AR:


AR What ar po


po t-COV Th


The aut


remember place.


AR:What are the pluses and challenges of handling business pos -post-COVID for auto recyclers you interact with? The auto recycling industry is changing, remembe wha


R What are th pluse V


he plus VIIDf use an challeng fo auto ecyc auto recy ler yo


remember what made auto recycling successful in the first pll


uto recycling ndustr ade aut


range of parts and types at a price point that is attractive toint th the custo


p ace. It’’s all about logistics – being able to handle a wideing ablle to handlnd e awid rang


n e of parts


e It’s all aboutbou log stics t and


cycling industry is cha g ng,but h tmad t


giistic – being b


r cycled part is genuineROE® – meaning it is produced by the vehiclemanufacturer, i it has incredible environmentalthe vehicle manufacturer, t has incredible environmental benefits if used instead of producing a new part and isis super cost effective in most cases.


the customer. I think it is important to remember that the re


t mer. I think it is important tot benefits if t f used instead of producing f


d types at a priice poi t hat is attra remem


mber that the g a new part andt


super cost effective in most cases. The auto recycler needs to have a robust business model that makes sense in today’s environment. It helps if they’re vertically integrated,, but thet


The auto recycler needs to have a robust business model thatmakes sense in today’s environment. It helps if they’re vertically integrated,y t


but the market is so competitive that


it’s not always enough just to be good at one thing – youit’s not always enough just tot be good at one thing –g you need more than one string to your bow


need more than one string to your bow. Auto recyclers


uto recyclers whom hav these challengingtimesg luck r good str tegic


swhomhave found ‘s lve


k or good strategic planning, processweresuchthat


these challenging times had planned well. Call it luck or


process w re such that they could adapt quickly. ycouldadaptquicklyt


s had plannedwell.Call it c planning, their systemsr systems and t they


d ‘siilver linings’’ in d


s and


Let me be specific here and focus on online sales. The pandemic has fast tracked this sales channel which is quickly becoming one of the fastest growing channels available to sellers. I consult to eBay UK who are driving aggressively into the B2B market with their eBay for busi- ness Green Parts strategy. eBay sales growth in the past 12 months has been well above standard. What is interesting about this, though, is that auto recyclers are only a small part of the market – it’s clear to see why eBay UK are investing heavily in this segment.


AR: You mention that some recyclers, though, have done very well during this crisis? What is the driving force of this? The global pandemic has made auto recyclers more aware of their cost base, and the importance of planning for future risk. It is not enough to just react to what hap- pens in today’s market – you need a solid plan that will see your business thrive for years into the future. Auto recyclers whom have found ‘silver linings’ in these challenging times had planned well. Call it luck or good strategic planning, their systems and process were such that they could adapt quickly to the changing models they needed to pivot. In fact, you could say the situation played into their


hands. For example, those that had a strong online pres- ence were top contenders with good eBay stores, products listed with excellent feedback scores, and able to provide a click and collect service even in the eyes of a hard lock- down. I have some clients whose eBay sales have doubled and now is a good proportion (50%) of total sales. Others were not so lucky.


50// September-October 2021 market ist so competitive that AR: What is your What is your r prediction fo the future opportunities ediction for the future opportunities available to the auto recycling industry?


Auto recyclers are really well placed. It’s difficult when you’re dealing withg


ailable to the auto recycling industry Auto recyclers are really


lies the ‘secret sauce,’ as I like to call it, that provides a gateway


that comes in a CO in aCOVIDworld. But oddlyt lies the ‘secret sauce,’ as I like to call it, that, y to recycled auto parts boom.


t


gateway to recycled auto parts boom. t get


t me wrong, I, am in no way trivializingy g on anyone. t


you’re dealing with all these changes and the uncertainty that comest


ywell placed. It’s difficultwhen all these changes and the uncertainty VID world. But oddly enough,, therein


y enough, therein t provides a


Don’t get me wrong, I am in no way trivializing the dev- astation COVID has had on millions of people and their families around the world – I feel for themand would not wish this pain and suffering


astationCOVID has had on millions of people and their families around the world – I feel for them and would not wish this pain and suffering on anyone. Yet change,, uncertainty


et change, uncertainty and economic vulnerability in the broader community one could argue s the perfect


y and economic vulnerability iny


the broader community, one could argue,, i is the perfect storm for a very strong level of demand for the automotive recycling industry for some time to come. You see, every time we encounter economic or social uncertainty, people keep their cars longer and that in turn leads to more main- tenance and the need for more affordable parts.


AR: Are there specific markets that you see recyclers can grow? I have been a strong advocate for the supply of recy- cled parts into the collision repair industry for a very long time. The insurers I work with today all have commercial, quality, key to key and environmental objectives, so in this context, they really need a strong supply chain of quality recycled parts. Again, I will reference the eBay for business Green Parts program I have been consulting on in the UK. We have been working very closely with all top 5 insurance brands in that market. All are looking for a high quality, independently certified supply chain to work with. Repair costs are increasing, labor, as you know, is not getting any cheaper, parts costs are increasing, and parts availability is deteriorating. All this is negatively affecting repair cycle times and repair costs which in turn are leading to less satisfied policyholders. Insurers and collision repairers are looking for a solution, so if I were to pinpoint just one segment that auto recyclers should be focusing on, then the collision repair segment is undoubtedly the one! There is a need and a willingness. Auto recyclers now need to provide a viable solution to that growing need for high quality genuine parts.


AR: What advice would you give to those facing uncertainty? Well, the first thing I would say is, if you do not already have one, have a plan. This means you will need to invest


Automotive Recycling g the dev- recycled part is genuine ROE –meaning itg is produced by


activi e to h


uto recyc i g uccessfu ecy ling su cessful in the irst


ses and challen ycle


y lers you intenter ct with


enges of hand ng h?


nges of h nd ingndliin business teractwth


ng bus nes hangiing, but we must utwemus ust


he first de


ss ess


They either didn’t have the know-how systems in place or the ability to react u ckly nough For ex mple


They ithe ence They either diidn’dn’t hav or he bility ave the now how, ystems


or the ability to react quickly enough. Fo


For example, it takes time to build your online pres- ence.ence. To just start listing products on eBay and then justjus sell parts there – let’lse l n estment to ret e a“ho


xample, it takes im


sell parts he e The inv s quite


ts th re – let’s face it; it just doesn’t work that way The investment to return equation is not linear, rather it is


ust starttart liisting roduct t’s


ce it t;; it ju


eact quiickly enough. akes time to bui d ou sting products on eBa s fac


ust doe


uilld your onlinnline presres- B y and hnd then jus twor


esn’t ork th


work, that had invested, that had all the foundations in place, they experienced hockey-stick growth.


h ckey stiy t ck”deal. So those h t had ,


is quite a “hockey stick” deal. So those that had done the work, that had invested, that had all the foundations in place,, they experienced hockey-stick growth.


turn equatioi n is not lini ear, rathe e tha


a done the ust


hatway. h r it


he know-how, systems in pllaceace


BOOST OR BUST?


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