The supply chain from manufacturers to distributors to auto businesses and then on to customers is continuous a balancing act in which all entities involved the fight to save money and increase their bottom line while maintaining a healthy margin in their cash flow.


As an automotive business owner, the success of your auto center depends on your ability to manage the cost of goods sold (COGS) in the supply chain and leverage your buying power to remain competitive in your local market.


Below are some ways that you can manage COGS and make it work for you so that you increase revenue while reducing costs. If you have any further questions or would like some further information on buying or selling an automotive center, then contact AutoCenter Sales today at 800-874-5793.

1. Get on Board With Supply Chain Management Software (SCMS)

The first line of defense in managing the cost of goods sold is to boost your buying power. To achieve this, however, is to embrace the technology that now dominates the supply chain process.


The days of making phone calls, sending emails, and waiting on suppliers for RFQs are all but gone. Auto Centers and other automotive businesses that are succeeding in managing the cost of goods are now using cloud-based supply chain management software.


The benefits of utilizing SCMS or RFQ software are endless:


●        Understanding a vendor’s cost structure

●        Accessing a supplier’s direct competitors

●        Assessing supplier strength and weaknesses

●        Viewing a vendor’s target market and customers

●        Staying current on a supplier’s product availability, pricing, and location

●        Comparing quotes and bids from a wide range of vendors on demand



In essence, SCMS or RFQ software puts the power back in your hands and gives you complete control over product procurement so that you can effectively manage the cost of goods sold.

2. Monitor and Manage Your Inventory

By effectively managing your inventory you can have the right products in the right quantity on hand and avoid products being out of stock and funds being tied up in excess stock. You can also ensure that you sell your products before they become obsolete or pile up in the stockroom.


Here are some practical techniques that successful business owners employ to manage their inventory:

Accurate Forecasting

Base your projected inventory needs and sales on factors such as sales history, local marketing trends, predicted growth, the current local economy, and how well your marketing efforts are paying off.

First In, First Out (FIFO)

Sell all products in the same order that you received them. The FIFO method allows you to keep precise records while ensuring that your customers receive new products. Place your incoming inventory in the ‘back of the line’ to let your old stock to sell first.

Monitor Low-Selling Stock

Unloading your low-selling product requires a bit of strategy. You may want to sell these items at a discount or launch a special promotion. Identifying the low-turn stock will help you reduce how much product you purchase in the next cycle.

Take Inventory Regularly

Never depend on your inventory records for too long a period. Set up a schedule a system for taking inventory and stick to it. What is in your stockroom and what is in your records should align at all times.

Invest in Cloud-Based Inventory Management Software

Look for software with real-time sales analytics. Inventory management software updates instantly with ever point of sale and adjusts your inventory numbers for quick reference. Modern systems give you lots of features including automatic ordering and notifications when inventory is low.

Quality Control Assessment

As you assess the quality of the products in your automotive center, consider the following:


●        Manufacturer defects

●        Distribution & transportation damage

●        How long a product has been in stock

●        Expert & Customer reviews

●        Your personal experience with the product

●        A product’s lifecycle

Buy or Sell an Automotive Business With AutoCenter Sales

If you are looking to buy or sell an automotive business, then contact AutoCenter Sales. We offer a wide range of properties that are on the market right now. If you want to sell your business, we can help you list it and find an investor. We utilize aggressive marketing techniques for all buyers and seller.


To find out more about our services and products or to schedule a consultation, call us at 1-800-874-5793. You can also send a message us at