How do you measure up as a customer for your jobber?

It has been acknowledged by most within every level of the automotive aftermarket industry that this industry has changed so dramatically in the past three years. It is also starting to be acknowledged that the independent shop owner and jobber need to clearly understand their role in the industry, and more importantly, understand that they must develop a different kind of relationship than that of the past.

The amount of mistrust in this industry between the independent shop and his/her jobber has grown over the past 10 years. Many shop owners seem convinced that every jobber out there is determined to take advantage of them at all times. They don’t, and can’t, trust their jobber company. This truly is outdated thinking. Nothing today could be further from the truth. Many good jobbers do exist.

It is time to address and change the business relationship between the independent shop and the independent jobber.

In business today, the better shops understand the process, that they must build a level of confidence and trust between themselves and the client base they choose to sell to, if they are going to get and keep all the client’s automotive maintenance and repair business. To do this, they must slow the process down, communicate, educate and understand to whom he/she is selling to, and then build a plan tailored to that customer/client.

The better jobbers today also understand that they must slow their process down, learn everything possible about the independent shop segment of the industry, earn their shop owner/managers’ trust, and build a relationship of open communication, education and provide comprehensive support for their clients they choose to sell to.

Times have dramatically changed for both parties. Both are clearly now in the relationship business. Both parties need each other more today than ever before.

These are realities, yet the independent shop and the independent jobber have failed miserably at the art of communication and education about each other. Then again, each party never asked.

The jobber never clearly communicated that he/she is in the commodity business. Commodity businesses need volume, and they need cash. Jobbers never communicated that they can carry an  inventory that can range in value from $500,000 to $2,000,000. They never communicated that they must strive to turn over their inventory 4 times a year, and in the future, due to the growth in number of skews, they may be striving to turn it over only 2.5 times a year. Poor inventory management in the jobber business increases their costs dramatically. Too many jobbers are operating on an overall business margin of only 28 percent to 33 percent. The better jobbers need an average of 35 percent to 37 percent to bring real value to their shop clients. Too many jobbers make 50 to 60 deliveries per month to each shop customer delivering only $6,000 or less per month in purchases. Too many jobbers carry accounts receivable in the $200,000 to 300,000 plus range, yet they must pay their wholesale distributor in full each month. When the jobber doesn’t have the cash to pay the WD, then the jobber can be forced into a line of credit at his/her bank, and you know what kind of interest the banks charge.

These are but a few of the basics of the jobber business, yet the shop owners never asked, and the jobber always seemed to keep everything a big secret too. The bottom line is that both the shop and jobber need more net profit to their business, yet everyone goes around thinking if you made a profit from me, you “screwed” me. This must change if we are to grow and prosper.

Let’s take a look and see how your shop’s business measures up to your jobber’s needs:

P is Positive, and N is Negative.

P — Do you have a solid relationship with one main jobber by sending 85 percent to 90 percent of all purchases to one particular jobber? Volume counts in the jobbing business.

N — Do you deal with a jobber only because of the best price and discounts they offer?

N — Do you try to build your shop’s net profit mainly on the margin of your parts and other hard goods you sell (oil, tires, batteries too) because you are among the lowest labor rates in your area?

N – Do you usually spend time on the phone and shop 3 or 5 different jobbers to save a few bucks?

P — Do you pay your statement in full each month? Cash is king in the commodity business!

N — Do you pay only a portion of your jobber’s monthly statement because you haven’t managed the business properly in order to pay all your accounts in full when due?

N — Do you blame your jobber for your mismanagement of the business? 

N — Do you insist on consigned inventory? If you don’t take ownership, your jobber is financing your inventory at a cost to his/her business.

P — Do you communicate with your jobber your inventory requirement needs? When your jobber can buy right, and you stock right, you and he/she can make more money.

P — Do you support all your jobber’s initiatives, or do you just pick and choose only what is of immediate benefit to you? Supporting your jobber in various initiatives he/she may have is critical to his/her attitude towards you. If an initiative doesn’t fit you, clearly communicate why it doesn’t fit your business. Clear communication brings in the right initiatives for your business.  It takes a lot of time to set up various initiatives, and time is money or cost in the jobbing business.

N — Do you blame your jobber for a failed part because your business installed it incorrectly, thus you claim it is a warranty issue? Take responsibility for your company’s actions.

P — Do you keep all your commitments you make to your jobber? Your word as your bond is a great credibility builder.

N – When ordering parts for a specific job, do you ask the jobber to send out every possible variable on that job because you are not sure, then, send back what you don’t need? Adjusting all the paperwork for your experiments is a huge cost to a jobber.

P — Do you insist on quality parts from your jobber? Quality parts reduce comebacks. Comebacks are a cost to the shop and to the jobber.

P — Do you have a mutual positive, professional, trust-worthy, relationship with your jobber?

Too many shops do not want to develop the relationships that are required to be successful in business today. There is a saying that states, “if you always do what you’ve always done, you’ll always get what you’ve always got.” When an shop is not prepared to change there thinking, and support it with their actions, about companies that are truly trying to make a positive effort and contribution to the industry, perhaps it really is time to get out of business. Your life must be over. If we don’t change, and do things differently than we all have done in the past 10 years, what truly is the alternative? Change in today’s business is not an option.

Good independent jobbers are realizing that they can’t sell to every independent shop. They want to choose who they desire to do business with, build a credible business relationship, and receive all that client’s monthly business, get paid in full each month, allowing them to move their own, and their client’s, business forward. This is a fabulous way to do business for both entities, and it sure does a lot to reduce the stress in our industry. Many people in the industry think this is “pie in the sky.” That’s part of our problem. Too bad, because the jobbers and shops that have discovered it, and how both parties work together, have a whole different outlook on their business and life, and their financial statements support it.

Become a “positive shop business” to your chosen jobber.  Open up the communication floodgates, build a credible, knowledgeable, business relationship, and watch your business change for the better.