Jobber News July 2011

Canadian Biodiesel Mandate Bows In • Shad’s R&R Raises Record Amount for Muscular Dystrophy • Bestbuy Adds Toronto Shareholder

MAGAZINE

J U LY

2011

Serving the Automotive Aftermarket Since 1931

WHEN THE BANKS SAY NO BRAKE MARKET PAYOFF FIVE FORGOTTEN FILTERS COOLING SYSTEM DIAGNOSTICS SMART SALES & MARKETING

Warehouse Services Inc., Edmonton, Alta.

BIG GROWTH ONE ORDER AT A TIME 2011 Jobber News Jobber of the Year

Canada Post Canadian Publications Mail Sales Agreement No. 40069240

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Visit AutoServiceWorld.com.

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fuel management

engine manageme n t

h e at i n g & c o o l i n g

diesel

High standards.

Below the surface.

They may look the same, but all parts companies are not created equal.

As partner to 25 of the largest OEMs, Delphi understands vehicles. Whether it’s a Ford, Honda or Toyota, we know each vehicle’s DNA, and apply our OE engineering and standards to our aftermarket parts. We also provide OEbased, leading diagnostic tools and training to keep customers coming back. Providing the benefit of more than 100 years of OE heritage, Delphi is the company that makes the parts cars are born with. It’s time to rethink what Delphi can deliver.

it’s what’s underneath that sets del p h i a pa r t

Delphi Automotive // z Fuel Management With 80% coverage, Delphi fuel pumps deliver fast-pressure rise for quick engine starts; z Heating & Cooling Delphi thermal parts are performance-driven with proven warranty experience; z Engine Management Boasting the industry’s fastest light-off time with its planar technology, Delphi emissions, ignition and sensor parts deliver precise engine performance, reduced potential for malfunctions and maintain emissions regulations; z Diesel With 2,000 bar capabilities, Delphi Diesel fuel injection systems deliver precise fuel quantities to vehicles for optimal emissions; z Training Prepare to repair with Delphi’s total-coverage training and diagnostic services. delphi.com/am

©2011 Delphi Automotive Systems, LLC. All rights reserved.

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This Month

Contents

July 2011

Vol. 79,

No. 7

18 COVER Warehouse Services Inc. may have grown to fill an 80,000-square-foot warehouse, but this Edmonton-based multi-branch jobber hasn’t forgotten what produced the growth and customer loyalty it has experienced.

Warehouse Services Inc., Edmonton, Alta.

BIG GROWTH ONE ORDER AT A TIME

2011 Jobber News Jobber of the Year 4

Over the Counter

Biodiesel Mandate Bows in Canada Day; Shad’s R&R Makes Record Donation; Bestbuy Announces New Toronto Shareholder; Carquest Technical Institute Powers Technical Training at ASRW 2011; Jack Kligman Retires; Fram Challenge Puts Automotive Professionals to the Test; Ride Control, LLC Recognized with Excellence Award; Gates Corporation Adds QR Codes; Spectra Premium Adds QR Codes; Tenneco Offers Counterpeople Cash Incentive Jobber News 80th Anniversary From our pages.....................................................4, 38

& Management: 10 Money When the Banks Say No

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Market Feature: Five Forgotten Filters

28

Shop Tech: Cooling System Diagnosis

The brake segment of the aftermarket is set to be a challenging one in the coming years, but meeting those challenges does have its benefits.

Air is everywhere, but it sure as heck better not be in a cooling system.

Plus: A/C Repairs Gone Wrong.............................. 30

31 New Products Knowledge Building: 34 Smart Sales and Marketing

Non-traditional financing may be a better option for businesses looking for a more flexible lending partner.

Tracker: 14 Market Brake Market Challenges Come with Payoff

Remembering to recommend these often overlooked filters can add to the average sale and provide for improved customer satisfaction.

The keys to success are captured when an organization looks towards continuous improvement in soft skill areas such as sales, sales management, marketing, and communication.

37 38

Autoserviceworld.com Internet Directory Comment THE PRICE IS RIGHT

Departments Appointments...............................................................8 JOBBER NEWS / JULY 2011

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Marketplace Classifieds/Advertisers Index................. 37 3

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From Our Pages Jobber News, February-March 1933 Stray Shots The Motor Show Dinner on January 17th was some affair and even at $3.00 per, a good time was had by all – oh yes the meal was excellent, we nearly forgot that.

And the speeches they were fine. The Hon. Chas. McCrae was right up to his usual form and delivered a fine address – told what a swell country Canada is – sort of made everybody feel glad they didn’t live some other place.

By the way – Bob Coombs deserves a lot of credit and still more thanks for the untiring way in which he kept checking up on everybody’s batteries – we don’t know the specific gravity of that electrolyte he carried, but it seemed to put the spark of new life in many sagging spirits.

Honest – everybody had so much fun they forgot all about the depression and it looked as though business was good again.

Jobber News 80 Years of Serving the Aftermarket 1931-2011

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Biodiesel Mandate Bows in Canada Day Federal 2% Biodiesel Blend Regulations Now Final Standing in the midst of some of biofuel’s biggest supporters in Saskatoon, Canada’s environment minister, the Honourable Peter Kent, announced that the government is moving ahead with the 2% renewable content requirement in diesel fuel and heating oil starting July 1.

“Our government will continue to ensure that protecting our environment, while balancing economic growth and prosperity, remains our priority,” said Minister Kent. “The steps we are taking on renewable fuels, combined with those of the provinces, will ensure a volume of renewable fuel that will reduce annual greenhouse gas emissions by about four megatonnes a year – the equivalent of removing one million vehicles from the road.”

“This requirement will further strengthen the market for renewable fuels, which is good news for our farmers and the environment,” said the Honourable Gerry Ritz, minister of agriculture and agri-food and minister for the Canadian Wheat Board. “Increased demand for feed stocks like canola will ensure an even stronger bottom line for farmers and a stronger agricultural sector.”

A permanent exemption is being provided for renewable content in diesel fuel and heating distillate oil sold in Newfoundland and Labrador, to address the logistical challenges of blending biodiesel in this region. Temporary exemptions for renewable content in diesel fuel and heating distillate oil sold in Quebec and all Atlantic provinces are being provided until December 31, 2012. This 18-month period will allow eastern refiners time to install biodiesel blending infrastructure.

The Canadian Renewable Fuels Association (CRFA) applauded the move.

“This will be a special Canada Day for the renewable fuels industry in Canada,” said Gordon Quaiattini, CRFA president, in reacting to the federal government’s announcement of a July 1 start date for biodiesel blends in Canada.

“Home-grown biodiesel is a cleaner alternative to conventional diesel. It will help moderate price by adding to our fuel supply, create new jobs, and benefit farmers and drivers alike.”

Biodiesel contains no petroleum and can be made from a variety of renewable raw materials or feedstocks, including pure seed oils, animal fats, and recycled cooking oils. It performs comparably to petroleum diesel in terms of fuel economy, horsepower, and torque. Biodiesel is safe to use in all diesel vehicles, and also can be used as heating oil and in a variety of other applications, including marine transportation, electrical generation, farming equipment, and mining operations.

The CRFA reports that independent studies have shown that Canadian-produced biodiesel generates between 85 and 99% less greenhouse gases, depending on feedstock, compared to conventional diesel fuel. It says too that renewable fuels such as ethanol and biodiesel in Canada are a substantial source of economic and financial benefit to rural Canada. Construction of biofuels facilities has generated roughly $3 billion in economic activity, and ongoing operations represent a $2 billion annual economic contribution.

Shad’s R&R Makes Record Donation

The Shad’s R&R charity fundraiser for muscular dystrophy research made a record haul for the cause in this, its 38th year.

With the strong addition of an online auction and return to prerecessionary sponsorship pricing, the fundraiser donated $175,000 to the Muscular Dystrophy Canada organization, which when combined with matching grants from ALS Canada and the Canadian Institute of Health Research, results in an overall contribution to research of $525,000.

Since its inception in 1973, the event has raised more than $3.8 million.

MDC CEO Catherine Sherrard was clearly taken aback by the size of this year’s contribution.

“We may not be able to tell you about major breakthroughs every year, but we could not do what we’re doing without contributions like yours. And to go from $125,000 to $175,000 in one year is just amazing,” said Sherrard.

On hand for the presentations were two families affected by muscular dystrophy. Alex Harold, now heading to university, was accompanied by his parents Janice and Tony. Alex spoke at last year’s event.

Seven-year-old Owen McGonigal accompanied his mother, Angela, for an impassioned presentation of how a healthy baby boy was suddenly stricken with the disease at age 11 months. She too was impressed by the size of the donation.

“I was captured breathless when the cheque was presented. Thank you so much. Thirty-eight Continued on page 6 JOBBER NEWS / JULY 2011

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Gates Corporation Adds QR Codes Gates Corporation announced that its line of Micro-V AT serpentine belts now includes quick response (QR) codes on the product packaging.

