Focusing on Profit, Premium, and Parts is part of a successful strategy.
Keeping the right mix of brake parts in stock is vital for jobbers to be able to effectively serve both do-it-yourself and service provider customers.
Jamie Stevens of Stevens Auto Electric, located in Grimsby, Ont., serves as an example.
“Our business depends to a large extent on word-of-mouth. We are known as a better shop in the area, but I don’t carry much in inventory because I depend on the jobbers for that. The jobbers provide good service and have excellent inventories on brake parts. So, it doesn’t make sense for me to stock too much.”
With that reality in mind, jobbers have a number of views on how many brands, quality levels, and parts numbers are needed for coverage, what pricing strategies they are using, and how they are boosting profitability.
For Carl Stockford of King County Auto Parts, Sussex, N.B., having a good inventory of higher quality brake parts ties in with his emphasis on safety. It’s also more profitable.
The store inventories one brand, and within that Carl says there are four quality levels: ceramic, premium, medium grade, and a white box line.
“There are about 250 parts numbers, with various parts having duplication in the different quality levels. We’ve got $21,000 in stock just in pads. The four quality levels give us complete coverage. We try to make our average markup on the three better-quality levels, because you have to sell four times as much white box product to make the same money.”
In selling, Stockford emphasizes safety. “I was talking to someone the other day who was wanting to buy cheap pads, and I asked him to think of what could happen with those cheap pads if he was coming down a long hill with his pick-up and a loaded trailer and the brakes faded. The big question I ask customers is, ‘Do you want to stop in time or just slow down?’ I point out to my customers that premium pads make a big difference in stopping distance,” he says.
A counterperson at one New Brunswick store, who asked not to be identified, says that carrying economy and premium levels of product helps address price concerns–local competition is stiff–but he adds that retail customers are a better opportunity for the premium brands, a segment that is making up an increasing part of that operation’s business.
That operation also finds that simple promotions are still effective: email and fax promotions as well as specials printed on invoices are just three examples.
Although Bill Bird Jr. of Central Auto Parts, Fredericton, N.B., says that while his firm’s emphasis is on engine rebuilding, they do sell brakes parts to the DIY market and the installer. They carry premium, premium plus, and economy within one brand to provide coverage.
Carrying one brand gives Chris Rennison of Brian’s Automotive Specialists in Drayton Valley, Alta. most of the coverage the store needs, but the store also carries some parts in additional brands because of the need for availability. “You can’t really make more money by lowering your investment in inventory. You have to have the parts right now, and that’s why we carry several brands. It’s very competitive and our service is an important aspect of our success.”
Rennison says the store carries three quality levels: premium, mid-quality, and an ultra economy line which is made offshore. “Our pricing is a function of the various quality levels and there are also pricing breaks for installers. The store’s customer mix for brakes is a combination of DIY, installers, and car dealers. We find that the car dealers don’t carry everything in brakes as the cars on the road get older.”
The concept of educating technicians is an important part of the approach to brake parts sales at Big S Automotive Parts, Strathmore, Alta.
Tyrone Blakney explains that the store carries a full premium line and a full economy line. “Because when the phone rings, you have to have the parts. We have Wal-Mart and Canadian Tire here, so people are mindful of pricing on brake parts. However, we try to educate consumers and installers on the value of quality.
“There are those customers who may want to scrimp and save, and there are those who want to do the job right. Using quality parts is a big safety issue, and we point out, for example, that if the wife and small kids are using the vehicle, you want to make sure that the brake job uses high quality parts. The big question is how quickly it can stop,” Blakney says.
In terms of parts variety, Blakney says it’s important to do a survey or otherwise get data on the vehicle mix in a jobber’s given area. “For example, we don’t have a lot of imports in this area and probably the biggest preponderance of vehicles is light trucks from the Big Three,” he says.
“Educating our techs is important and in this respect, we try to emphasize to the installer that it’s important to sell a complete brake job. We stress quality with this, because as the saying goes, you get what you pay for, and the premium quality is better value and lasts longer. Also, from a profit perspective, a quality brake job using quality brake parts involves more and better parts. There needs to be an emphasis on thoroughness and doing a failure analysis on the brakes, and in this education job with our customers, the counterperson is very important,” Blakney says.
