Connect with us

Uncategorized

Constructing Solid Supplier Relationships

The notion of building a partnership with someone who is selling you something is foreign to a lot of people.

Advertisement

Mark R. Clark is owner of Professional PBE Systems in Waterloo, Iowa. He’s a popular industry speaker and consultant and is celebrating his 32nd year as a contributing editor to BodyShop Business.

If you think about it, though, the relationship you form with
your vendors is just as important as the relationship you form
with your customers. My experience as a jobber in dealing with
a vendor I trust has been completely positive, and I try hard
to make sure our body shop customers feel the same way about dealing
with us.

Advertisement
Click Here to Read More
Advertisement

But it’s a two-way street. Both the jobber
and the shop owner need to work toward forming a solid relationship
– which is where the idea of "channel partnerships"
comes in. As a member of the distribution channel for any category
of goods, you should look to your vendors with the same intensity
and concern you apply to your customers.

This trend of constructing a partnership with
a vendor has found great reception in the manufacturing industry.
Sometimes called "single source," the idea is the same:
to avoid duplicating tasks and to focus on the growth and profitability
of both partners. What’s needed to make this partnership work
are the same things needed to make any long-term relationship
work: a solid foundation built on trust, communication and loyalty.

Laying the Foundation

The goods in our business reach the ultimate
customers (vehicle owners) through either three-step or four-step
distribution chains. Most automotive refinish paints go from the
manufacturer of the paint line, to the paint jobber, to the body
shop, to the consumer. Other consumable products add a tier and
proceed from the manufacturer, to the warehouse distributor, to
the paint jobber, to the body shop, to the consumer. In addition,
many products include an independent sales force – manufacturers
reps – hired by the manufacturer to help move its product down
the channel. Regardless of the setup, certain tasks must be performed,
and good vendors strive to exceed these basic tasks and to surpass
their customers expectations.

Advertisement

What qualities does a good paint, body and
equipment (PBE) jobber exhibit? The definition of good service
varies from shop to shop, but typically it includes most of the
following:

  • Inventory: The jobbership we’re holding up as the ideal
    would have an inventory on hand to sufficiently meet its customers
    needs. What this means in terms of a dollar investment is often
    huge. For most jobbers, their main financial asset is their inventory.
    Any inventory (your shop’s included) has carrying costs associated
    with it, which include the interest paid to the bank if money
    has to be borrowed to buy the inventory and the interest that
    could’ve been earned on the money that’s currently invested in
    inventory in lieu of the bank. One aspect of single-line paint
    distribution that appeals to jobbers is the reduction of their
    inventory investment. Carrying two or three complete paint lines
    will tie up lots of money in a hurry.

  • Complete offerings: The issue of "complete"
    is another trait a good PBE jobber will exhibit. It’s always possible
    to buy body shop materials from someone who’s cheaper, but one
    of the ways phone sellers keep their costs down is to offer a
    limited selection of products. Now that you’ve phoned around and
    found buffing pads at a cheaper price, your next step is to make
    more long-distance phone calls searching for someone who sells
    disposable paint suits, body filler or any of the hundreds of
    other products your body shop needs. A complete local jobber will
    stock the products customers need in the depth they require.

But, not every jobber can afford to buy every brand of every product
in the largest-quantity buys. Body filler is a good example. Many
PBE specialty jobbers buy one brand of filler in large orders
to receive the maximum discount, which enables them to sell that
line of filler at a discounted price and still make some money.
If your shop absolutely must have some other brand of filler,
most jobbers can accommodate your request by buying the filler
one case at a time through a warehouse distributor. The good jobbers
will also stock the part numbers your shop buys in the quantities
you need – if you just tell them your desires. Keep in mind, though,
the jobber isn’t buying that brand of filler at the lowest price
and hence can’t always beat the phone seller from Broken Stump,
Idaho, for lowest dollar. What you do get from your local PBE
jobber is the product on hand, in your market, when you need it.

Advertisement
  • Delivery: Delivery is a service area that good PBE
    jobbers really go all out on. While it shouldn’t be necessary
    for a jobber to deliver goods to a single body shop four, five
    or six times a day, it does show how highly the jobber values
    the shop’s business. One of the most obvious ways a jobber can
    save body shop customers money is with timely delivery. If a shop
    owner has to pull a technician off his collision-repair work to
    drive somewhere to pick up the needed items, it costs the shop
    real money in lost production time.

