September 1, 2012
Dumb and Dumber
As I write this article, I do so in front of the mirror, as I should be listening to what I am saying. I have been fortunate to meet and visit with several of my peers over the years at industry events like CVSN, HDDC, HDAW and many others. Unfortunately, the topic of conversation invariably becomes a discussion of what I call, “the race to the bottom.”
Many of us understand this contest as a competition on who can give away heavy-duty parts the cheapest. Enabled by volume-driven manufacturers and complicite distributors, this is a race that all contestents lose.
Everyone reading this article is guilty of participating too often in this less than desirable race.
My concern is that the independent aftermarket is falling into a trap of making this part of its culture. This slide is a result of our vendors (dumb) and ourselves (dumber) focusing on volume and low-hanging fruit.
Too often our manufacturer reps and our own sales associates focus on the top 50 part numbers in our industry.
This results in a pathetic and depressing game that starts with distributors attempting to get a lower and lower price from suppliers.
Statements like, “I need an edge,” “I want maximum rebates,” “Put me on the same level as the OE,” “I will give you all my business,” “Why can my competitor sell at my cost?” echo through industry boardrooms like a reccurring nightmare.
I wouldn’t be surprised if I walked into a liquor store and found brake drums and white box valves for sale.
Suppliers then are forced to respond by creating algorithimic like programs, side door deals, deceptive or false statements to make their customers feel better.
Statements echo again like “You have the best program,” “Shhhh…that price is for your company only,” “I will give you the trailer load price” and “Your competitor must be selling below cost.”
All this precious time and energy is wasted on an activity that produces little or no profit. In addition, over the past 10 years this same activity created the “all makes” industry and the advent of cheap offshore goods.
In that same period, a ridiculous amount of new competitors entered the race to the bottom by adding heavy-duty low hanging fruit to their offerings.
I don’t think I would be surprised anymore if I walked into a liquor store and found brake drums and white box valves for sale.
My solution for both dumb and dumber is the same. Focus your teams on fruit that is hard to pick. If you don’t know how, or you are getting resistance from your staff, try this: If the end user (the guy who throws the box away) can recite the part number or SKU by memory, don’t focus or even waste precious activity on it.
This item has no profit and soon will be subject to online reverse auctions. If the end user describes it verbally such as “I need five of those breather doohickeys,” you are on the right track.
Renumeration or commission on items that end users can recite part numbers for should be restricted or eliminated, as it can be compared to paying commission to a cashier at the gas station on the gas he sells.
I went to a presentation at a convention that sums it all up. We are not in the heavy-duty business. We are in the $100 bill business. Profitability needs to take ultimate priority over sales volume.
Culture can be defined as a reflection of what this industry should be. I believe it should reflect the hard work, commitment and passion that all reading this article possess.
It should not be bunch of circus clowns with high-blood pressure beating each other over the head with baseball bats and wondering why our wallets are empty.
I have to stare at the mirror for a while.
John Bzeta is president of Fleet Brake headquartered in Calgary, Alberta, Canada and is the 2011 Truck Parts Distributor Of The Year. The views expressed in the Guest Editorial are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of Truck Parts & Service magazine.