The QR codes allow Gates customers to instantly access product information, specifications, installation instructions, selling tips, and troubleshooting information by using an application on their smartphones. The code will also assist jobber stores and service providers in providing valuable point-of-sale information, ensuring increased customer satisfaction and reducing the potential for customer comebacks. g

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Spectra Premium Adds QR Codes Spectra Premium Industries has announced the addition of a Quick Response Code (QR Code) to the product label on manufactured automotive radiators. This new QR Code will provide instant and direct access to installation information in a trilingual format.

Follow us on Twitter.

Get AutoServiceWorld.com News and more by following JobberNews on Twitter.

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Continued from page 4

years is just phenomenal. What this event brings us is a cure for the future.”

In what may be the start of a new tradition, Shad’s chair, John Vanstone, invited both Alex and Owen up to the door prize table to have their pick. Alex chose a coffeemaker for his mom. Sevenyear-old Owen picked a Playstation 3, and then on the very next draw ticket, won a second prize. The move was received with great enthusiasm by attendees.

“The successful formula for Shad’s was set years ago,” said Vanstone. “Everything is donated. It’s a fine day when we all set competitive issues aside to pursue a cure for muscular dystrophy.”

After decades as a reliable, energetic aftermarket professional, Jack Kligman has decided to retire. Kligman, who has graced many an event over the last several decades, was joined by family and friends at a restaurant in Toronto, where colleagues at UView threw a fitting farewell party for him. Son Sandy Kligman, regional sales manager, Ontario and Atlantic Canada with Delphi Product & Service Solutions, recalled how his father had suffered a severe heart attack a decade ago, one he was not expected to survive, and has treated every day since as a gift. In true Kligman style, retirement couldn’t stop him from touching base with us at Jobber News to help a few suppliers along, so we expect we’ll be seeing him as much if not more than ever.

Bestbuy Announces New Toronto Shareholder

Bestbuy Distributors Limited has announced the addition of Paste Auto Parts in Toronto, Ont., to the family of Bestbuy shareholders.

Paste recently moved into a new store location at 260 Toryork Drive in Toronto.

The business is owned and operated by Jacob Yako.

Kim Bishop, national director of sales and marketing for Bestbuy, states, “We are excited to have Paste Auto Parts join the Bestbuy family and look forward to them participating in all of our shareholder events. Welcome Jacob!”

Carquest Technical Institute Powers Technical Training at ASRW 2011

Automotive Service & Repair Week (ASRW) has announced that nine technical training sessions within the ASRW Conference Program will be powered by Carquest Technical Institute (CTI).

Comprising the International Autobody Congress & Exposition (NACE) and the Congress of Automotive Repair & Service (CARS), ASRW is scheduled for Oct. 5-8 at the Orange County Convention Center in Orlando, Fla. “CTI is excited to partner with ASRW with an unprecedented sample of the quality training we offer in North America,” says Chris Chesney, director of training for Carquest. “In addition to providing the majority of technical training at ASRW, CTI will be holding its annual Instructor Summit at the same time, allowing ASRW attendees to see 10 of the top industry technician instructors in action at one event.”

Continued on page 8

For more on these and other stories, log on daily to autoserviceworld.com

Jobber News Editor and Publisher Andrew Ross (416) 510-6763 E-Mail: aross@jobbernews.com Contributing Editor Emeritus Bob Blans Contributing Writers Mark Borkowski, Dennis Mellersh, John G. Smith Sales Manager Jay Armstrong (416) 510-6745 Account Manager Jim Petsis (416) 510-6842 Circulation Manager Selina Rahaman (416) 442-5600 ext 3528.

Customer Service Roshni Thava (416) 442-5600 ext 3555 Art Director Choo Hwee Kuan Production Manager Steven K Hofmann (416) 510-6757 Vice-President Alex Papanou President Bruce Creighton Jobber News is Canada’s longest-established publication serving the distribution segment of the Canadian automotive aftermarket.

It is specifically directed to warehouse distributors, wholesalers, machine shops and national accounts.

Subscription rates*: Canada $49.95 + $3.50 GST + Applicable Taxes per year; $79.95 + $5.60 GST + Applicable Taxes for 2 years; Single Copy Price $6.00 + $0.42 + Applicable Taxes. U.S.A. & Foreign: $62.95 U.S. per year; Single Copy Price $8.00 U.S. * Yearly rates include Annual Marketing Guide (single copy price $72.95 plus $5.00 shipping plus GST $5.46)(U.S. orders payable in U.S. funds). Ontario residents add 8% PST. U.S. & Foreign $77.95 +$5.00 Shipping US Funds.

Jobber News is published by BIG Magazines LP, a div. of Glacier BIG Holdings Company Ltd. a leading Canadian information company with interests in daily and community newspapers, and business-to-business information services. All rights reserved. Printed in Canada. The contents of this publication may not be reproduced or transmitted in any form, either in part or full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior consent.

Canada Post Canadian Publications Mail Sales Product Agreement No. 40069240 “Return Postage Guaranteed” Send change of address notices, undeliverable copies and subscription orders to: Circulation Dept., Jobber News, 12 Concorde Place, Suite 800 Toronto, ON M3C 4J2 Jobber News Magazine (ISSN#0021-7050) is published monthly by the Business Information Group, 12 Concorde Place, Suite 800, Toronto, ON M3C 4J2 US office of publication: 2424 Niagara Falls Blvd, Niagara Falls, NY 14304. Periodicals Postage Paid at Niagara Falls, NY. US postmaster: Send address changes to Jobber News Magazine PO Box 1118, Niagara Falls, NY 14304-1118.

From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone 1-800-268-7742, Fax 416-510-5140, e-mail: jhunter@businessinformationgroup.ca.

Mail to: Privacy Officer, Business Information Group, 12 Concorde Place, Suite 800 Toronto, ON M3C 4J2 Business Information Group 12 Concorde Place, Suite 800 Toronto, ON M3C 4J2 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund (CPF) for our publishing activities.

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ISSN 0021-7050 Online 1923-3477

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Promotion Offers Counterpeople Cash Incentive Tenneco Inc. is offering automotive parts counterpeople the chance to earn $5 for each qualifying Walker direct-fit catalytic converter and CalCat converter they sell this summer. The promotion is available from June 1 to Aug. 31, 2011. Scorecards must be submitted by Oct. 1, 2011.

For more information regarding the “Converter Cash” promotion, please contact your Walker supplier. For additional information about Walker exhaust products, please visit www.walkerexhaust.com. g

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Goodson Signs Distribution Agreement Goodson Tools and Supplies for Engine Builders of Winona, Minn. has announced a distribution agreement with Parker Research Corporation of Clearwater, Fla. “We’re particularly proud,” Dave Monyhan, national sales manager, says, “to bring Parker Research Corporation Magnetic Crack Detectors to the automotive market.

Parker has been building and supplying these units to the industrial market for decades, and they’ve seen fit to give Goodson the exclusive right to distribute their products to the automotive aftermarket.” Goodson has added two Magnetic Crack Detector models to its product line. Both models are available in 115V and 230V AC units and carry a full one-year manufacturer’s warranty.

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For detailed information on the CTI conference sessions, including length, time, and instructor, as well as the entire conference program schedule, please visit www.NACEexpo. com or www.CARSevent.com.

Fram Challenge Puts Automotive Professionals to the Test

Fram has launched its first interactive online training program designed for counterpersons, professional technicians, and wholesale distributors.

The 2011 Fram Challenge includes a threepart video training series created and moderated by Honeywell CPG Technical Trainers, Fram engineers, and engine experts. The Challenge runs from June 1 to August 31 and outlines different key aspects of oil filtration.

The promotion is open to residents of Canada, excluding Quebec.

After registering at www.FRAMChallenge. com, automotive professionals will gain access to one new training video each month. The videos cover Oil Filter Anatomy; Filtration and Engineering Testing and Cartridge Filters; and Service Bulletins and Extended Oil Changes.

Participants who complete all three modules will receive a customized Certificate of Completion. For every video completed, participants will be entered into a random drawing for a chance to win one of the five $1,000 American Express-branded Reward Cards. Additionally, the first 3,500 eligible participants to complete all three video tutorials will earn a Carhartt Long Sleeve Workwear Shirt.

Further details can be acquired by visiting www.FRAMChallenge.com.

Ride Control, LLC Recognized by Frost & Sullivan

Gabriel (Ride Control, LLC), the originator of the world’s first automotive shock absorber in 1907, has been recognized by Frost & Sullivan with the 2010 Product Differentiation Excellence Award in the Premium Shock Absorber Aftermarket.

Gabriel’s premium MaxControl product was selected on the basis of Frost & Sullivan TEAM Research methodology, which provided a platform for benchmarking best-in-class industry players based on a series of evaluative criteria.

“Ride Control (Gabriel) leverages technological features from its top-tier products, like MaxControl, into its entire product portfolio,” said Frost & Sullivan in a statement. “The company consistently tailors its product offerings to customer and installer demands and to the vehicle population in general, offering consumers a range of ride control products that address various end-uses.”

According to Frost & Sullivan, Gabriel MaxControl was equal to or led the competition in all business performance categories explored: features/functionality, quality/complexity, customization, mix, target market, and unique name/brand recognition. Gabriel’s overall weighted score of nine out of 10 beat all the premium shock absorber competitors.