Brake parts inventory at jobber David Anderson’s Carquest Auto Parts store in Barrie, Ont. is comprised of four levels: premium, heavy-duty premium, OEM style/equivalent, and economy, with about 60% of the numbers having parts in each category. In terms of pricing strategy, “Price is always a consideration,” Anderson says, “but you always have to remember that if you sell on price, you can also die on price.
“Usually, with the installer, the guy has pretty well predetermined what he wants to buy. You can do some education with walk-in trade however, but there is really not much wiggle room in price.”
For Anderson, coverage is paramount. “If you don’t have coverage, the attitude of the customer is, ‘who’s next?'” Anderson says the store has a good parts mix within the brand it carries.
With an emphasis on promoting and carrying quality brake parts, Dan Collins, Auto Parts North, Huntsville, Ont., inventories three basic levels. “Top of the line, mid-grade, and specialty fleet and commercial application products,” he says. “Our approach is that we don’t sell the cheapest quality of anything.
“The problem or market challenge is that up to about four years in the age of the car, people put on the best stuff, but as the car gets older, they don’t want to spend $100 on a set of pads, for example. They would rather spend $40.”
Anderson says many people think there are mandated standards on aftermarket brake parts, and so they don’t realize there are real quality differences.
Safety considerations drive the inventory mix for Collins, who emphasizes high quality brand names. “We try to keep our customers well-informed concerning brake parts. The key in repair is to get good quality back on the car. You have to stick to your guns and educate the consumer,” Collins says.
“If you present the facts to the consumer you can sell the good stuff, and this means that it is safer, more profitable, and there are fewer callbacks. You don’t have near the problems if you concentrate on selling quality. Women, as an example, will usually buy the best quality parts if you explain what the different quality levels represent,” Collins says.
Jeff Riley, who operates a NAPA Auto Parts store in Etobicoke, Ont., says he carries four quality levels and feels there is good parts coverage within the one brand carried by the store, with a number of categories for differing applications in the mid-price range. Riley says that as a sales driver, pricing comes third, after quality and availability. “Our customers are mainly concerned with quality and I would say that for 75% of them, it is their main concern. For that reason we focus our sales efforts on quality, features, and benefits.”
Although Riley does not emphasize price, the store does have incentive-oriented programs for installers which it promotes several times a year. The store also has an outside sales rep. In addition, NAPA provides training and helps with technical questions.
Bob Butcher, at the NAPA Auto Parts store in Mississauga, Ont., says his store carries one brand or line of brake parts and four quality levels: least expensive, equal to original equipment, equivalent ceramic and equivalent non-ceramic, and severe duty application parts.
“We encourage customers to buy the better qualities, and as an example, when we explain the benefits, people will go for the [premium or mid-range].” Butcher says there are about 200 parts numbers in the mid-range in the store and about 140 in the least expensive range. “You need to have something to satisfy everybody and so you have to have quality and price options, ” Butcher says.
Marketing is another key driver. “We have discounts and programs and there is always a promotion running. We have a number of programs featuring incentives for installers, such as getting a free trouble light, for example.”
Nick Salvati, Berco Automotive Supply, Toronto, Ont., says, “We basically have a two-price-point strategy, economy and premium, and we have a well-known brand for each. You need to have choice, because for a variety of reasons, customers may not want to spend much on a new set of pads. For example, if they are turning in a leased vehicle, they want economy pads. Also, with older vehicles, many people do not want to spend big bucks on brake parts.
“In terms of coverage, you have to be right up to date, and have parts for 2005 vehicles. You can’t get by with just coverage on older vehicles. You also have to have good coverage of imports. Overall, you need good coverage plus depth, because a garage is not going to wait around for the part.
“In our promotional efforts, we put out flyers several times each year and these feature specials on brake parts with discounts for specific quantities.”
While some jobbers’ approaches differ in the details, all recognize the importance of quality and selection. While the benefits of premium quality products in terms of margin are an important driver, they also recognize the importance of selling the benefits of premium products in terms of both customer satisfaction and safety. In the face of much talk about the importance of price, that is a refreshing attitude.
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