How do you measure up as a customer for your jobber?
Last month, I addressed the issue of how to choose your jobber. Now let's address the issue of jobber choosing the installer as a customer/client.It has been acknowledged by most within every level of...
Last month, I addressed the issue of how to choose your jobber. Now let’s address the issue of jobber choosing the installer as a customer/client.
It has been acknowledged by most within every level of the automotive aftermarket industry that this industry has changed dramatically in the past five years. It is also starting to be acknowledged that the independent installer, and jobber, need to clearly understand their role in the industry, and more importantly, understand that they must develop a different kind of relationship than that of the past.
The amount of mistrust in this industry between the independent installer and his/her jobber has grown over the past twenty years. Many retail installers seem convinced that every jobber out there is determined to “take advantage” of them at all times. They don’t, and can’t, trust their jobber company. This truly is “old style” thinking. Nothing, today, could be further from the truth. Many good jobbers do exist; just refer to the October issue on how to find them.
It is time to address, and change, the business relationship between the independent installer and the independent jobber.
In business today, the better installers understand the process, that they must build a level of confidence, and trust, between themselves and their customer/client base they choose to sell to, if they are going to get, and keep, all the client’s automotive maintenance and repair business. To do this they must slow the process down, communicate, educate, and understand to whom he/she is selling to, and then build a plan tailored to that customer/client.
The better jobbers today also understand that they must slow their process down, learn everything possible about the installer’s segment of the industry, earn their installers’ trust, and build a relationship of open communication, education, and provide comprehensive support for the customer/clients to whom they choose to sell.
Times have dramatically changed for both parties. Both parties are clearly now in the relationship business. Both parties need each other more today than ever before.
These are realities, yet the independent installer and the independent jobber have failed miserably at the art of communication and education about each other; then again, each party never asked.
The jobber never clearly communicated that he/she is in the commodity business. Commodity businesses need volume, and they need cash. Jobbers never communicated that they can carry an inventory that can range in value from $225,000 to $1,000,000. They never communicated that they must strive to turn over their inventory 4 times a year, and in the future, due to the growth in number of skews, they may be striving to turn it over only 2.5 times a year. Poor inventory management in the jobber business increases their costs dramatically. Too many jobbers are operating on an overall business margin of only 28% to 33%. The better jobbers need an average of 40% to really make his/her business click, in order to bring real value to their installers. Too many jobbers make 50 to 60 deliveries per month to each installer customer delivering only $4,000 or less per month in purchases. You can do the math: it doesn’t add up. Too many jobbers carry accounts receivable in the $100,000 to 200,000 plus range, yet they must pay their wholesale distributor in full each month. When the jobber doesn’t have the cash to pay the WD, then the jobber can be forced into a line of credit at his/her bank, and you know what kind of interest the banks charge.
These are but a few of the basics of the jobber business, yet the installer never asked, and the jobber always seemed to keep everything a big secret too. The bottom line is that both the installer and jobber need more “NET PROFIT” to their business, yet everyone goes around thinking if you made a profit from me, you “screwed” me. This must change if we are to grow and prosper.
Let’s take a look and see how your installer’s business measures up to your jobber’s needs:
Too many installers do not want to develop the relationships that are required to be successful in business today. There is a saying that states, “if you always do what you’ve always done, you’ll always get what you’ve always got.” When an installer is not prepared to change their thinking, (and support it with their actions), about companies that are truly trying to make a positive effort and contribution to the industry, perhaps it really is time to get out of business. Your life must be over. If we don’t change, and do things differently than we all have done in the past 20 years, what truly is the alternative? Change in today’s business is not an option.
Good independent jobbers are realizing that they can’t sell to every installer. They want to choose who they desire to do business with, build a credible business relationship, and receive all that client’s monthly business. They also want to get paid in full each month, allowing them to move their own, and their client’s, business forward. This is a fabulous way to do business for both entities, and it sure does a lot to reduce the stress in our industry. Many people in the industry think this is “pie in the sky.” That’s part of our problem. That’s too bad, because the jobbers and installers that have discovered how both parties can work together have an entirely different outlook on their business and life, and their financial statements support it.
Become a “positive installer business” to your chosen jobber. Open up the communication floodgates, build a credible, knowledgeable, business relationship, and watch your business change for the better. SSGM