ONE MORE TIME - IS IT TIME FOR A NEW VOLUNTARY AFTERMARKET SYSTEM IN CANADA?

The traditional methods of operating a business within the Independent sector of the automotive aftermarket industry in Canada has been very simple. A person or licensed technician has the opportunity of having his/her own shop, raises the required cash and opens up for business. A person or Jobber sales representative has the opportunity to own a parts store, raises the required cash, and the doors are open for business. This is the capitalist system working at its best as one decides to take the personal risk to build a better future.

I submit that it is time to raise the question: "Is this the right method of conducting business that helps ensure the growth and success of the Independent sector of the automotive aftermarket industry in Canada?"

Consider the following variety of facts within the Canadian aftermarket industry:

1. The majority of Independent shop owners in Canada never obtained a formal business education before moving on to "pay his/her dues" to obtain his/her Automotive Service Technician license.

2. The average Jobber store owner is trying to figure out their own business and determine how to move forward when shop owners seemingly only want to squeeze parts margin out of the Jobber but Jobber business costs continue to rise.

3. The North American name plate vehicle count is dropping as Foreign name plates surge from coast to coast.

4. In the perception of Independent shop owners, aftermarket parts manufacturers have not produced appropriate quality foreign name plate parts that perform fit/form and function.

5. Dealerships are retaining their customer base away from the aftermarket segment and aftermarket shops end up supporting dealerships with aftermarket dollars by purchasing parts from them to obtain OE quality.

6. Pricing strategies of the aftermarket parts manufacturers are against other aftermarket parts manufacturers and not against dealer OE parts themselves which creates huge pricing fluctuations between OE dealer and aftermarket parts. This issue kills shop/jobber relationships and sends a tremendous amount of aftermarket money into the OE arena.

7. Independent Jobbers do not really understand the Service Providers service business and how to grow it. Independent Service Providers do not really understand the Jobbers commodity business and how to grow it yet both need each other more than ever before for their own survival.

8. The term "Profit" throughout every level of the aftermarket segment is treated as a "dirty" word as everyone is in a race to the bottom in their pricing strategies. "How low can I go and how fast can I get there?"

9. The industry thinks in terms of "Cost" and not "Profit". It is an embedded state of mind of this and past generations!

10. Warehouse Distributors and Manufacturers continue to spend millions of dollars each year on "toys/trinkets and trash" trying to lure shops to purchase their parts.

11. Manufacturers, WD's, and Jobbers are seemingly consumed with parts volume at any price in order to meet monthly and quarterly sales quotas.

12. The industries focus and support processes are focused on the "bottom-feeder/cockroach type" shops and not the "best business practices" shops; i.e. - Jobbers carry too many shop receivables that are 60/90/120 days old because these shops do not know how to run a business profitably in order to pay all bills on time when due. The Jobber, therefore, does not have the cash necessary to grow his/her store and cannot bring value to their best practices shops. WD's focus on "programs" to "buy volume" from the average Jobber and marketplace shop, which is traditionally, the weakest shops in the industry. The WD's then go back and beat up the manufacturer on price to support these "programs". Manufacturers don't listen to the best business practice shops as to their needs and future requirements and, like the WD's, have focused on toys/trinkets and trash to try to capture their business rather than fit/form and function at the right price. These, flavor of the day concepts, do not produce long term profitable results, yet no executive will ever challenge this method of doing "short-term" business in our industry, as most are near their retirement age and do not want to upset their "comfort zone".

13. The Independent shop as part of the industry lacks proper recognition from the consumer, as the Independent is "diverse" because the best of the Independents are also associated with the worst of the Independents.

14. Vehicle quality and service intervals have changed, therefore, shop processes must change. No one in the commodity business is talking about this. More bays with more equipment with a larger, relationship/education focused, client base is now becoming the necessary standard requirement "today" to secure and sustain "tomorrows" business and consumer needs. "Learn to grow the business or go home."

15. Television commercials are encouraging the layperson consumer to read the instructions on the box and change their own brake pads on their vehicle. This is a safety issue.

16. There is a tremendous need for a change in "Corporate Culture" at every level of the aftermarket industry.

17. There is a tremendous need for a change in "Communication Practices" at every level of the aftermarket industry.

Currently, in essence, the aftermarket operates with "no real accountability for their actions".