APPOINTMENTS

Beck/Arnley has announced that Raymond Savard has joined the company as national sales manager for the Canadian market. In this position, Savard will work with current distribution customers for Beck/ Arnley while focusing on growth through new distribution and channel partners. He will also represent the Beck/Arnley brand in local markets across Canada, buildRaymond Savard ing awareness and excitement among technicians and the commercial aftermarket.

Savard will work closely with Specialty Sales & Marketing, Beck/Arnley’s sales agency in Canada. Savard reports to Paul Farwick, vicepresident of sales for Beck/Arnley. Savard has a successful history in the automotive industry, having started in the business in 1978 as a truck driver and soon moving to a sales representative position with McKerlie-Millen. Savard joined Carquest Canada in 2006 and held positions including NASF regional manager, national account manager, and national sales manager.

PartSource has appointed former FederalMogul Canada sales executive Bruce Whyte as associate vice-president of commercial sales.

The appointment is part of PartSource’s commitment to build and grow its commercial parts business, says the company. A veteran in the automotive aftermarket, Whyte brings insight and passion to the PartSource team, and is wellpositioned to help the team grow PartSource’s commercial business. He joins PartSource from Federal-Mogul, where he spent the past 19 years in progressively more senior sales leadership roles. He has held various positions across Canada, most recently managing the Ontario sales team as well as key national accounts, including Canadian Tire.

Bob McBroom, formerly engineering manager, has been appointed vice-president operations/ engineering for Dura-Bond. In his new position, McBroom will lead the Dura-Bond efforts to oversee engineering, production, environmental, new product development, new production processes, and maintenance activities. He will lead an experienced team to facilitate for future growth of the company. Dura-Bond has seen strong growth in the aftermarket during the last two years. McBroom has been with Dura-Bond for over 27 years. He developed the popular Dura-Bond High Performance bearings widely used by the racing industry today, along with many other engineering achievements.

JOBBER NEWS / JULY 2011

06/07/11 9:35 AM

NVA 016 Proforce BrakePads Jobber News Jan11 v5 01/02/11 1:24 PM Page 1

One company, countless performance solutions.

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Installation kit included with Ceramic Brake Pads

416.249.5050 • 1.877.488.5058 www.proforceautomotive.com For more information contact Dean Weber at dweber@proforceautomotive.com ProForce is a division of NovaEast Warehouse Distribution

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04/07/11 11:32 AM

When the Bank Says No:

MONEY & MANAGEMENT

Non-traditional Financing I

Mark Borkowski is president of Mercantile Mergers & Acquisitions Corporation.

Mercantile specializes in the sale of mid market companies sold to large international strategic or private equity buyers.

Barry O’Neill is Managing Partner of Zed Financial Partners. He can be contacted at www.zedfinancial.com

n the business of investment banking, we are exposed to all kinds of difficult situations that business owners can face.

Sometimes our client’s need for financing is driven by an unexpected business or sector slowdown; other times, it is for acquisition or growth purposes.

But more often than you might think, a need for capital will arise as a result of a breakdown of existing credit facilities through no real fault of the borrower.

I spoke to one of my colleagues in the financing arena, Barry O’Neill of the Managing Zed Financial Partners. He had this advice: “Some of the most disheartening circumstances we’ve seen have involved management becoming ‘blindsided’ by their traditional financial partners. A business owner can have a long-standing relationship (along with shining credit rating and excellent margins) with a traditional lender and still find his loan called, or ‘no-brainer’ requests for further capital declined. Changing market conditions, concerns around exposure to industry sectors, and risk management strategies can change a traditional lender’s interest in a client, and the effects can be devastating.”

But there are steps that business owners can take to go on the offensive and secure the liquidity they need to grow outside of traditional financing sources. Business owners and managers must learn to become as creative and versed in options for financing their businesses as they are in other facets of operations.

Sometimes it is a matter of looking for another financial institution that better understands the business. Other times, it requires re-examining the assets of a company from a different perspective.

Alternative or non-traditional financing options can help to facilitate and allow for the execution of business plans.

Often access to the appropriate financing may solve liquidity problems or even present hidden and creative opportunities for freeing up cash flow. Several unique structures may be employed in order to ensure a successful transaction and to maximize the availability of funds. Knowing where to find the different types of financing is crucial. Barry O’Neill suggests a few options.

The U.S. Option

An increasingly viable option for Canadian businesses is U.S. private equity and private debt lenders. In Canada there are a limited number of such sources of capital available, but in the United States, there are hundreds of different institutions that are actively seeking 10

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opportunities in Canada. Because of the vast amounts of money available south of the border and a limited number of transactions, many of these financial institutions are looking for opportunities outside the United States.

Because of the size and specialization of the U.S. financing market, there are numerous funds that specialize in specific industries. Understanding industries allows them to better assess the risks and rewards associated with the financing, resulting in a better financial partner. As a result, there is growing demand for more creative financial structuring to solve liquidity issues. Companies seeking U.S. funding should work with financiers who understand the industry sector and business, so they can work with the company as it changes and grows.

Getting Creative

Regardless of whether the source of capital is domestic or foreign, the key to securing capital is presenting value where others don’t, and then translating that value into a workable solution for a lender. There are many ways to put financing together. It’s a matter of being creative and knowing where the money is. Some examples of different vehicles for creative financing that we’ve secured through non-traditional sources include:

Equity or Quasi-Equity Partners

A well-suited, strategic financial partner, who understands the business and industry, can provide the appropriate financial structure to take the company forward. These partners typically bring cash injections to relieve immediate problems and supply sufficient liquidity to take the company forward, and oftentimes are critical to the future viability of a company.

Private equity partners can be important tools in situations where owners want to retire or semiretire and transition the company to family or a management group, but wish to extract some wealth from the business.

Refinancing of Subordinated Debt

Subordinated debt may need to be restructured or refinanced in order to alleviate liquidity concerns. Strategies for accomplishing this objective include: purchasing the debt at a discount; converting debt to equity; exchanging the debt for future royalty payments tied to revenue or cash flow; moving the debt offbalance sheet.

Continued on page 12 JOBBER NEWS / JULY 2011

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Cash Flow Management

In many cases, there is significant capital being tied up in working capital. Various operational specialists can help to assess cash flow restrictions and assist companies to unlock liquidity by putting in proper controls and systems.

Securing Of Future Cash Flow Streams

Cash flow streams that are associated with long-term contracts and a high degree of certainty may be sold to a third party.

Sale Leaseback

Land and/or buildings can be sold to certain lenders at market value or greater using long-term sale-leaseback agreements. In this case, the financier relies on the company’s business plan and future cash flows to support future payments.

Refinancing “Depreciated” Assets

Specific machinery and equipment within a company may have little or no collateral value to traditional lenders. Other lenders, such as appraisal or auction companies, may attach value to these assets that allow other financiers to lend against them regardless of whether they have been fully depreciated.

Intangible Assets

Many companies find that intangible assets (i.e., patents, trademarks) carry little or no collateral value to traditional lenders.

However, some non-traditional lenders will lend against such assets. In fact, there are firms that will attach a value to intangible assets and guarantee that value to lenders.

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Tax Structures

Off-balance sheet structures may generate additional liquidity.

For example, intellectual property may be sold into a separate company, which reverts back to the “parent” company after a period of time.

So what is Barry O’Neill’s bottom line? “Accessing capital can be expensive, time-consuming, and incredibly frustrating.”

But it doesn’t have to be, and there are a number of other options outside traditional financing sources. One of the most important advantages in maximizing a company’s access to capital is finding the most beneficial source of capital from the most ideal financial partner.

In many cases for Canadian businesses, banks and traditional sources of funding are the ideal financial partners. The convenience and the efficiency of the commercial branch suit most situations effectively, and commercial bankers work hard to service their clients. However, for businesses in periods of transition, whether caused by distress, explosive growth, or the potential for a change in ownership, the traditional lenders can be impediments and obstacles. There are numerous other options available to Canadian businesses, and with a little research, business owners and managers can unlock a realm of new possibilities that suit their situation and best serve their needs.

There are countless ways to improve business liquidity and it makes sense to review options regularly, before additional liquidity is necessary.

With the wide availability of creative alternative options for financing one’s business, sometimes a “no” from your traditional lender might actually do you a great favour, resulting in a better financial partner. As a result, there is growing demand for more creative financial structuring to solve liquidity issues.

JOBBER NEWS / JULY 2011

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MARKET TRACKER

BRAKE MARKET CHALLENGES

COME WITH PAYOFF

Benefits of Premium Taking Hold

By Andrew Ross

T

he brake segment of the aftermarket is set to be a challenging one in the coming years, but meeting those challenges does have its benefits.

According to research firm Frost & Sullivan, the challenges will abound in both the friction market, where there are some welcome changes in store, as well as in the caliper and hydraulics portion of the business.

The friction market, still a leading concern for every player in the aftermarket as it is one of the automotive services most frequently purchased by consumers, is expected to experience growth and an evolution to premium.

