Auto Service World
Feature   January 1, 2004   by Andrew Ross, Editor and Publisher

Doing the Math

In reviewing the research we conducted, I couldn’t help but feel a rush of excitement. This is very strange and not at all normal for me.

Now, I am a trained journalist, which is just to say–as my first year economics teacher put it back many years ago–“you can’t do math.” So I am continually surprised at my own personal reaction when faced with tables of data. For me, the excitement lies in the fact that the kind of data we gathered provides a degree of clarity that is generally lacking when we talk about the aftermarket.

When I first stepped foot into the Jobber News offices a decade and a half ago, I was handed a sheet which purported to show the way the aftermarket worked. One box showed the manufacturers, another the distributors and buying groups, still others the jobber and the service provider, with that segment flanked by another set of boxes showing the dealer supply network and still another the mass merchandisers’ and national accounts’ supply chain. It was all so clean and clear. It was all so simple. It was all so misleading.

I learned quickly that every box should have been connected to every other box if it was to accurately depict the way business in the aftermarket is conducted. This realization made it a bit difficult to understand the interplay between the segments: competitors becoming allies on some issues, suppliers becoming customers, end users becoming suppliers.

Still, that simplistic flow chart did serve its purpose. It was a bit like looking out of an airplane window. You can see the basic structure of a city–the way the buildings are laid out and the way the roads carve their way between–but it is only as you get a bit closer that you can start the see the patterns of the city, its rhythm. Once you’re on the ground, though, you can only see the movement of the people in front of you, the cars in your path. From the ground level, you can’t get the sense of an industry, just your situation.

You don’t need research to tell you about your own situation, you simply need to look outside your window, but it is helpful in showing you whether your situation is unique or shared by others. Are you ahead of the game or behind? For that you need what I’ll call the 1,000-metre view. You can see just enough of the patterns of movement without getting lost in the intricacies.

One of the most interesting patterns that seems clear is the way that jobbers are buying “outside the system.” It varies from product line to product line, but about half the jobbers are buying lines, at least infrequently, from companies other than their primary distributor. Another point is that returns are a serious issue. This isn’t news as much as it is a reminder. With so much product going out just to come back again, regardless of the reasons, it is impossible to be efficient as an industry. The list goes on.

There is so much more of interest to me as I study table after table, and there is only so much we can include in this issue (the full report is available), but one thing is for sure: the aftermarket is far more dynamic and far more complex than even my economics teacher would have suspected.

And we have the numbers to prove it.

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