The business of running an automotive maintenance and repair shop is dramatically different than it was five years ago. Some of the basic issues that you must face are:
An extreme shortage of competent technicians
Retaining and motivating current, preferred staff
Keeping up with ongoing changes in vehicle technology
Finding, and attending, the right type of training courses for your shop
Analyzing, selecting and purchasing or leasing various equipment needs
Dealing with, educating and growing a preferred customer/client base
Determining what and how to market the business to ensure a professional image
Managing business cash flow through seasonal peaks and valleys
Working through various business and environmental legislation, and determining their cost to the shop
It’s more than enough to keep management occupied each and every day. The last thing management needs is the stress level of dealing with a jobber who doesn’t understand your business, or the role they should be playing in today’s independent sector realities.
There are tremendous jobbers in the Canadian marketplace today that should be cloned everywhere, but unfortunately, there are very few in any one market area. These great jobbers are working very hard to learn, and understand how they should be adjusting their own business in order to serve their preferred customer/client base professionally. They actually play an important role in contributing to the shop’s bottom line. These jobbers bring true value to the installer’s shop, and are trusted by their clients. They should be vigorously patronized with “first call” loyalty by every retail installer in that jobber’s territory.
There are, on the other hand, some jobbers that are lost, still functioning with ‘Seventies and ‘Eighties mentality and are afraid of change. They do not practice what they preach, and do not want to get involved with their clients. They don’t respect the installer business and don’t really understand the installer’s business. Those jobbers are motivated simply to sell more parts to anyone to keep the volume rolling, without any regard of their actions to their customers or their marketplace.
Today it makes sound business sense to have a professional relationship with a jobber you can trust.
Several important reasons exist for selecting one jobber with whom to develop a professional business relationship. Consider the following: In today’s busy shop, management must understand that the manager/owner’s time is worth money, but few installers realize that management’s time is worth the retail door rate the shop is charging out. Management must also contribute to the bottom line of the business and not just leave it up to staff. Time is money, and management can’t afford to waste either. Where time is wasted, it would turn out that management is a cost to the business and not a profit contributor. When someone becomes a cost to the business, and doesn’t contribute to the bottom line, shouldn’t they be fired? Maybe it’s time to look in the mirror instead of blaming the technicians for inefficiency and lack of profitability within the shop.
The E.K. Williams & Co. survey on page twelve of this issue shows that a typical shop in Ontario should have a minimum retail maintenance door rate of $72/hour. If management is running an inefficient, and most likely unprofitable business, he or she is probably spending a great deal of time on the telephone each day, shopping various jobbers for prices on parts. This manager/owner thinks that the profit on the parts is going to save their business. They think the parts margins are the main factor responsible for the bottom line of the business. This is truly the biggest mistake that can be made in the business today. If it takes 10 to 15 minutes to shop various jobbers to save five or ten dollars on a part, the manager has just incurred a 12 to 18 dollar cost to the business (1/6 to1/4 of an hour at $72/hour). The mathematics doesn’t lie. Management’s time is being wasted all day long, time that should be spent on real business issues.
It also proves that management does not understand today’s rules in the industry. Profit is not a dirty word, yet for some reason the shop owner must think that the jobber must be charging too much if he or she makes a profit on a given part. It’s time to get over it. Profit must be made at every level, or businesses go out of business; it’s that simple. Stop running the business based on price. Instead, run the business based on quality and enhanced value that the shop can provide to the client. Then, build a solid business relationship with your chosen jobber by looking at the value the jobber brings to your business. Thinking that the jobber with the cheapest price is the best business to deal with can really cost you and your business an unbelievable amount of money. Today it can pay your business handsomely to establish a loyal relationship with a jobber who understands your business, and is truly committed to assist you by moving your business forward.
If you have a jobber who stacks up with all the correct replies to the questionnaire above, you have found a jobber who understands how to run their business in synch with the installer business. Patronize this jobber with everything you can give because they can then afford to deliver a high level of value to you. Management must not run the business as if parts pricing is the only issue. Better jobbers can’t win on every item. but are price competitive, and will bring more to your business over the course of a year. That value will put money into a shop’s bottom line.
May I offer one final piece of advice? Pay your jobber in full each month. They are in the commodity business and must have cash each month if they are going to continue to bring a high level of value to you. As you know, you can’t expect anyone to work for nothing, and good jobbers are no different. The industry is changing rapidly, and we must change with it. One of the changes involves understanding the time/value equation of dealing with ONE chosen, high value jobber. Now you are in a position to manage your business to a higher level of profit, rather than spending your time as the “teleshopper” of your business. Welcome to the new automotive aftermarket industry! SSGM
Robert (Bob) Greenwood is President and C.E.O. of E. K. Williams & Co. (Ontario) Ltd.
Bob has over 24 years of Business Management experience within the automotive aftermarket industry, training and consulting with independent retail automotive repair and service shops across Ontario on all facets of their business operations.
Bob has also helped wholesale jobbers do a better job by providing valuable insight as to challenges faced by retail installers — and how greater cooperation could be mutually beneficial to both businesses, especially in achieving higher profit.