Making a horrible decision can occur for several different reasons, and some of those decisions are based on a very complex set of unforeseen circumstances. Sometimes, there is the lack of action, which is also a decision of sorts, yet based on indifference. The independent automotive aftermarket has a history of such nonsense and 99.99 percent of what’s happened to us is based on stupidity and a lack of foresight.
Over the last few decades, I have witnessed or been part of so many different trends or fads within our industry, I am probably qualified to host a late night infomercial regarding anything automotive, retail, management, motivational, insurance, and “enhancement” related. Here are some really bad decisions made or ignored from the past, present and possible future.
Independents will always rule (past)
Back in the late 1970s and the early 1980s, a new kid came to town that began usurping market share. His name was big box. Initially, this was seen as non-threatening to the traditional marketplace, and the independent jobbers and warehouses alike discounted the occurrence as a passing fad.
The smugness and lack of recognition by the independent automotive aftermarket to the emergence of the retailers started an avalanche of small jobbers closing their doors as a result of an incredibly ignorant lack of proper response and willingness to change the way we marketed and sold our goods.
When I think of this scenario, I’m reminded of the story about a cattle farmer who was doing poorly. His cows were not producing near the amount of calves they should be, so he purchased the biggest, meanest genetically engineered bull he could find. When the truck arrived to deliver the new genetically modified bull, the old bulls stood on a hillside, discussing the situation while the new bull was being unloaded.
One old bull said, “He’s not getting any of my cows.” The second bull said, “None of mine either, who does he think he is?” The third bull was relatively young, and said, “Well, I don’t have many cows hanging around, but I’m with you fellas.”
When the new bull finally emerged from the trailer it was clear that he was a beast, a force to be reckoned with, as he snorted, pawed the ground and almost knocked down the stockade fence.
As the new bull roared around getting the attention of all the cows, the old bull said, “Good God, I’ll give him half of mine right now to keep from getting hurt.” The second bull said, “I hear you, I guess I’ll give him a few of mine too!”
The young bull started pawing the ground, snorting and generally making a scene, which got the attention of the new bull. The oldest bull said, “Are you, stupid? That freak of nature will kill you for acting like this, you better stop.” The young bull said, “I’m just making sure that three-ton beast knows I’m not a cow!”
The moral of this story is that the independent side of the automotive aftermarket laid down, and ceded a piece of our market share to the new “fake” auto parts retailers, which resulted in us losing much more a few years later. We shouldn’t have acted like the three bulls.
I don’t need the Internet (present)
Today, the Internet is a vital research tool and a media weapon. Granted, it’s also a good way to get a virus on your computer system if left unguarded, but you must allow your employees access to at least your trusted sites.
Will employees try to look at inappropriate things? Probably, but remind them you can check to see who’s doing it, and that they will be summarily caned, flogged and fired. This is an area where we independents can really take advantage, because most of the big box guys have Intranet with very limited access to the entire web.
A good example of this would be a Google search on a part number of any various manufacturer to find an illustration, some specs, or to find an OE part number for a filter on a piece of industrial equipment. Not to mention the various how-to videos on YouTube. Like I said, the retail giants and company-owned stores rarely give their employees unfettered access, but if managed correctly, you’ll make sales that you would otherwise lose.
As independents, we seem to be more willing to adopt types of technology that imparts wisdom at the counter to give us an edge, and it’s exactly where our mindset needs to be. Retail and chain stores focus all of their energy controlling their employees’ use of the Internet. I see it every day because they all buy stuff from me that they have no way of figuring out or have no access to an array of knowledge the Internet imparts. A simple-minded focus on management based on control of employees creates vulnerability.
I am reminded of the story of the shoe-tying expert. He tied and untied shoes all day long and had perfected his knot tying ability to an art form. He was applauded as the greatest most accomplished knot genius of his time. If someone had a shoelace loosened, he was the go-to guy. One day he noticed a man with Velcro straps that fastened his shoes. The next day, he saw a woman wearing shoes with buckles. Then a few days later, he saw a pair of slip-on shoes. He scoffed at the new ideas, which he thought were ridiculous.
The newer type shoes began to become a huge hit with the people in his town. Nevertheless, he rebuffed the ideas, citing all of the possible abhorrent things that could happen to folks that wore shoes without laces, and continued to practice tying shoes. People thought he was somewhat crazy, and told him he should apply his craft to the other shoe lashings and make them better. He refused. In his mind, shoelaces were the best. One day while crossing a highway, he spotted a butterfly. Inspired, he decided to untie and retie his shoes with a knot shaped like a butterfly. As he crouched down and focused his attention on his shoelaces thinking about the intricate design he would need to tie, he was run over by a truck. There are a lot of ways to do things, so don’t get run over by a truck.
Same-day delivery in a rural market is too expensive (future)
The independent market continues to shrink. Program groups merging at a furious pace, as well as warehouse chains gobbling each other up in an effort to streamline and boost profits. All the while, the independent distribution system is ignoring the 800-pound gorilla sitting in the room.
To insult independent jobbers even more, all of the warehouse reps come to us and say, “If you had $400,000 more in inventory, you’d sell a lot more, and not lose sales to the retail guys.” To which we all reply, if we had same-day delivery, we would not need to invest $400,000 more in inventory to acquire a .2 increase in inventory turns while reducing our gross margin return on investment by a dollar. Then they offer to finance this additional inventory, which has a few caveats that are not so enticing. When the real reason they want to do this quite possibly may be since they’ve all merged and bought each other out, they have huge amounts of inventory that needs to earn its keep, and the best way to do that is put in on the street and marginalize their cost exposure. The inventory looks like it’s sold and investors get a larger than average uptick in their stock prices.
If the independent warehouse distribution system does not invest in a rural distribution plan that will include locations like feeder warehouses, undercar warehouses, and a fleet of delivery trucks to accommodate their customers, the small town or rural market will cease to exist for independent jobbers within the next 20 years. Same-day delivery solves the merging inventory problem due to all of the cousins of this industry that have started ‘kissing,’ resulting in children that simply want us all to buy more “French fried taters with biscuits and mustard.” Heck, I like “hotpockets” because they are quick when I feel the urge for something.
The greatest growth potential in the independent jobber and warehouse market will come from same-day delivery. It’s not an additional $500,000 in inventory for every jobber. Sure, I’d sell a few more things, but I’d sell even more if I had same day delivery from my independent warehouses.
Every retail big box store that has possibly more inventory than I do relies heavily on their same-day delivery. I hear about it from my customers that are dealers, and since my business includes a service center, I see it first hand because even I order from them when it comes to an item I need the same day. And guess what, if I don’t have it in stock, there is a greater chance they don’t have it in stock either.
Sadly, this gaping hole in the independent world of distribution is largely ignored. When brought up in discussions, the subject will get changed, or you will be met with a blind-eyed stare. It’s like when I went to the doctor for a check-up, and the blood work came back, my doctor asked me if I drink a lot because my liver enzymes were a little high, and my reply was/is/and will always be, “So, I like French-fried taters, do you?” With biscuits and mustard on the side.”
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