSRP for the accessory, dealerships will earn a 25% margin. Plus, they will be able to charge for the installation of the accessories. Additionally, if the dealership is pre-loading, the accessories will not appear on the Monroney and dealership will utilize an addendum to show the accessories and their prices.
19. Dealer Accessory Ordering Options SUMMARY As a TSM, your job is to help your dealerships build, or enhance, their GM Accessory selling process. One of your first steps is to ensure that your dealership understands their options when ordering accessories and providing guidance on the most profitable way to do so. With this tutorial, you should now feel confident to discuss the four ordering types of: RPO, LPO, A2D and ACO, along with the reasons that a dealership would use each one. You should also understand the profit opportunity associated with each order type. Now, you are ready for your “Dealer Accessory Ordering Options” test. Good luck.
20. You’ve Now Completed Your GM ADI TSM Tutorial On “Dealer Ordering Options” Please Now Take Your Tutorial Quiz! Click The “Take Quiz” Button Below To Begin. Good Luck!