by Julie Miller, Global Market and Business Development Manager, LORD Corporation and Kevin Creegan, Sales Manager, LORD Fusor Aftermarket Repair Adhesives, U.S. and Canada, LORD Corporation
Automotive part distribution companies continue to consolidate, and it is directly affecting the collision repair segment of the market. The acquisitions are certainly growth opportunities for distributors because it allows them to increase and expand their market presence. At the same time, it also reduces the available choices for autobody repair shop distributors.
This consolidation makes it more difficult for the smaller, independent distributors to offer competitive prices and lessens the distributorship choices available to a body shop, making it important to choose a distributorship that offers good product availability, along with other services such as product- and cost-tracking, and training programs.
It is very difficult in the current business climate for “start-up” distributors to find a niche in the market, and many smaller distributorships find themselves pushed out of the market by the larger companies. During the past 10 years, most of the growth in the distributor market has been through mergers and acquisitions.
This makes it more important than ever for collision repair shop owners need to maximize the benefits of the distributor relationship in this environment. Our partnership earlier this year with Saint-Gobain’s Refinish Solutions Group (RSG) is an example of how repair shops can get the most of their relationship with distributors.
Our exclusive distribution relationship with Saint-Gobain’s RSG allows us to help collision repair shops optimize their repair process to improve profitability for shops, while maintaining the product and technical expertise of network partners. Now that Fusor is part of the full line of products that Saint-Gobain distributes to body shops in the US, Canada and Mexico, it allows us to better support and supply adhesives directly to the OEMs and their distributors to further enhance Fusor’s long-standing OEM connection.
Establishing these relationships and alliances are important to maximize your relationship with distributors. Here are some tips on how to do just that:
1. Affiliate with alliances and associations. A good distributor should offer training programs, either from product suppliers, their own programs or in conjunction with organizations such as I-CAR (the Inter-Industry Conference on Auto Collision Repair). These are valuable “extras” that go beyond just product “selling-and-buying.” Many manufacturers offer programs through the I-CAR Training Alliance that allow attendees to earn credit hours towards certificate designation.
2. Consider “one-stop” shopping. A repair shop should choose a distributor that is able to provide all of the products that are needed for effective, cost-efficient vehicle repair. These products can include seam sealers, adhesives, coatings, abrasives, tapes, plastic sheeting, compounds and polishes, refinish paints, application equipment, and in some cases, replacement parts and body panels. Body shops often want to purchase key materials from one point of contact. Our relationship with Saint-Gobain offers body shops who use as their distributor this type of “one-stop” shopping advantage.
3. Look for competitive but not undervalued pricing. Competitive pricing is always a consideration when buying products from a distributor. Be cautious of a distributor who sells products at the “most inexpensive” price. Are they selling at minimal prices while offering less or no service? There are some distributors that have scaled back on service levels because they are “locked-in” by low-margin contracts with product suppliers. For the repair shop, just getting the cheapest product price might not bring the best level of service with the deal.
4. Create business relationships. There are benefits to collision repair shops and distributors developing business relationships. It’s important for a distributor to be as knowledgeable about a collision repair shop with which it does business as the shop is about its own business. This means any distributors with whom a repair shop develops a relationship should be interested in more than just invoicing and selling products. Both the distributor and the shop owner should have a clear vision of what is expected from the distributor/shop owner relationship. A shop owner should partner with a distributor who knows what products the shop owners need and have the products in stock for quick delivery. Working in a partnership with your distributor is an excellent way to control costs and manage a successful business.
5. Continue learning and be forward thinking. Sometimes a collision repair shop outgrows its distributor and needs to look elsewhere for a company that can provide the products and upgraded services to meet a growing business. A forward-thinking distributor should keep up with the latest advances in collision repair products and impart that knowledge to the shop owner. Larger distributors can often offer continued training, hands-on in-shop demonstrations, certification classes, streamlined purchasing options, and a number of other cost-saving features that would be a competitive disadvantage for smaller distributors.
6. Look for cost tracking: Distributors who offer a cost-tracking system to body shops provide a valuable service. When choosing a distributor, repair facilities should understand that it’s advantageous to work with a distributor offering this perk. For example a distributor may prepare a chart detailing how much product usage a body shop is experiencing. This may help a repair shop to better understand if there is product waste on the shop floor or if a product is not being used properly. Cost tracking can help a body shop to streamline its production approach and workflow, eliminating waste in products usage and labor time. If a shop can be more successful by managing costs, then the distributor will succeed, too. Most of the costs in a shop should be payroll, taxes and parts.
7. Establish an ordering system. Body shop owners should develop an ordering plan with their distributor to guarantee a well-stocked shop. Some collision repair shops make the mistake of relying on last-minute ordering, and then are frustrated when their distributor cannot deliver a product. Shops need to understand that not all products can be available all the time on a moment’s notice. Having a product ordering system makes good business sense and allows a distributor to anticipate and understand a body shop’s product requirements. Working together, a distributor can help a body shop keep necessary products in-stock, and eliminate the hassle of last-minute ordering. Some systems combine cost tracking and ordering in one system. For example, Saint-Gobain offers Total Inventory Management System (TIMS). Body shops can track their costs and distributors can reduce their “hot shot” runs to body shops by allowing them to focus on growing their business.
8. Collaborating to keep up with government regulations. This is another area where cooperation between a distributor and a body shop can be beneficial. There is a constant flow of product regulations arriving from the Occupational Safety and Health Administration (OSHA) and the U.S. Environmental Protection Agency (EPA). Distributors must sell products that meet these regulations as well as keep and maintain technical and safety data sheets. All of this information has to be made available with the product sale, and each product number has its own trail of regulation papers and must be disseminated to the body shops. The body shops must also keep all these regulations and papers on file in their shops.
9. Look for good service and technical know-how. Good service from a distributor is crucial to running a successful body shop. If a technician at a repair facility has a problem or question about how to do a repair or how to use a product, having a distributor who knows the answers can make the difference in the outcome of a repair. A knowledgeable distributor may be even more helpful when it comes to understanding the complexities of the different substrates used in vehicle design. Substrates such as magnesium and aluminum are being found in new applications and may need to be addressed in the repair process. A distributor who is able to help out the body shop with repair techniques and recommend the right products is invaluable.
Developing a true working relationship between a distributor and a body shop offers success advantages for both. What tips do you have to maximize the working relationships with collision repair shops and distributors? Tell us here.