The North American friction parts aftermarket, which includes brake pads and brake shoes, generated manufacturerlevel revenues of US$1.3 billion in 2009, says the researcher.

Increasing vehicle age, which puts more cars and trucks in the prime replacement period for brake components, and newer vehicle applications that require more expensive parts, will drive future growth.

Friction parts will generate steady growth for manufacturers and distributors in the aftermarket, with demand for premium pads and shoes growing at the expense of low-priced products.

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As production has shifted away from North America, an increasing number of distributors, installers, and vehicle owners are willing to pay for higher product quality, better warranty terms, and reliable customer service, rather than for a low-priced replacement part.

Interestingly, says the researcher, what has occurred is that what used to be considered premium upgrades are now regarded as standard. One need look no further than the way that ceramic formulations, once regarded as a premium upsell, are now considered to be the starting point for those applications specifying their use.

Furthermore, companies that were competing mainly on the basis of price leadership actually lost market share between 2008 and 2010, despite an economically challenged market.

With this in mind, it is important for all those in the market to recognize the need to carefully align the pricing of their good, better, and best line-up to support the value of their premium offerings.

However, the push for quality is not exclusive to the generally recognized national brands, says the researcher.

Strong private-label competition from leading distributors threatens the brand value of traditional manufacturers.

Most retail and wholesale customers promote their own inhouse brands at the expense of traditional suppliers, who have invested large sums to build brand loyalty. This trend diminishes the power of manufacturers to enhance their value, since the company’s name is no longer on the product.

The fact is, says Frost, private-label brands account for about half of friction parts sales in the aftermarket. That hurts traditional aftermarket brands, and forces manufacturers to compete with their own distributors.

It should be noted that in its discussion on private-label brands, Frost did not make mention of so-called “white box” competitors, although it did stress that manufacturers must be prepared to position and defend the value of their brands against low-priced alternatives.

On this point the researcher takes a bold position: Manufacturers are unlikely to survive over the medium to long term if their customers are not willing to carry the company’s own brand, which allows it to recover the cost of developing, testing, marketing, and supporting its products.

They should focus on superior product quality and customer service so that distributors, installers, and vehicle owners will pay more for a recognized brand. Suppliers still cannot afford to overlook the opportunities in private labelling. However, the Continued on page 16 JOBBER NEWS / JULY 2011

04/07/11 2:22 PM

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04/07/11 8:27 AM

Continued from page 14

50 INSTALL

Install 50 Goodyear Engineered Products And Choose Your Reward

For further details, contact your local Goodyear Engineered Products Rep. or call 1–800–ASK–GDYR www.goodyearep.com The GOODYEAR (and Winged Foot Design) trademark is used by Veyance Technologies, Inc. under license from The Goodyear Tire & Rubber Company.

Goodyear Engineered Products are manufactured and sourced exclusively by Veyance Technologies, Inc. or its affiliates. ©2011 Veyance Technologies, Inc. All Rights Reserved.

profit margins are lower in this market segment.

“To drive growth, the aftermarket should identify and attract customers that have deferred the purchase of a new vehicle or maintenance of their existing car or truck because of the current economic recession,” says the analyst. “Suppliers must also be able to demonstrate that their products will reduce service comebacks and drive repeat business.”

Aside from the challenges and opportunities that abound in the friction market, sellers of hydraulics and calipers face their own daunting tasks in regard to parts proliferation, but there is a bright spot: The current economic environment is encouraging people to keep their vehicles longer, driving growth in the North American brakes aftermarket.

Demand for durable brake components, such as calipers, master cylinders, and hoses, will also increase in the coming years, reversing a longstanding downtrend for many parts in this category. The result will be increased competition that drives some suppliers out of the market.

“The decline in vehicle sales has a corresponding effect on average vehicle age; today, the average vehicle age in the United States is about 9.5 years,” notes the analyst of this research service. “In two years, the average U.S. passenger vehicle will be over 10 years old, putting more vehicles in the prime replacement period not only for routine maintenance parts, but also for many long-lasting components such as hoses and master cylinders.”

These growth rates may not seem impressive on the surface. However, for some of these components, it is the first time since Frost & Sullivan began tracking the category that suppliers expect any growth at all. Unit shipment demand for semi-loaded calipers will increase by 3.7% annually. Demand for master cylinders will grow at a rate of 0.3% annually. Total manufacturer-level revenues will increase by 3.1% each year from 2009 to 2016.

The challenges come when considering what suppliers need to do to take full advantage of this opportunity. In short, you really need to be in the all-makes, allmodels game – the import vehicle market and the decline in GM market share have changed vehicle demographics forever – and the numbers required for that are truly staggering.

This includes approximately 3,650 calipers, 3,650 brake hoses, and 3,525 additional hydraulic components.

“The high number of parts that the aftermarket requires makes it difficult for suppliers to plan production, manage inventories, reduce costs, and meet all customers’ needs in a timely manner,” says the analyst. “The high bargaining power of larger retailers and warehouse distributors (WDs) puts pressure on suppliers to cover all vehicles, maintain fill rates of at least 92%, and offer the best price to win the distributor’s business.”

While Frost does not suggest that suppliers be all things to all people – they actually suggest that suppliers choose between calipers and hydraulics – they do suggest the option of becoming adept at sourcing and repackaging for other manufacturers to create a full-line distributor.

(And, while this is not a point mentioned by the researcher, to this writer this sounds a lot like private labelling that can be done at the distribution level too, with the aforementioned issues going along with it.)

There are opportunities for suppliers to create niches in this market, though, says Frost, such as developing a cost-effective line of new calipers to compete against the remanufacturers that currently dominate the category, or focusing on high-performance upgrades rather than standard replacement parts. Suppliers can differentiate their products or services to develop competitive advantages.

All in all, the brakes aftermarket can be expected to forge ahead as one of the best opportunities for aftermarket players – from suppliers to the service bay – to distinguish themselves in the eyes of the customer. Few service occasions offer the kind of frequency and profit potential that the brake service business does, and according to research, it looks like this characteristic can be expected to improve.

For more information on Frost & Sullivan research, including the “North American Brakes Aftermarket: Friction Parts” and “North American Brakes Aftermarket: Calipers and Hydraulic Components” studies, visit www.frost.com.

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JOBBER NEWS / JULY 2011 11-05-31 12:17 PM

05/07/11 2:06 PM

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NACE P17.indd 17

05/07/11 1:28 PM

COVER STORY

Warehouse Services Inc., Edmonton, Alta.

BIG GROWTH ONE ORDER AT A TIME

By Andrew Ross

2011 Jobber News Jobber of the Year Continued on page 20

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COVER STORY Continued from page 18

T

o build a business from the ground up is no easy task; growing without losing your identity along the way isn’t to be taken lightly either.

And so it was with Edmonton’s Warehouse Services Inc. Even with its nondescript name, over the past two decades WSI has gone from a few hundred square feet tacked onto the back of a muffler shop to a full-line, multi-branch jobber, powered by an 80,000-square-foot main warehouse and head office.

The transition from exhaust specialty house to its current size and scope is a startling one.

Scott Scherr, who took over the reins of the operation from his father Wayne in 1992, explains that what began as a gradual evolution quickly exploded.

“We had 800 square feet in 1987. It was a small warehouse, then we moved to 3,000, then to 10,000, and had to sublet half of it because it was just way too much.

“Going from where we were to where we are now, we went from two stores to four in two years. We bought a couple of stores, and opened a couple of our own along the way. It was a huge learning curve.”

Now with three Edmonton area branches in addition to the main warehouse at the south end of Edmonton – Edmonton North, Sherwood Park, and Leduc – plus the Border City branch in Lloydminster, the organization seems comfortable with its size.

“Now in hindsight, it wasn’t really a lot, but our threshold was lower back then, ” he adds with a smile.

While WSI has accumulated a broader and broader range of products as it grew, it all started with the exhaust business.

“The story, as Wayne tells it,” says Scott Scherr, “is that the warehouse got started when he got a phone call. Someone from the local warehouse called Wayne about buying their exhaust inventory, which he did. He then went through the catalogue and faxed in a fill order with the company.

“They called back and asked ‘who are you?’ and he said, ‘I’m your new distributor.’”

They sent a rep out and made a deal, and WSI was born “literally in a back alley behind the muffler shop.”

Rick Gibson, for whom a memorial golf tournament is held to this day, was WSI’s first salesman. Gibson, a close

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Above and previous page show some of the crew at WSI’s main location, the 80,000-square-foot warehouse, store, and offices in South Edmonton. The team is staffed with many experienced team members, including Mary Mackie (centre left) the 2008 Jobber News Counterperson of the Year.

associate of Wayne Scherr, was key in promoting growth in the early days of the business. It wasn’t long before a U-joint supplier join them, adding another undercar component; brakes came next, and before long they were dabbling in a broad range of components.

Continued on page 22 JOBBER NEWS / JULY 2011

05/07/11 8:37 AM

99-5305 I Client: ACDelco I Project: WSI Jobber News Ad I Date: 11-06-28 I Trim: 8 1/8x10 7/8”” I Bleed: 1/8” I Colours:

C

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K I Ad#: ACD-MISC-CONG-11-4CF-603-EN

CMG MARKETING • 1125 Leslie St, Toronto, Ontario M3C 2J6 • T 416.646.3050 • F 416.646.3051

I Docket#:

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04/07/11 8:32 AM

COVER STORY

Continued from page 20

The Leduc store is also staffed with a strong mix of experience and youth.