One might respond to the above statement with "this is the free enterprise system and if they are wrong they will lose money or go broke, leave it alone."

Well then, considering that response, now consider these facts:

1. We have now become and will continue to be a "knowledge based" industry as vehicle technology continues to develop.

2. Technology development means the requirement for highly skilled technicians for proper vehicle diagnosis and to secure the right safety related "prognosis". It is truly a safety issue.

3. Capital costs as well as on-going business and technical training time required for this industry are very high so it is very important to implement and obtain the right price from the consumer to support the structure required.

4. Technology development means more parts proliferation for Jobbers.

5. The consumer is more educated today, but very uninformed as to the proper vehicle maintenance processes required to maximize their vehicle's life. The Dealerships are using unethical "tactics" on the consumer to retain the aftermarket client with them.

6. Independent Shop owners and Jobbers must earn each others trust and learn to work closer together for each respective business to succeed.

7. Business "communication" must be greatly improved between each and at every level of our industry.

8. To be "Professional" in today's economy means meeting, and sustaining an "Industry Standard".


If the aftermarket sector of the industry acknowledges the above-mentioned facts and wants to achieve the right level of prosperity, then perhaps it is time for a dramatic change in focus. A change in focus that will allow the next generation to have a better chance to enjoy the elusive words, "professional prosperity".

Consider, if you will, the "system" used by Accountants, Engineers, Lawyers and even Liquor Control Boards.

These organizations "sanction" people and companies who voluntarily want to deal in that profession at that professional level. It is the law. The organizations are recognised by the Federal and Provincial Governments.

To become a Chartered Accountant he/she must obtain a certain education level, then pay his/her annual dues to their "Society" by which they are "sanctioned" to operate with outlined standards.

The same applies to Engineers and Lawyers.

To sell liquor, the Provincial LCB's across Canada "License" the premise to sell alcohol under certain conditions and "standards".

I submit it is time for the Independent sector of the automotive aftermarket to form its own "Society" that "sanctions" Independent shops and Independent Jobbers who voluntarily agree to operate their business to a higher standard. It is an issue of protecting consumer safety and obtaining/sustaining best business practices. This society must be approved and recognized by the Federal and Provincial Governments (so it has teeth). The owner who wishes to join this society must meet pre-set, established criteria. Business conduct and standard rules are set. Sustainable, on going, communication processes are put in place. Annual dues must be paid to the "Society". Accountability is now in place and it is "policed" internally as are the other "Professional Societies". When this is achieved, the focus will be on best business practices throughout the industry rather than accepting the current status quo focus of weak, unprofessional practices. WD's and manufacturers would adjust their businesses to meet the requirements of their customer, namely, the new shop owner and the new Jobber. Communication lines are clear. The aftermarket would have an incredible future. This "system" becomes the "industry standard" not just a "shop standard". The mind-set is elevated and conduct is changed. The consumer sees the difference from a sanctioned business to a non-sanctioned business as is recognised from a Chartered Accountant to a Bookkeeper. Aftermarket profitability changes for the better.

If your comment is "impossible", or sounds like a "pipe-dream", I submit that it is perhaps you who is not willing change to be accountable to his or her peers to improve the standards and image of our sector of the industry. You use the phrase "I am only accountable to my customers, my clients". I submit to you, that attitude is correct for running one business, but not running an entire industry of this complexity and magnitude.

The challenge would be great however the end result would make the task worthwhile. All issues must be brought to the table from each level of the industry and fully discussed by appointed representatives. All levels clearly agree to work together to form the structure.

Consider most of the infrastructure to such a mission is already in place through our National and Provincial Associations. Fine-tuning would have to take place, but a lot could be accomplished in five years when the "will" is there to make things happen.

Where are all the Association Executives and their Board members across the country who have the desire, focus and dedication required to move our aftermarket sector to a much higher and more accountable level which in turn would build the foundation structure for the next generation?

A new structure for a true Profession requires a new attitude approach and new thinking from an aftermarket industry entrenched in "tradition" created from a break down and repair world; a world that we must finally admit is now over in the current and next generation of vehicles.