In my experience, good PBE jobbers handle deliveries one of two
ways: About half schedule their deliveries at specific times each
day, while the other half "hot shot" the deliveries
(hot shot means to leave the store with the goods as soon as anyone
calls in an order).

Each method has some advantages for the body shop customer. If
your jobber leaves his store at regular intervals, you can plan
exactly when you’ll receive the goods during the day. On the other
hand, hot shot is great if your shop was the first one to call
in; if not, though, the delivery driver may be on the other side
of town when you need the goods.

Advertisement

At our store, we schedule deliveries – two in the morning and
two in the afternoon. If, however, we have a "good"
customer who needs an emergency hot shot, we’ll be there with
the goods right now, period. The kind of partnership I’m encouraging
you to form with your PBE jobber is one that will get you the
product immediately when you’re really in a bind. As a responsible
partner, though, your shop can’t "cry wolf" every day.
If every delivery is an emergency, the shop has bigger problems
than getting a pint of paint.

  • Credit: An often-overlooked service from your jobber
    is the credit he extends to you (those super bargains from the
    phone seller most often include your shop sending a check in advance
    or immediately on delivery). It costs your jobber money to carry
    those accounts receivable.

Part of the trouble with this business is that the people who
actually pay for 90 percent of collision repairs know exactly
how much a dollar is worth. Insurance companies are the best numbers
people in the world, and if a large insurance company can delay
its claims payable for a single day, the interest earned on that
money is pure profit. Well-managed body shops have arranged their
business finances to accommodate the leisurely arrival of the
insurance check.

Advertisement

Most PBE jobbers offer 30-day terms with no interest on current
balances, but many shops take advantage of this supplier credit
and use that money for other purposes. This is not how a responsible
partner treats his suppliers. In a successful jobber/body shop
partnership, one of the shop owner’s few responsibilities is to
pay his bill on time. As an irresistible carrot, most jobbers
offer a prompt payment discount to their shop customers. The commonly
offered 2 percent discount – given if the bill is paid by the
10th of the following month – adds up to 24 percent annual interest
on the shop’s average material balance. Find another opportunity
to make your money return 24 percent with no risk.

  • Honesty: Good jobbers are trustworthy. If you don’t
    trust your current jobber to do what he says or to ship what you
    ordered at the price you discussed, there is a better jobber out
    there. Honesty by both partners is essential to success.

  • Regular sales calls and visits: Good PBE jobber salespeople
    also offer the advantage of regular sales calls. Among the sales
    services are checking the body shop’s stock on hand against its
    usage, taking back for credit any items not currently needed,
    opening boxes and restocking the shelves so shop technicians can
    find required materials quickly, and offering accurate and current
    information about their products to the technicians.

In an effort to go the extra mile, our salespeople often act as
janitors, too. In many busy shops, it seems no one wants to clean
up their own mess. There’s no question that mixing, opening, pouring
and spraying paint is a messy business, and while a good partner
will try to clean up the shop during a sales call, the ultimate
responsibility for a clean facility rests with the shop management.
Remember, clean shops close sales to customers and make for a
better working environment for the employees. It is possible to
run a productive and neat body shop. I’ve been in many.

Advertisement

Beyond sales visits, I feel strongly that you should expect to
see the jobber principal or store manager in your shop several
times a year. The weekly call by the salesperson will keep the
goods on your shelf and the questions answered among the technicians,
but a personal visit from the jobber management should be an opportunity
for the jobber to say, "Thank you!"

The shop management’s responsibility, then, is to offer suggestions
for the jobber to do a better job. Good communication is a two-way
street. You can’t blame your jobber for a problem you never told
him about, and by the same token, if the jobber never asks you
whether he’s doing a good job, how can he become the vendor you
want?

  • Product knowledge: All body shops should expect a jobber
    to possess product knowledge. The jobber salespeople, both inside
    on the counter and outside on the sales route, should be able
    to answer common questions about what they’re selling without
    having to phone a factory rep. More technical questions are indeed
    the province of the factory rep – who has fewer products to understand
    than a jobber salesperson, who fields questions about clearcoats,
    rubbing compounds and sandpapers all on the same sales call.