Then WSI signed on with Consolidated Parts Distributors’ Parts West program, which gave them the first look into being able to check stock online – “it seemed pretty high tech then” – and when Uni-Select acquired CPD, in 1993, they moved with it. “That just opened it up for us,” says Scherr.

He gives a lot of credit for the growth of WSI to having access to the breadth of parts available though the Uni-Select network, and the flexibility that the organization offers its members.

Scherr says that the advantages of Uni-Select membership have been key to their success. Even so, a growing customer base, the consequence of going from two, to four, to five stores, necessitated an expanding supply base too, and that led to yet more growth.

“We’re still Auto Parts Plus, but we wanted some differentiation, and that’s when we signed on with ACDelco, five years ago” – a pairing of programs that will be familiar to many in the Canadian aftermarket.

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“It got to the point that our old warehouse, at 20,000 square feet, literally had no space left. There was not a spot in the warehouse that you could bring stock into. We had to come in in the morning and pull stock out of the building just so that you could move around.

“Weather permitting,” he adds.

What followed was a daunting expansion to 80,000 square feet that would give any jobber pause for thought. And yet Scherr soft-pedals its impact.

He says it’s important not to try to be all things to all people.

“You do have your choice to pick and choose what you want to take on. We’re not specialists in everything. We don’t think we’re better than anybody else. We just try to come in every morning and earn that phone call.”

In the past that has meant even going so far as to supply a customer a microwave for their lunchroom.

“Where you have to stand out is with your service and your people. We have to battle every day with all the other people in town. Really, all our competitors have good people too.”

The way Scherr sees it, though, an important part of continuing that success is to think small.

“As far as I’m concerned, this is still that same 3,000-squarefoot warehouse that it was 20 years ago; the threshold just moves. There are more people here, so you can handle more volume; some of the things can get delegated, but the premise is still the same. The client phones, you look after him the best you can, and get him the right part the first time. Hopefully he calls back if you’ve done a good job.”

With a strict no-retail policy, WSI has to earn every order.

Delivery trucks are unmarked, there is no Yellow-Pages ad, and even their white-pages listing does not mention the word “automotive.” To call them, you have to know them. That makes those personal reputations even more important.

“We have been very fortunate along the way that everyone says we have the best people, and I really believe we have been able to surround ourselves [with] the best people.”

JOBBER NEWS / JULY 2011

05/07/11 8:38 AM

WSI’s North Edmonton branch is a good example of the non-descript storefront. The team there, however, clearly has some personality.

Scherr boasts that WSI has a strong contingent of longserving employees, including four experienced field reps, and even a few second-generation hires.

For his part, having taken over the sales management role a year ago, Scherr is enjoying keeping in direct contact with many clients.

Scott Scherr remembers it all began with the exhaust business, which remains a key segment for WSI.

Still he recognizes that feet on the street, as good as they are, aren’t enough.

Accordingly, WSI recently made a major investment in the Epicor (formerly Activant) Eagle system.

Continued on page 24

Excellence in Action

Congratulations, WSI, on your Jobber News Jobber of the Year Award!

And congratulations for taking the next step in your growth strategy by implementing the Epicor Eagle™ business management solution.

We look forward to supporting your success for many years to come.

www.activant.epicor.com

1-800-380-9015

automotive.marketing@epicor.com

©2011 Epicor Software Corporation, formerly Activant Solutions Inc. All rights reserved. Epicor and the Epicor logo are registered trademarks of Epicor Software Corporation.

Activant is a registered trademark and Epicor Eagle a trademark of Activant Solutions Inc.

JOBBER NEWS / JULY 2011

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05/07/11 1:54 PM

COVER STORY

Continued from page 23

WSI’s main warehouse has motion sensitive lighting that turns off when a zone isn’t being worked in; in the background a WSI delivery vehicle receives some attention.

Congratulations to Warehouse Services Inc. for being selected Jobber of the Year!

• From your friends at Federal-Mogul Canada Ltd.

The Border City branch in Lloydminster is by far the most distant branch for WSI to service.

“We’re looking at that to provide a strong IT foundation as we go down the road, and hopefully open or acquire more branches and expand opportunities for our staff. This is a big jump for us.” What he calls “bells and whistles,” like bar code receiving, more sophisticated pricing functions, better tracking data, and so on, all add up to building efficiency and competitiveness.

Continued on page 25

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JOBBER NEWS / JULY 2011

05/07/11 8:41 AM

The Sherwood Park branch and crew.

“You’re just trying to keep up and provide that value.

Clients don’t have to call here; they choose to call here. We try to treat them as we would want to be treated.

“When you didn’t have the technology, it was a lot of work to make phone calls and get the quotes. So, once you built a relationship, it was hard to get a guy to change over.”

With price checking multiple lines from multiple suppliers now possible in WAREHOUSE SERVICES INC. under a minute, keeping customers closer than ever is increasingly important.

And Scherr is ever grateful for the loyalty WSI’s customer base has shown.

“We were second, third, or fourth call. Back in the day, when no one else wanted to look after it, we tried to look after it, one invoice at a time. And some vendors [who] took a chance on us when we were nobody, their relationships have continued all the way through.

“We’ve really been bootstrapping all the way through. This got started out of the back pocket of Wayne. We’ve scratched and clawed our way to here, and I believe we and our staff deserve to be here.”

Still, Scherr says, the future is openended for WSI. “Our goal was that if we ended up at 50 stores, great. If we ended up at seven stores, great. If we ended up at four stores, great. Yes, a building this size takes a lot of money, but now that we have a handle on this side of it, it is time to expand, which means more products and more clients.

“There are some new features with the new computer system that will help overcome some of the limitations, that will help us get to the next level. I don’t know where the next five years will take us. We try to offer all the bells and whistles that we can at our size: incentives, rewards, etc. It’s just trying to keep that face in front of the client.

“Our job is still to find what the clients need and fill those needs. I don’t think we do anything different now. I believe that we still try as hard now as we did www.spectrapremium.com back in the early years every day. We are 1 888 910 8888 constantly aware of what our competitors do, but we just try to do our thing.”

wsi

THE PREMIUM CHOICE

Jobebr News Congratulation2.indd 1

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11-06-30 11:56

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05/07/11 8:46 AM

MARKET FEATURE

Five Forgotten Filters Recommending Service Builds Average Sale, Customer Satisfaction

S

For the jobber with a retail presence, this segment of the filter market can lend itself particularly well to the doit-yourselfer, as many more vehicles have easily accessible cabin air filters than used to be the case.

ince the oil change is the single most frequent type of service, it is not a surprise that the oil filter receives the kind of attention it does.

With the exception of the occasional blog posting about not needing to change your oil filter every time you change the oil, the oil filter and oil change are generally considered to exist in a oneto-one relationship.

For other filters, the socalled “forgotten” filters, service is often done at the suggestion of the service advisor or technician, regardless of the recommended service interval.

With this in mind, we offer a brief reminder for aftermarket professionals.

Fuel Filter

Changing a fuel filter isn’t what it used to be (dead easy). Depending on the model, it can become readily apparent why techs might shy away from this. It can end up as a very involved job, best included with other service from a labour cost standpoint. However, if driveability complaints bring a vehicle into a service bay – especially if there is evidence of fuel pressure or flow rate deficiencies – any inline fuel filter should be

PCV/Breather Filter

Some PCV (positive crankcase ventilation) systems have an easy-to-overlook breather filter.

Okay, so this is the granddaddy of all forgotten filters, tucked away inside the air filter element. And the truth is, you may not see that many of them at all any more, as the application list is getting pretty old. But if your customer base is tilted toward older vehicles, and especially if you have a significant DIY customer base, you should dedicate at least a little shelf space to this item. Having it on hand can add a few dollars to the average sale, and it’s an easy sell too, as chances are very good that it hasn’t been replaced in some time; it’s also an easy job, and an even easier addition to an air filter replacement.

Cabin Air Filter

Cabin air filters (CAF) have been working their way into the market in growing volume since they were introduced in the first models in the 1990s; cabin air filters had less than 5% market penetration in vehicles in operation in 1999.

According to researcher Frost & Sullivan, the U.S. cabin air filter (CAF) aftermarket expects to grow at a compound annual growth rate (CAGR) of 11.5% in unit shipments and 14.1% in revenues between 2010 and 2017.

Continually reminding installer customers of this opportunity has proven a challenge for some jobbers, but the inclusion of the cabin air filter as a part of routine maintenance is starting to take hold.

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replaced as a matter of course.

In fact, the fuel filter is the wise early replacement before looking to the fuel sender and pump for a malfunction there, or a clogged strainer.

Air Filter

Back in the old days, replacing an engine air filter took about 30 seconds. The large, round housing that sat atop the engine was immediately recognizable by all but the most uninformed motorist, and replacement was a one-wingnut job.

