Truck Parts & Service 0316 by Richard Street

Tidewater Fleet Supply Acquires TNT Parts | OEMs announce top dealers

Perfecting your price point THE IMPACT OF PRICE MONITORING ON LONGTERM INDEPENDENT AFTERMARKET SUCCESS

MARCH 2016 |

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Coop marketing: The professional partnership 20

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Volume 52 | Number 3 | March 2016

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Editorial | Lucas Deal

Selling safety By Lucas Deal, Editor lucasdeal@randallreilly.com

’m always grateful when I get my hands on fresh data about the fleet and owner-operator marketplace. Obviously a majority of my time, like yours, is dedicated to addressing the news and issues facing businesses in the independent aftermarket. I spend a great deal of time learning about this industry, uncovering its strengths and weaknesses; its best growth opportunities and its short- and long-term challenges. I want to know this industry inside and out, so I can provide the best information possible to those of you who populate it. But too much time focused solely on one area can have its flaws. Tunnel vision can cause you to miss tertiary information — some of which can be very valuable. Which leads me to the annual Commercial Carrier Journal 2016 Reader Profile survey. CCJ, sister publication of Truck Parts & Service, conducts a Reader Profile survey that asks a sampling of its expansive readership of fleet representatives about the state of their businesses, and their goals for the coming year. It provides good insight into that market, and sometimes I uncover a nugget or two of information I can share with you. This year that nugget is safety. Nearly half of fleet responders (46.5 percent) to CCJ’s 2016 Reader Profile survey answered that they plan to make “significant information technology investments this year” in safety and risk management. That number was nearly

ten percentage points above all the other responses to the question. So, how can you sell safety? How can you provide products, services and technology to appeal to this large crosssection of your customer base?

What do you need to stock today, and what can you afford to wait on? “Information technology” is an ambiguous term. One I’m sure each fleet responder viewed differently when answering that question. Maybe some of the responders are planning to purchase additional telematics systems when they place their next new truck order. Others may be planning to purchase more vehicle monitoring capabilities through the systems they already have. And of course there’s also a chance some responders plan to add new safety technology to their existing assets. The National Highway Transportation Safety Administration (NHTSA) mandated Reduced Stopping Distance (RSD) on new vehicles in 2012 and is gearing up to make Electronic Stability Control (ESC) a requirement in 2017. Combine that with the lane departure warning, collision

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mitigation and truck platooning systems also entering the market, it’s clear that safety is priority No. 1 to your customers. Make it a point of emphasis with your vendors. Make sure they’re keeping you informed about the new safety products they’re debuting in the OE channel. Make sure you know how long the technology has been available and when it is due to arrive (or did arrive) in the aftermarket. Then cross reference that equipment with your customer base. What do you need to stock today, and what can you afford to wait on? The ESC mandate will apply to trucks built after Aug. 1, 2017. Some OEMs and fleets have proactively adopted the ESC technology ahead of the deadline, but it’s unlikely ESC needs to be a priority for you today. The RSD mandate, however, is nearly four years old. If you consider yourself a premium distributor, there’s no reason you shouldn’t be stocking RSD lines. Fleet customers who replace like-for-like will be coming to you for RSD parts any day now. Don’t let them down. The safety push isn’t going away. The Federal Motor Carrier Safety Administration is revamping but not discarding its Compliance Safety Accountability program, and the ease with which NHTSA implemented the RSD and ESC mandates leads me to believe more are sure to come. Selling safety in trucking is booming. Go get your share of the pie.

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Editorial | Jason Cannon

Technician recruitment has an image problem By Jason Cannon, Equipment Editor jasoncannon@randallreilly.com

epending on which source you use, the trucking industry needs between fifty-something thousand and one hundredsomething thousand more trained technicians by 2020 to meet anticipated demands. Exact numbers aren’t all that important. It’s like trying to figure out the minimum requirement of oxygen you need to get through a day. It doesn’t really matter until you don’t have enough. And there aren’t enough. Finding the right fit for your service department is a recipe of hiring, training and retaining good people. A tried and true method for filling vacancies for years has been to steal them from a competitor with fatter paychecks — a solution that becomes its own self-fulfilling prophecy. These for-hire mercenaries are tougher to integrate into the ways of your shop, and they are perpetually on the lookout for the next big spender. If the average age of your technician force is hovering in the 50s, and you rarely celebrate anyone’s fifth anniversary, there are problems for you on the horizon that can’t be solved with free spending. What are you doing to invest in the education of the technicians you need? A $5,000 sign on bonus is great, but there’s a lot more at your disposal than that. Invest that $5,000 in a recent graduate’s tooling and into training and career development programs. You’ll hang on to