But there’s no shame in looking up the answer – the magic is in
knowing where to look. These are the people who should be bringing
you current product bulletins, tech sheets and catalogs, and if
your jobber salespeople haven’t attended their paint manufacturer’s
school and equipment clinics and don’t read the trade magazines,
they’re not doing a good enough job for you.

Advertisement

On your end, your job is to listen when they offer a solution
or suggestion.

  • Education opportunities: Formal training sessions,
    evening paint clinics and in-shop information programs are the
    good PBE jobber’s opportunity to educate his customers on how
    to do a better job, faster. As with any trade meeting, about half
    the benefit comes from what the speaker says and half from what
    you learn from your peers.

Good clinics are not just sales pitches. A successful clinic demonstrates
solutions to real-world body shop problems. If you see something
you like at a jobber clinic, good jobbers will arrange for you
to try it out in your shop and then spread out the payment over
several months to make it easy for you to own it. The telephone
vendor may have a lower price, but the product will come to your
shop in a box; a good PBE jobber will assemble and explain the
product to you.

Your responsibility as a good partner is to attend all the clinics,
listen to the program and ask intelligent questions afterward.

  • Part of the community: Good PBE jobber/partners are
    also members of the local community. They provide jobs, pay taxes,
    contribute to charity and generally put money back into their
    community. It’s your community, too. Help make it a better one
    by dealing with someone in your general area, if not in your city.
Advertisement
  • Responsibility: Your jobber should willingly accept
    responsibility for what he sold you. It shouldn’t be like pulling
    teeth to get someone to pay attention when your shop has a problem.

    As a body shop owner, one of the best ways for you to increase
    your customer satisfaction is to overprep the car on delivery.
    Although you pulled the frame horn to the exact millimeter, your
    customers will be more impressed that you vacuumed and dusted
    the trunk; they can’t see the frame work, but they can see the
    care your shop took in cleaning up their car. For a PBE jobber,
    the best opportunity to increase his body shop customer’s satisfaction
    comes from handling a complaint promptly.

    Good jobbers take the attitude that if their customer has a problem,
    they have a problem. Rather than waiting days for the factory
    rep to appear from far away, the partner/jobber will come to the
    shop to see the problem and to carry the ball to an equitable
    solution. If the vehicle needs to be repainted or rerepaired,
    there’s no sense in waiting. Get the technicians started on the
    fix, get the car out the door and parcel out the blame later.

  • Advertisement

    For example, all the major paint lines work well and last long
    if you follow the directions to the letter, but sometimes the
    paint gremlins cause a mysterious problem and the job doesn’t
    go as planned. We take the attitude that our "good"
    shop partner applied the products like he was told (and like he
    did yesterday and the day before) but that something odd went
    wrong this time. If you bought the product from us and applied
    it like we told you, we’ll stand firm behind it. If this means
    paying time and material cost to redo the job, then that’s what
    we’ll do. In return, we want an opportunity to review the problem
    with the technicians involved to make sure we’re all on the same
    page. We also expect some loyalty from our partner shops.

    • Profitability: The mention of loyalty brings up a sensitive
      area: price. Profit is not a dirty word. Part of what I look for
      in a vendor partner is success. If my vendor can barely pay his
      bills, how will he keep the good salespeople? If he’s driving
      a rusted-out hulk for a delivery vehicle, what kind of message
      does that send? Unless he can operate at a profit, how will he
      buy the inventory I need him to stock?

    By my reckoning, the best service a PBE jobber can offer a shop
    customer is profitability. If you have a true channel partnership,
    both partners need to make money. There will always be someone
    who will sell the product at a lower price, so don’t think you’ve
    found the bottom dollar from the far-off phone guy – there are
    three other far-off phone guys who will sell it to you for less.
    All you have to do is mail away your payment, and wait for them
    to ship you the product (freight collect) – if and when they finally
    get it.

    Advertisement

    Your partner cannot be the lowest guy on the street for every
    item and still provide the services you have a right to expect.
    As every body shop management program points out, the biggest
    cost in any body shop isn’t the cost of the paint and materials
    – it’s the labor time! Look for a partner who can help your shop
    work faster, smarter and more productively.