In a Jobber News article from the 1960s one supplier, in referring to the persistent potential of this market, stated that air filters were always going to be required “in every shape and size but square.” Now, it seems, they are virtually all square, and getting to them can be a frustrating affair.

This inaccessibility, however, does not make their replacement any less critical to the proper operation of an engine.

For, despite all the technology that is packed under the hood, the internal combustion engine remains an air pump of sorts; restricting the flow of air into the engine robs power and fuel economy. Engineers know that if it weren’t for the dirt and rocks in the air and on our roads, the engine would be better off without an air filter at all.

But since leaving it out would drastically reduce the life of the engine – think about pouring a bucket of sand into an engine a bit at a time over thousands of kilometres, and you’ll get the idea – the next best option is a clean air filter.

JOBBER NEWS / JULY 2011

05/07/11 11:30 AM

MARKET FEATURE

Transmission Filter

A transmission filter is the least considered among filters; usually it is not until major service is required that a transmission will even get considered for service by the consumer. If automotive service is viewed as akin to going to the dentist, consumers see transmission service as the root canal of service-bay visits.

While there is much evidence to prove that transmission service need not be so painful, this view persists. While

transmission flushes and fluid replacement have become more popular over the past few years, this may not always include the transmission filter replacement. It should.

Transmission filter replacement can be a key service that not only extends the operating life of a transmission, but can provide an opportunity to inspect for early signs of damage before it stops a car in its tracks, bringing a hefty repair bill with it.

About Recommended Service Intervals

U

nlike many components, these forgotten filters do

In addition, the common-sense approach should

not tend to have consistent recommendations;

be employed: If parts for a fuel system job are being

replacement intervals can very widely by make and

ordered, recommend a fuel filter be included; if a

model.

blower motor is being replaced on an under-dash

Accordingly, owners’ manuals and other service

CAF-equipped car, make that recommendation.

interval resources should be referred to by technicians

In the end, it only adds a relatively small amount

and counterpeople with access to service databases

to the bill, and delivers much in customer satisfaction.

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SHOP TECH

Air and Errors Cooling System Diagnosis:

By Andrew Ross

A

ir is everywhere, but it sure as heck better not be in a cooling system.

Okay, sure, we know it’s a bad deal there, but in the old days it was because we knew that it would affect the cooling; what we didn’t think about was how it could make things really go wrong.

In a Dex-Cool or other Organic Acid Technology (OAT) system, getting air into the system is the main cause of what, for a long time, was seen as a failure of the new coolant technology.

“It took a while for us to understand what was going on,” admitted Mark Ingram, ACDelco trainer, in his

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Advanced Cooling System Diagnosis session at the Mobile Air Conditioning Society Worldwide’s convention earlier this year.

From the nodding heads in the room, it was clear that almost every shop owner had at least heard of the issues and tried to figure out the cause.

“The best thing we can do is emphasize to everyone: check the cap, do a pressure check, and if there is any sign of corrosion or gelling, either clean it thoroughly or replace it. The big problem that caused the corrosion was air in the system. As long as the coolant is in contact with the metal parts, there is no problem; but as soon as there is air in the system, the corrosion protection goes away.”

JOBBER NEWS / JULY 2011

05/07/11 8:48 AM

SHOP TECH

The sludge that was often attributed to a breakdown of shop, it is a reminder of how much they are having to deal the coolant was really iron corrosion – rust – that ended up with on a daily basis. in the coolant and on parts like radiator caps, having been “Little floating balls don’t work accurately, as different washed off the interior of the cooling system. coolants have different specific gravities. A refractometer is a At issue is the way that the OAT coolants work. And once very neat tool, but most shops don’t have them and the only you understand this, the rest sounds logical. reason is that they don’t know.”

Old-style coolants, with their use of silicates, coated the It was about this time that talk turned to matters related interior of the cooling passages, protecting them but also to service snafus. sealing them from the rigours of air in the system.

Continued on page 30 The OAT chemistry doesn’t work that way, instead providing protection through constant contact with the interior surfaces.

Lose this contact in the system, and you will get rust. And there’s more too.

“And when you replace a water pump, it is unprotected, and if there is any air or cavitation, you are going to get corrosion on your new pump.”

His advice, despite the 150,000-mile service interval, is to check coolants as often as you ever would, and if they are degrading, flush and fill the system.

A growing concern over the past number of years has been electrolytic degradation, which affects rubber components as well as the metal. The presence of it speaks to both coolant degradation and the quality of the water used.

“Pure water is almost a complete insulator; it is only when you have stuff in the water – acid or salts – that it becomes conductive. In most cases, it is because the chemicals that are in the antifreeze to protect the system have become depleted.”

He reminded shops that it is important to check for this the correct way, with a DVOM, the engine running, and the accessories turned on.

While zero volts is ideal, techs should be looking for readings below 0.3 volts to be acceptable. (Ingram says he has seen readings up to 0.6 volts.)

“If it jumps up when you turn on an accessory, it is from an electrical connection or a bad ground. But if you turn on the accessories and the voltage does not change, disconnect the battery and go from the negative cable and see if you still have a voltage. This indicates that any voltage you show is being created by a chemical reaction.

“If you are showing a voltage with the battery disconnected, you are definitely Behr and Hella have defined the solution for Thermal Management. The definition? Engine looking at a chemical reaction, so you cooling and air conditioning products combined need to flush the heck out of the system through one source – Behr Hella Service. For the Air to get the voltage down. If the voltage is Conditioning Specialist we’ve extended our range running high, it will generally take multiple of A/C parts for Trucks as well as European and flushes to get the voltage down.”

Asian cars. Along with our OE Quality and perfect fit The irony of having to remind some Hella, Inc. Compressors, Radiators and other Engine Cooling of the best HVAC techs on the continent 1.877.224.3552 parts, you’ve got the definition of success! to do regular checks for coolant quality www.hellausa.com is not lost on this writer, but when you see that only five hands go up to confirm the presence of a refractometer in their

Air Conditioning & Engine Cooling...Redefined!

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05/07/11 8:49 AM

SHOP TECH

Continued from page 29

A comedic aside by Ingram about the protective covers on plastic impellers generated some smiles: techs were actually installing water pumps with the cover still on, or at least trying to. There were so many returns and calls that ACDelco actually generated a bulletin. “So you know it was happening a bunch!” he said.

This is, in fact, true. The water pump in question is the 252813, which fits more than 40 Dodge and Jeep applications from 1999 to 2005 using the 3.7L and 4.7L engines. The advisory is covered by Bulletin 10D-149.

A/C Repairs Gone Wrong

D

uring this freewheeling session of forehead slappers, one shop

owner leaned over to me to say that he replaces 20 compressors a year installed by other shops, because the techs neglected to add lubricant to the compressor, despite warning tags that the compressors required it.

That same shop owner also offered one case concerning a school bus repair. The a/c wasn’t working after a new compressor had been installed by another shop, and they couldn’t figure out why. It turns out the plugs that block the ports for shipping had been left in.

No professional can help but chuckle at these and their own examples, but they tend not to be so funny for the customer.

ATE and VDO - Trademarks of the Continental Corporation

And they serve as a good reminder that parts should be inspected thor-

Continental delivers cutting edge solutions to leading auto manufacturers around the globe – and every ATE and VDO aftermarket product we provide is made to the same quality standards as the products we supply to carmakers.

oughly to ensure they are the correct part, not just the right box, and to inspect the parts and packaging for instructions, protective caps, capped

For additional information, contact: salessupport-us@continental-corporation.com

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ports, etc.

Again, it sounds silly to have to remind any professional to do this, until it happens, or doesn’t happen. In this case, it’s probably better to feel silly than sorry.

6/15/11 9:47 AM

JOBBER NEWS / JULY 2011

05/07/11 8:50 AM

NEW PRODUCTS Compact Code Reader The Actron PocketScan Plus OBD-II and CAN Code Reader automatically reads more than 4,000 diagnostic trouble codes when a vehicle’s check-engine light is illuminated. Compatible with all 1996 and newer vehicles, PocketScan Plus also provides Freeze Frame data (a snapshot of vehicle data at the time of the fault), VIN information, Malfunction Indicator Light (MIL) status, pending codes, and Inspection Maintenance (I/M) readiness testing, to ensure the vehicle’s system has evaluated the emissions systems of the vehicle for proper operation.

Actron www.actron.com Genuine OE Fluids for Asian Imports

Beck/Arnley has developed a comprehensive line of high quality OE fluids that are specifically designed for Asian vehicles, including Hyundai, Kia, Mazda, Toyota, Lexus, Scion, Subaru, Nissan, Infiniti, Acura and Honda, formulated using the same technology that OEMs use. Beck/Arnley’s advanced line of OE fluids includes Premium OE Automatic Transmission Fluid, Premium OE Fully Synthetic Motor Oil, Premium OE Power Steering Fluid for Honda/ Acura Applications, and Premium OE Antifreeze/Coolant, all designed to meet or exceed OE standards.

