We must always challenge assumptions, even if we sometimes don’t want to do it.
Since coming to this industry, the magic number I’ve heard regarding the percentage of parts that come back as returns is 25. I’ve heard the figure repeated in conversations, speeches and repeated it myself, apparently without thinking much of it.
But then I got to thinking: Can returns really be 25 percent? After all, if that’s true, it’s a bit unbelievable. For instance, could it be that the advent of online parts ordering, enhanced training of counterpros and technicians and increases in parts quality hasn’t done a single thing to reduce returns in the past, say, decade?
If the 25 percent figure has stayed consistent over the years, it means everything this industry has done to attempt to reduce it has totally, utterly, completely… failed.
So is 25 percent accurate? I worked with our research department to find out. We surveyed 126 aftermarket professionals (90 percent of them jobbers, 10 percent retail store professionals).
After sifting through the results, I have a new number. And it’s a good one.
If 9.7 were an earthquake, it would be felt the world over. Which is what I’m hoping this new number accomplishes. 9.7 means things are going right, or at least better than they were before. I believe at one time 25 percent was probably accurate, but now it’s clearly not.
In fact, a full 45 percent of those who responded to our survey say about 5 percent of the total sales (including warranty, cores, etc.) come back as returns; 6 percent said the number is 21-25 percent; and 4 percent of responded said returns were more than 25 percent. For the average of 9.7 percent, 49.4 percent of those returns were cores; 16.8 percent was the wrong part ordered; 16 percent was warranty/defective; 10.3 percent was other; and 7.6 percent was wrong part delivered.
The new 9.7 number is a double-edged sword. While it’s good that returns aren’t seemingly as bad as previously thought, if returns were being made the scapegoat for problems at a jobber or retail store and returns aren’t that bad, what else is causing problems? I called a number of industry pros to get their take on the 9.7 number. Several counterpros were frankly surprised to hear the number. They were almost certain it was more. But the head of a program group told me the 25 percent figure was the real surprise; in fact, 9.7 percent wasn’t much of a surprise to him.
I did a little digging and found out that in 2005, Counterman magazine did a survey of counterpros and found that retail stores said 16 percent of sales were returned; it was 13 percent for jobbers. At the time, not much fanfare was made of it. So, could several percentage points be knocked off the return figure in as many years?
I’d like to think it could happen. After a little research, I have 126 of your fellow counterpros telling me returns aren’t as bad as you might think.
How does the 9.7 figure sit with you?