<VV> BIG UNDERGROUND NEWS! Long

[corvairs]

In 1974 I thought it might be fun to make my business Corvair 
Underground official. Although I had been wheeling and dealing in parts 
and learning to repair Corvairs, it wasnt really in earnest - more of a 
lark.

In 1974, at age 23, I had no delusions of grandeur. After all, who had 
ever heard of a Corvair-only national parts business? Of course at that 
time Clarks, to the east, was about 9 months old and neither of us had 
put out a catalog yet. Times were certainly different.

In those 31 years I have seen many change in the parts market - some of 
them very radical. This business has had to change with the times as 
well. Its no accident that weve survived 31 years - an unheard-of 
lifespan for 95% of most businesses to even hope for.

Well, the times they are a changing again, perhaps more radically than 
ever. Yesterdays business model for an all-purpose, one-stop Corvair 
parts mail order business has, in my opinion, become obsolete. Because I 
intend that Corvair Underground survive at least another 5 or 10 years, 
some changes are in order.

 From the very beginning weve stocked and sold used parts. At various 
times in our history used parts have made up as much as 20% of our gross 
sales. In 2005, however, it has become painfully obvious that used parts 
are a losing proposition. The trend has been partially growing for 
almost 20 years. Up until 1983 we used to routinely part out as many as 
a hundred+ cars a year. Since the mid 80's that action has slowed to a 
virtual standstill.

Reproductions and diminishing economics in parting out cars shifted the 
focus to acquiring used parts collections already off the cars, and in 
some cases, even cleaned and catalogued. But a radical and fairly sudden 
change has taken place more recently.

Almost in the proverbial blink of an eye internet auctions have make the 
acquisition, cataloging and inventorying of used parts impossible. Click 
on one of the bigger auctions any given day and youll find 20-25 pages 
of parts for sale. And while we always like to buzz about the item that 
gets sold for an outrageous sum, the truth is 95+% of the stuff is going 
for rock bottom prices. Prices that no one can make a profit on - if 
they carry any kind of overhead.

8% of the inventory in our warehouse #1, 99% in warehouse number 2 and 
about 20% of the inventory in warehouse #3 are used parts. The burden of 
supporting this inventory doesnt add up - In fact, it probably hasnt 
for several years. My opinion on the matter was that I thought it was 
important to carry all these used parts because they supported sales in 
general. Of course we have always been dedicated to the concept of the 
one-stop vendor concept as well.

Its time to put sentiments aside and run the real numbers . I have 
decided to begin a phase-out of our used parts inventory.
The intention is to review our used parts liquidation progress exactly 
one year from now, Feb 1 2006. At that time I will decide whether to 
continue used parts liquidation for an additional year, until Feb 1 2007 
or scrap whatever used parts are still on the premises..

In any case we will no longer be purchasing used parts inventories 
effective immediately EXCEPT for used parts needed to support our 
rebuilding services - which we will be expanding. What that means is 
that items that are considered cores will continue to be important to us.

Were going to use the diverted space, time, money and effort in 
expanding and improving our new parts, reproduced parts, Go_vair 
performance parts and many rebuilding services. This change will not 
significantly impact our 300 page catalog or our website - other than to 
make our future in the marketplace more secure.

For all the details about the new monthly Corvair Underground Garage 
Sale, our internet auctions and the other ways well be liquidating 
these used parts check our website at www.corvairunderground.com and 
click on the link Used Parts Liquidation. (Note - the page may not be 
online until late Wednesday Feb 2)

As always we welcome your comments or questions at 503-434-1648 Mon-Fri 
8:30am-5pm Pacific Time. And I also appreciate the bandwidth! Thanks, 
Lon Wall President, Linda Wall Secretary-Treasurer Corvair Underground Inc.