Beck/Arnley www.beckarnley.com Infrared Thermometer with Laser Sight

General Technologies Corp.’s new LTX10 laser infrared thermometer is useful in all kinds of applications such as automotive, industrial, JOBBER NEWS / JULY 2011

JULY Product p31,32.indd 31

marine, agricultural, aviation, HVAC, farming, and general temperature measurement applications. The unit offers a temperature measurement range of -20 degrees F to 1000 degrees F, a 10:1 optical ratio, and comes loaded with a laser pointer, IR sensor, large LCD, selectable scales (˚C/˚F), backlight, laser On/ Off feature, and high-quality soft carrying/storage pouch.

General Technologies Corp. www.gtc.ca Non-Contact Throttle Position Sensors Airtex Engine Management’s new line of advanced non-contact-design throttle position sensors eliminate the premature wear and common drivability issues experienced with conventional sensor technology.

Conventional OE and replacement throttle position sensors feature metal contact “fingers” that sweep across a printed resistor board. Repetitive motion and vehicle vibration can cause these fingers to wear holes in the board, causing engine hesitation and other potential drivability issues.

The new sensors utilize advanced integrated circuitry that eliminates wear-intensive contact with the circuit board.

Airtex Engine Management www.airtexenginemanagement.com

Three New Catalogues Papco has released its new catalogues for Wheel Parts (WP509), Expansion Plugs (EP410) and Drain Plugs (DP1090), offering a full line of products for all current applications for European, Asian, and domestic vehicles.

The new catalogues also feature new assortments and kits as well as a detailed actual size digital photo index to allow for quick part identification. Electronic catalogues are available for download at www.hpaulin.com.

H. Paulin & Co. www.hpaulin.com

Continued on page 32

31

04/07/11 2:24 PM

NEW PRODUCTS Technical Fluids Guide

CRP Automotive has introduced the 2011 Pentosin Technical Fluids Guide, featuring a quick reference and overview of Pentosin’s wide range of fluids. The guide provides domestic and import vehicle-specific application specifications and service recommendations for antifreeze, brake fluid, central hydraulic fluids, engine oils, and transmission fluids. The Pentosin Technical Fluids program features easy look-up on CRP’s online application catalogue.

CRP Automotive www.crpautomotive.com Versatile Welding Package ESAB Welding & Cutting Products introduces the MultiMaster 300, an industrial ready-toweld, multi-process package for MIG, DC TIG, and stick electrode welding. ESAB’s proprietary Super Switch technology features a high-speed solid-state power control that produces superior arc performance and also makes welding exceptionally easy. The package includes power source, built-in four-roll wire feeder, factoryinstalled undercarriage and cylinder rack, torch, contact tips, regulator/flowmeter, electrode holder and plug, and all necessary hoses and cables.

ESAB Welding & Cutting Products www.esabna.com

In-Tank Fuel Pump Sets and Modules

Federal-Mogul introduces three new Carter in-tank units for late-model Honda and Toyota.

Each Carter product delivers factory-specified fuel pressure and flow and matches OEM dimensions, electrical connections, and inlet/outlet locations, along with a number of enhancements not found in the original parts, including premium turbine pumps, solid silver fuel sender contacts, digital pressure sensor transducers, and the exclusive Carter CleanScreen fuel strainer, for maximum filtration with reduced clogging.

Federal-Mogul Corporation www.carterfueldelivery.com Adjustable Socket Grips Worn Bolts

Kobra Tools’ SocketPro continuously adjusts to all sizes within 3/8” to 3/4” SAE and 10 to 19mm metric range. It tightly grips roundedoff, rusty or worn fasteners that defeat regular sockets. It also allows for single-handed use, as it holds the fastener in place for installation.

The socket prevents rounding of corners due to forces exerted to the centre portion of fastener sides, and can handle up to 100 ft-lbs of torque.

Kobra Tools www.socketpro.com 32

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JOBBER NEWS / JULY 2011

04/07/11 2:26 PM

BE CAR CARE AWARE p33.indd 33

04/07/11 1:14 PM

For the Counterperson

July 2011

Knowledge Building:

Smart Sales and Marketing

By Laurie Izgerean, Curriculum Developer, Durham College

T

he keys to success are captured when an organization looks towards continuous improvement in soft skill areas such as sales, sales management, marketing, and communication.

Additionally, a primary key to success in today’s competitive global economy lies within the ability to hire, train, and retain some of the industry’s best talent.

It is that talent that can provide an exceptional customer experience for each of your retail and wholesale customers.

Let’s discuss sales first.

Regardless of the specific position – inside parts counterperson or outside sales rep – the ability to sell anything well comes from more than following a few simple steps. One of the first things you have to realize is that each salesperson is the most important product your business has to sell.

The impression he leaves upon a customer, whether in person or over the phone, can either make or break the first and subsequent orders.

Be sure you have the right people in the right positions.

Far too often, there are people in sales positions that shouldn’t be. Successful salespeople should be capable in the following responsibilities of their position: • They understand their customers.

• They understand the sales process.

• They know how to develop new business and keep it.

• They demonstrate a high level of product knowledge in all that they do.

The ability to build long-term customer relationships through your salespeople will also help an organization enjoy success. Jerry Roche, author of the online article entitled “More Than Sales,” states: “It’s less about your product and a whole lot more about how your representatives connect with your clients.

They need to be a trusted consultant, to understand the client’s needs, and to get to the core of what is going on in the client’s [world].”

Every sales department, regardless of industry, wants top performers; but top performers want to work for organizations that are going to take care of them for the long term.

That means that in addition to great salespeople, your

organization also depends on an effective sales manager that knows how to motivate his or her team towards success. A 25-year-long Gallup Organization study, based on interviews with 12 million workers at 7,000 companies, found that the relationship with a manager largely determined the length of an employee’s stay. Without great leadership, your talent pool won’t find much reason to stay.

The key to success in marketing is to truly understand what it is your customer will gain by doing business with you beyond product, price, or service—and then set out to communicate and provide it better than anyone else.

Identifying your market and then following through with a targeted marketing approach is only half the battle if you want your ad dollars to have an impact. The other part of the equation is making sure you communicate your message clearly.

Here are three of the golden rules of marketing to help you zero in on a meaningful message: You are in the business of providing solutions.

You are in the business of making meaningful connections.

You are helping your customer improve his business.

Marketing, advertising, and promotional budgets are successful when the right message meets the right people through the right type of communication. Try not to be all things to all people, and try not to spread your budget so thin as to have a minimal presence in a variety of media. Do the research, gather the intelligence, and then represent yourself strongly in the most likely places your customers will be looking.

The ability to communicate both inside and outside your organization will be an essential key to success as the global marketplace moves forward. The heart of any organization is its business culture. Your organization’s culture is a set of behaviours that are communicated by every one of your employees to every one of your customers every day, and it has three separate components: Continued on page 36

34

JULY COUNTER p34,36.indd 34

04/07/11 2:28 PM

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04/07/11 10:34 AM

Continued from page 34

1. How management motivates and empowers its employees; 2. How employees treat each other; 3. How everyone in the organization treats the customer.

In today’s retail and wholesale marketplace, most of you have adapted to the mandate of selling customer service or the total customer experience as your product differentiator, as opposed to product or price. Yes, you may sell parts…but you sell parts with a value-added service. With that said, your parts drivers are an integral conduit of communication to every customer they see. Your business culture will flow through them, so be sure they are trained, informed during the occasional sales meeting, and that they understand the important role they play in your organization.

Never underestimate the importance of professional telephone communication as well. How your people treat customers over the phone, including the way they transfer calls, take messages, and the clarity of a voice-mail message, will determine the quality of impressions made on your customers.

There are numerous HR studies that will confirm success when an organization has happy, highly trained, and empowered employees. Because the global economy has made any product available anywhere, anytime, the differentiator from one organization to another seems to be the customer experience.

The providers of that customer experience, whether good or bad, are your employees.

When you have happy, empowered employees, your organization will enjoy higher employee retention, thereby reducing turnover, recruiting, and hiring costs. You will gain increased productivity, customer satisfaction and loyalty, and improved teamwork.

When you have a highly trained workforce, the benefits will include increased innovation that breeds a competitive advantage; you’ll have people who are creative at problem solving and will enjoy a higher quality of work and service.

The bonus? You’ll attract and retain highly talented people.

Author Ruth Mayhew captures the importance of an organization’s employees as a crucial key to success: “While a company’s philosophy, mission, and values are fundamental to success, human capital is an organization’s most valuable asset. Your organization’s human capital – its employees – must be fully engaged and satisfied to keep your business running.”

For more information on parts sales training, visit CARS OnDemand training at: www.carsondemand.com or contact CARS at 1-888-224-3834.

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JULY COUNTER p34,36.indd 36

04/07/11 2:29 PM

Automotive Internet Directory

Visit these companies directly at their web addresses or check out the growing list of Hot Links at www.autoserviceworld.com. To find out how your organization can be included in this directory and on the web, contact aross@jobbernews.com

AUTOMOTIVE PARTS & ACCESSORIES Goodyear Engineered Products www.goodyearep.com/aftermarket www.goodyearbeltsandhose.com The officially licensed belt of NASCAR. Gatorback, the quiet belt. You can never replace Goodyear quality.

