Many jobbers have a tendency to look at every dollar leaving their business as a cost rather than an investment. This can be a very scary attitude in today's business environment. Perhaps it is time to slow down and consider some math.
Imagine talking with a jobber who believes his staff is a cost to the business. This person is clearly saying that the staff is a profit taker, not a profit maker. The obvious questions to then ask are, "Who hired them, who trained them and who pays them?" The fact is, good staff members are a clear investment in the business as their knowledge, talent and efforts produce a return on the investment made from their wages paid. Consider that a common topic under this expense mind-set is the dollars spent on providing training courses for customers of the jobber's store.
All automotive maintenance shops are under siege when it comes to ensuring they have the right knowledge available to them to enhance their shop's efficiency and bottom-line profitability.
Shops require proper and ongoing business management training. Many jobbers clearly see this as an expense and not an investment. If that is your mind-set, consider:
1. If a shop learned to manage its business affairs better, which in turn shows the owner how to become more profitable with current business, then the jobber's monthly statement would be paid in full every time.
2. Good shop management courses teach shop owners the business benefits of purchasing as much volume as possible from one supplier, and that is why a jobber is in business — "all" the aftermarket business from the shop, not just "some" of it. Consider that "some" costs too much, whereas "all" increases profitability. Increasing parts volume sales and remaining the chosen supplier of first call makes bottom-line sense.
3. If you believe there are too many jobbers in the market for the number of good shops left, then your business relationship becomes exceptionally critical today. Are the top 10 shops in your marketplace making you first call? If not, why? And don't point your finger at the shop owner. Opening personal communication levels between the shop and the jobber store is necessary to start the process of gaining trust and understanding. Attending a course with your chosen customers can tremendously enhance loyalty to your store.
The benefits to the jobber store are large and should be long term, if the jobber follows through with his or her commitments to the shop. Just attending a course with the shop customer does not create loyalty: it is how you follow up.
From a mathematical point of view, let's assume the jobber had a $6,000 shortfall in cash over the revenue collected from customers to sponsor a business course. That would, in many jobbers' minds, be a pure expense, therefore lost net profit.
If a jobber was netting after tax 2.3 percent of his or her total sales, then $6,000 divided by 2.3 percent equals $260,870 in new sales that would be required to replace that net income investment.
If the business course had only 18 shops attending, then that would work out to $14,492.75 in new business sales required in one year from each shop ($260,870 divided by 18). This represents only $1,207.72 in additional sales per month from each shop, or based on 20 working days, only a $60.38 daily increase in purchases per shop attending the class.
If you can't achieve that, then I would counsel you to get out of business because you certainly don't have any relationships left in your store. Also, keep in mind the increase that you do receive stays with you year after year, if you bring more value to the automotive shop compared to your competition. Ask yourself: What value does your jobber store bring to your customers' businesses that your competition does not? Then define your value in writing. Slow down and do the math. Value delivered increases a jobber's bottom-line profitability.
It seems jobbers have a lot of work to do in building, and rebuilding, their businesses and the relationships that go with them. Perform a mathematical review of your circumstances and then put into action the process of investing in all types of training. However, make sure it is the right type of training that is needed for your customer base and your store. When handled properly, the financial return to the jobber store is tremendous.
Bob Greenwood is president and CEO of the Automotive Aftermarket E-Learning Centre Ltd. (AAEC — www.aaec.com), a technology company based in Ottawa, Ontario. He has more than 30 years of business management experience in the independent sector of the automotive aftermarket.
