First, after an uninterrupted string of boom years, suddenly, 2008 sales are flat. That means that the annual sales and profit growth to which we have become accustomed won’t come from its usual source this year.
For quite a while now, the old adage that a rising tide lifts all boats in the harbor has applied to our businesses, but it will be some time before that situation kicks in again.
Gloom and doom? Hardly! But, we’re all going to be required to be smarter and more profit oriented in 2008 than we have been and look for ways to make more profit on existing sales.
Old friend Dave Scheer of Inland Truck Parts was telling me he’s looking long and hard at Inland’s sales in terms of margins and not as much in terms of sales growth opportunities, as in the past.
For his company, that could well mean more emphasis on service and service-related parts sales, not direct-to-fleet parts sales.
That concept could well apply to you, too. In a service sale, within reason you control the price at which you sell a part, not the customer. That’s also true to a lesser extent on over-the-counter parts sales.
The customer has come a long way to get a part and he doesn’t want to leave empty handed. But be careful – there are other places he can go next time for both service and parts, so your pricing must be fair.
In my opinion, there is “gold in them thar hills” for you in terms of building the share of your total sales that higher-profit sales provide to you.
Now, on to Heavy Duty Aftermarket Week (HDAW) held in Las Vegas in January. As reported, this was the first HDAW in which the Commercial Vehicle Solutions Network (CVSN), the largest association of independent distributors, participated. And that fact seems to me to have given HDAW the extra boost it needed to become a truly industry-wide event.
A large gathering of exhibitors and a great number of one-on-one conferences were a visible manifestation of that new status.
But, there was another part of the get together that I found even more valuable – a session that was held on breaking down the barriers to your acquisition of technical information.
If you’re going to build a profitable service business, you must have up-to-the-minute technical data to do so. At the same time, the OEMs want to keep that data to themselves, even though their suppliers, not they, create most of that data.
To attack that problem, the independent aftermarket needs a strong unified voice, and HDAW could well provide that voice.
I feel this year’s HDAW was a glimpse of great things to come. A focus on the issues that matter to the aftermarket and a proven forum for distributors and suppliers to interact and lay the foundation for our collective success. I can’t wait to see what next year brings.
