Auto Service World
News   January 24, 2023   by John Enemark

From the magazine: It’s Your Turn: Keeping stock

The importance of keeping more common products in your shop, plus other lessons on running your business

Harvey’s Muffler kept inventory in an on-site warehouse to serve customers faster

Shops need to be less dependent on their jobber to essentially be their warehouse. They’ll find the business smoother to run and customer satisfaction higher if they act as their own warehouse and keep more products within their four walls.

After reading CARS magazine’s May/June issue, I disagree with some of the article, Finding Success, which presented the results of the Annual Jobber Survey — especially when it comes to relying on your supplier as being the warehouse of your stock needs.

We had a pure muffler shop for more than 44 years in Prince George, B.C., which has a population of about 80,000. By “pure,” I mean we only installed exhaust, shocks and struts. We specialized in single and dual custom exhaust systems, carrying stock from one inch to six inches in diameter.

Admittedly, running a mechanical shop is a different game from our shop. Still, I hope some of my experience will apply.

Our fourth bay was our big truck bay with a hoist that lifted 54,000 lbs, allowing us to work on large motorhomes, logging and freight trucks and any large machinery.

After owning it for three years, we built a 2,916 sq-ft warehouse above the shop. Here, we carried more than 80 per cent of the total parts we sold each year. This warehouse kept us going every year.

By having our own stock, we were able to do the job when our customers came in. Every bay that is not

producing presents a loss of revenue, caused by waiting for parts to come from your jobber — if they have them — and your employees are not producing income for the company while waiting for the needed parts.

Something else that helps production: Profit sharing. All of our employees received a portion of profits from daily sales. At year-end, each of our employees received a good portion of the company’s annual profit. Our employees worked like owners. If treated like an expendable employee — and not receiving a portion of the company year-end profits as well — retention would have been very difficult.

For example, three of our employees worked in our shop for more than 40 years. We had another stay with us for 36 years. They were able to do any exhaust job that came our way. They worked as a team, which helped get our customers back on the road quickly and to ensure the next customer was not waiting long. The value of this institutional knowledge can’t have a price tag placed on it. But they were able to be successful because we carried much of our stock on the premises.

Yes, it’s costly to carry inventory. But imagine how much revenue you’ve lost when you couldn’t get the needed parts when the customer was in your shop.

CARS has written about differentiators and standing out from your competition. One idea recently talked about was offering lifetime warranties. After all, if a part is going to fail, it’s going to fail fairly quickly — well before any standard warranty period expires. But offering a lifetime warranty is enticing to the customer because they believe you stand by your product like no one else.

It’s something we offered long before it become a talking point. We honoured all our muffler and shock lifetime warranties and made sure customers were always covered by them. We reprinted invoices from our database for those who misplaced their originals. Most customers lose their warranty slips or forget they had purchased warranty parts — but we always made it a point to check. We also gave everyone a full one-year warranty on the work done that day to ensure they could trust us and that the repair was done properly.

When Lordco, our jobber, built a warehouse in our town, we stopped buying from Alberta. They offered us a very attractive purchasing package and said they would carry the product we were stocking ourselves. This gave us a backup to our own inventory.

We attended Lordco’s annual Trade Show in Vancouver every year and purchased at least $80,000 of stock and got a larger discount and dating on these purchases. It was a win-win deal.

All of this allowed us to grow a reputation and grow our bottom line. Returning customers would tell their friends and family to visit our shop for their exhaust, shocks and struts needs. By word of mouth, people learned that we were honest and got repairs done quickly and properly. Over the years, some of our customers came from as far as 900 km away just to have work done in our shop, then turned around and headed back home.

One last note for all shop owners: Pay your bills on time — or early — and in full. This is the thanks you give to your supplier for all they are doing for you. Without a solid jobber on your team, you’re losing the game.

Look after your customers with your own inventory and they will return and get their family and friends to come to your shop too.

So work with your jobber properly, negotiate your discounts, cash discount and dating. You will have a larger profit at year-end. We certainly did.

John Enemark was the owner of Harvey’s Muffler in Prince George, B.C., until his retirement in 2021.

This article originally appeared in the Nov/Dec 2022 issue of CARS.

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