    What I expect from my vendors and what I offer my customers is
    a competitive price. No vendor can remain in business for long
    by gouging his customers with high prices, and no vendor can remain
    in business for long by selling at prices so low he can’t make
    a profit. What I expect from my vendor partners is the best price
    they have to offer anyone. If I’m spending all my money with one
    warehouse distributor, I expect him to set his computers to sell
    me all his lines at the best price available. In turn, we set
    our computer to sell our "good" customers each line
    at the best price. Our customers don’t have to negotiate this
    price; they automatically qualify for the good price by trusting
    us to be their main supplier.

    Advertisement

    From time to time, other vendors run some super special price
    that catches my eye. Generally, I ask my vendor partner if he
    can match the price – and most often he will. Rather than jump
    ship from your current jobber for every Joe Blow with a lower
    price, take the long view and partner with a jobber who will truly
    have your best interest at heart.

    Built for Success

    Where are these great jobbers? They really are out there – I know
    many of them through my trade association, my paint manufacturer
    and my travels. These are the people with the well-planned, well-attended
    clinics; the clean and clearly marked delivery trucks; the knowledgeable
    salespeople; and the "let-us-help" attitude.

    If this doesn’t sound like your current jobber, don’t rush out
    and dump him. First, communicate what your shop wants from a vendor/partner.
    Maybe all your current supplier needs is some clear guidance from
    you. If this isn’t the case, consider choosing a new vendor with
    whom you can form a lasting relationship – a relationship built
    on mutual respect and trust from which you can both profit.

    Advertisement

    Mark Clark has been a PBE specialty jobber in Waterloo, Iowa,
    for 26 years and is a contributing editor to BodyShop Business.

    Jobber Construction

    Auto-refinish paint manufacturers have worked hard to align themselves
    with good local jobbers. After all, the best paint in the world
    will never get the chance to win over customers if the local jobber
    doesn’t do a good job.

    As our industry compresses in size and the products increase in
    complexity and sophistication, the paint manufacturers are pushing
    their jobbers to forsake all others to become a single-line store,
    which runs contrary to an older, widely held distribution philosophy
    that said paint manufacturers would be best off by having their
    line in as many jobber stores as possible. The result of years
    of supermarket-style jobbers having every brand of paint available
    is that many jobbers have very healthy sales in two or three different
    paint lines.

    Lately, though, each of the paint companies has encouraged the
    jobber to throw out the other guys and become single line. The
    motivation for the paint manufacturer is to form the very kind
    of trusting partnership I’m advocating in this article. However,
    the jobbers with 40 percent of their sales in Brand X are understandably
    reluctant to throw that overboard to sell Brand Y exclusively.

    Advertisement

    But paint manufacturers don’t just judge jobbers on the number
    of paint lines they sell; they’re also concerned that their jobbers
    do a good job for the body shop.

    Whether your jobber is single line or multiple line, what matters
    to your shop is that he does a good job for you.

    Your Half of the Job

    What are your responsibilities in this partnership? They’re truly
    minimal.

    First, you need to be honest in dealing with your vendor partner.
    If he can’t trust you, this partnership won’t go far.

    Second, you need to be loyal. If your partner is afraid you’ll
    jump ship every time someone offers you sandpaper for $.05 a roll
    less, it doesn’t make for long-term success. Pick a partner and
    then stay with him long enough to talk out the problems. There’s
    an old saying in the jobber business: A body shop customer who
    you win over based solely on price will have no more allegiance
    to your store than he did his old vendor.

    Lastly, your end of the deal includes paying your material bill
    on time. Even if it means borrowing money from the bank for two
    weeks each month until your cash flow catches up, it’s still a
    good deal. A 2 percent discount over 12 months really does add
    up to 24 percent interest on your shop’s average monthly bill.

    Advertisement
    Click to comment

    POPULAR POSTS

    Article Exposes Insurance Company Steering Tactics

    Letters

    Alliance of Automotive Service Providers-Minnesota Introduces Anti-Steering Bill

    Refinish

    Spray-Gun Tips for Automotive Painting

    Connect