GREENWOOD: The blueprint for investment

Jobbers can help their clients more than they may think when it comes to a shop being properly stocked.

The problem, however, is that most shops don’t stock. There are unrealized benefits: eliminating wait times for deliveries, more on-hand products for quick sales, better customer service and a better image because a professionally-displayed shop looks great.

As a jobber, you can help your customers make this happen. Here are four ways to help.

1. Need

Does the shop need the item? In your mind, your client needs everything you carry. Not so. Evaluate: Are there other lines that cover the same need for the shop? Is the item being recommended to customers? Do enough clients need this item? Will the shop lose any clients if they don’t carry the item?

2. Facility

Does the shop have the space to stock, display and install the item? Many were not designed to carry inventory. Consider the following: Is display space available or would it be more profitable for the shop to display a faster moving item of the same line? Is adequate back-up storage space available? Is the shop willing to assign space to store the item? If space is restrictive, is it possible to purchase a trailer, put it behind the shop and attach an alarm system to it for adding stocking capacity? Don’t necessarily blame the shop owner for not stocking if the facility is not conducive to do so.

3. Finance

Does the shop have the money necessary? Many shops have huge accounts receivable problems. The first order of business would be to see what you can bring to the table to assist them in reducing their receivables. Second, measure their inventory turnover line by line. As a guide, an independent shop should turnover their parts inventory between six and eight times per year. If below this range, then the shop has money tied up that is not working properly. Clean the lines and make sure they get the right parts. This review may also discover that there are other lines that could be added to the inventory, thereby expanding the business.

4. People

Does the shop have the staff to properly sell and counsel clients? Are they properly trained on the items in stock? Do they know when to bring a product to the attention of the client? Are staff even aware of the items? Review what training the shop owner has done with staff to ensure they all know what the shop is stocking. Do they know how to install it properly? If not, the shop may be too embarrassed to admit it and try to end up doing a warranty claim. This is wrong. It’s a cost the industry can’t afford.

This “Blueprint for Investment” – need, facility, finance and people – can help your clients ensure the right stock is being carried and that they see a good return on their investment. It also helps you make sure you are carrying the right stock for them. Many jobbers lose business because they carry what the jobber wants, not necessarily what their shop customers want.

It may be a key relationship builder if approached from the shop owner’s point of view.

Bob Greenwood is an Accredited Master Automotive Manager (AMAM) who offers personal business coaching and ongoing management training for aftermarket shops, focusing on building net income. He can be reached at 1-800-267-5497 or greenwood@aaec.ca.