Adlai Stevenson, a great statesman, once said: “On the plains of hesitation lie the blackened bones of countless millions who at the dawn of victory lay down to rest, and in resting died.”
In my opinion, this quote sums up the way we need to look at life and our businesses. If we sit back and let challenges and opportunities pass us by, we will fail to make achievements that make our lives worth living and our businesses prosper.
When it comes to the independent aftermarket, our challenges increase each year. Not addressing these challenges means lost opportunities and, too often, threats manifest from opportunities not seized.
Each distributor should identify the challenges, opportunities and threats facing their business. In doing so, you will likely discover there are many, and bringing them to light is the first step toward taking action.
As what may serve as a starting point, I have listed my top 10 major categories:
- Technology
- Manpower
- SGA Expense Growth
- Facilities
- Customer Consolidation
- Globalization
- Vendor Consolidation
- Environment
- Succession
- Margin Compression
Under each one of these major categories, there are at least half a dozen
sub-issues. If you are not looking into these and others and developing a strategy on how to deal with them in your business plan, you are “laying down to rest.”
In my limited space in this column, I will share with you two issues that I think are important to all of us. Both are opportunities if undertaken, and threats if ignored.
The first of these is technology. The average approach most distributors have toward technology is to be “dragged along.” Few of us look at technology as an opportunity to differentiate our businesses from our competitors. As a result, we often are placed in the position of playing catch up.
For instance, some OEM’s are implementing systems with fleet customers that allow the fleet to scan a bar code from a part used in their shop and have this part immediately create a replacement order with their local dealer. This can be a time saver for the fleet which differentiates the dealer with respect to the other competitors in its market.
Imagine having this system in your business and being the only one in your market to offer it to your customers. We need to be thinking of these opportunities and demanding our system providers develop software that will increase our value proposition.
Another opportunity that has become a threat is the declining market share for independent distributors, as reported by industry analysts. One of the most significant areas of market share loss is with national fleets.
Each marketing group has staff trying to steer national fleet business to that marketing group and its members. This is an admirable goal, but none of the marketing groups have the requisite footprint to compete against a major nameplate. As a result, there is a continual erosion of national fleet business for independents.
To state an opportunity that is certainly going to get me in trouble, I propose for the marketing groups to begin looking at ways to merge certain functions where they can increase each of their member’s competitive edge.
Certainly, it makes sense for them to look at merging services like credit card processing, cell phone agreements and many other business functions. Combining these services will save distributors on their expenses.
But the greatest benefit would be to combine their national fleet programs into one entity. That would create the best footprint in the market, and footprint is the number one attribute that governs a fleet sourcing agreement.
We can debate the best strategies for success. However, we must all agree that it is time to end the “rest period” and begin the journey toward victory.
