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Sick of Unfair Pricing?


11/1/2002
By Jon S. Owens

It's not pricing - it's inventory management and operating efficiency that will win the day.
 

I love hearing from our readers. Today, Counterman editor Brian Cruickshank handed me a letter from one of our long-time readers.

The letter was from a husband and wife who have just recently decided to sell their one-store operation. In the letter they say that, "After 50 years in business at the same location, we've decided to sell the business and retire." With much regret, they are asking that their names be removed from our mailing list. In my mind, I can't help but picture a beautiful 40-foot sloop sailing off in to the sunset.

What will become of the business is hard to say. Certainly, the automotive parts business is a much different animal than it was just five or 10 years ago, let alone 50!

In another letter received here this week, yet another long-time, loyal reader took the time to share something with us. This letter, however, was not of the same "tone" as the first. This one had to do with this reader's frustration over the pricing discrepancies out in the market. Specifically, he was quite unhappy with his supplier's (a WD) ability (or, lack thereof) to keep him competitive versus some local retail competition.

And so, as one independent jobber operation closes its doors, and the happy, former owners sail off into the sunset, another independent jobber forges ahead, waging a spirited battle for survival against ever-increasing and seemingly insurmountable odds. Here at Counterman magazine, we do not side with any one form of distribution over another. Simply, our only goal is to provide storeowners, managers and sales personnel with the technical and operational tools and information they need to sell more products and become more profitable. The automotive parts business is a relatively decent business to be in right now (don't laugh, many other industries have far greater struggles than we do). There's room for both independently owned jobbers and national retail chains to do well. I just hope we don't ruin it for ourselves.

In this second letter, the writer wonders how long his WD will allow him to be uncompetitive in his market. After all, if he goes out of business, how can that be good for his WD? He suggests that all program distribution groups (including the "closed" distribution groups) unite in an effort to obtain "equitable pricing." And thus begins another round of price pressures ultimately flung back onto the not-so-broad shoulders of the manufacturing suppliers.

In the long run, the most efficient operating system will win. Period. End of story. I believe that independents cannot win a pricing battle. We are beyond that point in our market's life cycle. But, independents can win in many other ways. "Uniting for equitable pricing" is a noble gesture, but probably not worth the time, effort or cost. Uniting to hone a more efficient distribution system, to exploit the weaknesses of the collective competition or to maximize your differentiating qualities and services that customers are willing to pay for - now that's something worth "uniting" for. By doing that, you'll be positioning yourself for a time when you can comfortably, and with great satisfaction, sail off into the sunset.













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