NGK Spark Plugs Canada Limited www.ngksparkplugs.ca The World Leader in Spark Plugs, Oxygen Sensors and Ignition Wire Sets.

Used by 87% of the World’s OE Manufacturers S.B International Inc. www.sbintl.com “We keep engines humming”

AUTOMOTIVE RECYCLERS Carcone’s Auto Recycling and Wheel Refinishing www.carcone.com With over 32 years of experience Carcone’s Auto Recycling & Wheel Refinishing is your one stop for quality recycled products and wheel refinishing needs. Call today at 1-800-263-2022 or visit us on line at www.carcone.com

AUTOMOTIVE RECYCLERS Standard Auto Wreckers View Our Online Inventory @ www. standardautowreckers. com or call 416-286-8686.

Experienced Shipping Department to Ensure Parts Arrive Safely.

HAND CLEANERS GOJO Industries, Inc. www.automotive.gojo.com GOJO is a leading manufacturer of skin care products and services for many marketing including automotive and manufacturing. GOJO continues to pursue a commitment of creating well-being through hand hygiene and healthy skin.

JULY INTERNET p37.indd 37

Kerr Machine Shop Group Inc.

Duracool Refrigerants

www.duracool.com Nationally Distributed by: Deepfreeze Refrigerants Inc. The Leaders in Hydrocarbon Refrigerant Technology. Guaranteed In writing not to harm any Mobile A/C System. You can feel the Difference that Quality Makes. “Our Formula Never Changes”.

www.kerrmachineshopgroup.com Buying group for machine shops and performance shops.

TOOLS & EQUIPMENT AIR LIQUIDE CANADA INC. www.airliquide.ca Your one-stop shop for all your industrial gases and welding supplies.

WAREHOUSE DISTRIBUTORS & BUYING GROUPS Bestbuy Distributors Limited

Marketplace www.bestbuyautoparts.ca Independent buying group and warehouse distributor that allocates its profits to member shareholders and provides unbeatable value for independent jobbers.

Page #

AAPEX 2011 (Automotive Aftermarket Products Expo, www.aapexshow.com) . . . . . . . . . . . . . . . . . . 11 ACDelco Canada (www.acdelcocanada.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Affinia Group (www.raybestosbrakes.com, www.raybestoschassis.com) . . . . . . . . . . . . . . . . . . . . . . 15 Agna Brakes (www.agnabrakes.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OBC AIA Canada Atlantic Forum (www.aiacanada.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Automotive Service & Repair Week-NACE, CARS (www.naceexpo.com, www.carsevent.com) . . . . . 17 Be Car Care Aware (www.carecarecanada.ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Continental Corporation (www.conti-online.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Delphi Product & Service Solutions (www.delphi.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFC Epicor Software Corporation, formerly Activant (www.activant.com) . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Federal-Mogul Corp. (www.federalmogul.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Hella Inc. -- USA (www.hellausa.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Mevotech Inc.(www.mevotech.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 NGK Spark Plugs Canada Ltd (www.ngksparkplugs.ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Mann + Hummel USA (www.mann-hummel.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Nova East Warehouse Distribution Inc., (www.novaeast.ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 OE Quality Friction (www.oeqf.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Promax Auto Parts Depot (www.autopartsdepot.ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Spectra Premium Industries (www.spectrapremium.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Transit Warehouse Distributor (www.transitwarehouse.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Uni-Select Inc. (www.uniselect.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Valvoline Canada Limited (www.valvoline.com) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IBC Valvoline Motor Oil Mythbusters Quiz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Veyance Technologies (Goodyear Engineered Products, www.goodyearep.com) . . . . . . . . . . . . . . . . 16 JOBBER NEWS / JULY 2011

The E.R.I. Group www.theerigroup.com Canada’s Premier Machine Shop Buying Group

REFRIGERANT

ADVERTISERS INDEX Company

WAREHOUSE DISTRIBUTORS & BUYING GROUPS

FOR SALE/A VENDRE PIECES D’AUTO UNIVERSELLES INC. Auto parts business Pieces D’Auto Universelles and the building it operates in, located at 608 Renault Blvd., Beauceville, QC G1X 1M9, are for sale.

After 50 years in the jobber store business, owner Yves Roy is looking to retire.

Interested parties are asked to contact Lucie Dion directly, at Pièces d’Auto Universelles Inc., by calling (418) 774-3345 or Perry Wong (418) 655-0913, our certified real estate broker from Century 21 Premier Choix, 3188, Chemin Ste-Foy, Québec, G1X 1R4.

Les Pièces d’Auto Universelles Inc., ainsi que la bâtisse commerciale du 608 boulevard Renault, Beauceville, Québec, G5X 1M9, dans laquelle le commerce de pièces et de peinture d’automobile opère ses activités, sont à vendre.

Le propriétaire Yves Roy, en affaires depuis plus de 50 ans, désire prendre sa retraite.

Si vous êtes intéressé, vous pouvez contacter directement Lucie Dion au magasin des Pièces d’Auto Universelles au (418) 774-3345 ou Perry Wong au (418) 655-0913, courtier immobilier agréé, agence immobilière Century 21 Premier Choix, 3188, Chemin Ste-Foy, Québec, G1X 1R4. www.century21.ca/100652180 (MLS : Qc8457627) www.century21.ca/100654780 (MLS : Qc8464936)

37

06/07/11 9:15 AM

Editorial Comment

THE PRICE IS RIGHT

I From Our Pages E.J. Wadham, Founding Editor, Jobber News Volume 30, Issue #2, February 1962 “In late January the Toronto papers reported a fine of $1,800 being levied against a local camera dealer for misrepresenting prices on his advertising. This was the first case tried under the new clause inserted into the anti-combines legislation in 1960.

The offence was in advertising . . . “Sale Price $xxx--Regular Price $xxx . . .” It was shown that what this dealer had advertised as “regular price” was actually the manufacturer’s suggested “list” and that no camera had actually been sold at this price.

“This will probably be upsetting to those discounters who depend on making the bargain look as big as possible to draw in customers.

While we personally and instinctively are opposed to government interference in business we must admit that this particular case may discourage some efforts to make prices look like sensational bargains when they are not.”

Jobber News 80 Years of Serving the Aftermarket 1931-2011

38

JULY EDITORIAL p38.indd 38

know that I can fill this space with ideas that veer sharply into the hard clay of profundity from time to time.

And while many of you tell me that the sometimes deep concepts that I end up blabbering on about in this column are worthy of reflection, I fear that many more of you are caught up in simply getting your customers what they need and staying a step ahead of the other guy. As a result, you might not always have the luxury of pondering the long-range impact of demographic shifts, technology, changing employer/employee relationships, and world economics.

This time I’m here to talk about something you deal with every day: pricing.

I have seen many a survey telling us that pricing is not top of mind for the customer. And, like you as well, I am sure, I wonder just which customers they are talking about. Ask any counterperson about pricing, and he will tell you about how many times a day he deals with pricing calls and objections. And you can add into this all the online price-checking that goes on by your customers. (Do you get alerts when they do that? You should.)

Which brings me to my point. Alongside this online revolution has come the technology to manage the information presented there, in increasingly sophisticated ways.

In fact, the practice of online price-checking has become so common, some jobbers and two-step distributors have gotten, well, creative.

What is happening in some cases is that certain players in the market have programmed their systems to revise pricing when the quantity in inventory drops to zero. I have heard this from enough different people to believe it to be true. And this is troubling, because it is downright dishonest. It reminds me of that old tale of the butcher being told by a customer that his eggs are more expensive than the butcher across the street, but he doesn’t have any. “Well, when I don’t have any, mine are way cheaper than his,” is the response. It’s funny as a story, but not so much when it’s taken as the foundation for a strategy.

To me it smacks of someone who’s trying to be a bit too smart for his own good, and is in the very least underhanded.

A pricing strategy I prefer is the case where a random part, or set of parts, drop in price for a time based on a pre-programmed set of criteria. I like this because, depending on the criteria, it can help a jobber unload a slow-moving set of numbers, build his competitive image in the eyes of his customer, and, yes, catch his competitors a bit off-guard. The distinguishing feature here is that if someone calls about that product, he can actually buy it at that price.

Bell Canada recently learned this lesson (or should have, anyway) after it was fined $10 million for advertising a “bundled” price for its services that was impossible for the consumer to actually achieve, once you added in all the “mandatory” charges.

Still, the best pricing strategy is, I think, one based on the activity level and competitive environment of the individual parts you sell. New parts that you offer first in your market should command a higher margin than other, more competitive numbers. Conversely, those parts in their sunset years might command less until they become rare, and maybe desirable, all over again.

It’s pretty exciting that the technology available today allows you to slice your product categories – and therefore your pricing models – so finely, provided you are prepared to put the time in to get it right.

If you don’t have that capability at your disposal, you should at least be honest about your pricing. If you list a price, be prepared to honour it. That doesn’t sound too radical to me. It shouldn’t to you.

Andrew Ross, Publisher and Editor aross@jobbernews.com JOBBER NEWS / JULY 2011

04/07/11 11:19 AM

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