that person a lot longer than the period that triggers the sign-on bonus payout. Do you have a table at your local schools’ career days? Are you an easy phone call for all the diesel instructors within a 100-mile radius?

Finding the right fit for your service department is a recipe of hiring, training and retaining good people. Fostering these kinds of relationships can do a lot to wreck the age curve of your technician force. The responsibility for educating today’s workforce about the industry doesn’t lie solely in the classroom. If you asked 50 17- to 20-year-old people within 30 miles of your office what they think of when they hear the name of your business, I would bet 47 of them say, “parts.” Sure, that’s a major component of your business, but it probably never dawns on most of them that you have entire staffs of people who do other things. As technology continues to infiltrate the service shop, I think a technician job is as attractive now as it has ever been. The problem is, Generation Z doesn’t know that. “It all comes down to the perception

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of diesel technicians in the minds of young people considering career options,” Landair President and CEO John Tweed wrote in a recent white paper. “The image of a diesel technician that ‘gets dirty’ often times does not appeal to the younger generation who might have entered the field in the past. Becoming a diesel technician does not have the social status that it did 50 to 60 years ago.” The sexiness of the business card is an obstacle that will have to be overcome, and clearly explaining how sophisticated the industry has become since the release of High Ballin’ gets that conversation started. Say what you want about this participation ribbon generation, but they are technologically savvy. They may not be the most mechanically inclined population you’ve ever come across, but they can find, download and decipher a schematic or instructional how-to by the gigabyte. It’s all they’ve ever known. Today’s high school seniors have never lived in a world where the answers to the universe’s greatest questions couldn’t be found on Google. That’s a skillset often confused with laziness. Finding and managing this new generation workforce can be a challenge, but if you want to set up your shop for longterm success, you have to find prospective techs on hunting grounds where the techs currently approaching retirement age wouldn’t tread.

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Industry Focus

Dealer News Reno’s Trailer Sales has been named an authorized East Manufacturing dealer. Stoops Freightliner-Quality Trailer added its eighth site with the opening of its Edinburgh, Ind., location. Mack Trucks has anointed its first Mack Certified Uptime Centers. Vision Truck Center of Mississauga, Ontario, Canada; Vanguard Truck Center of Phoenix, Az.; Nextran Truck Center of Birmingham, Ala.; and Westfall O’Dell Truck Sales of Kansas City, Mo. are the first four dealers to achieve the certification and all four were part of the Certified Uptime Center pilot program. Peterbilt has named The Larson Group its 2015 North American Dealer of the Year. Peterbilt also named Hunter Peterbilt as its top medium-duty dealer, The Pete Store as its best MX engine sales dealer, Allstate Peterbilt its top parts and service dealer and Martin’s Peterbilt as its top TRP dealer. Green Bay, Wis.-based Packer City International Trucks, Inc., has acquired the assets of Iron Mountain, Wis.based Schultz Equipment & Parts Co., Inc., Schultz Idealease, Inc. and Schultz Realty, LLC. Fyda Freightliner has purchased land to build a new location in Walton, Ky.

Papé Kenworth has been named the 2015 Kenworth Dealer of the Year. Kenworth also named Papé Kenworth its top MX engine dealer, MHC Kenworth — Kansas City its top medium-duty dealer, Inland Kenworth its top parts and service dealer and Truckworx Kenworth as its top TRP dealer.

Midwest Peterbilt Group is opening its fifth fullservice location in Lincoln, Neb., and has formed a rental and leasing division, MPG Rental and Leasing.

Nextran Truck Centers of Orlando, Fla., has been named Mack Truck’s 2015 North American Dealer of the Year. Mack Leasing North America Member of the Year winner is McMahon Truck Leasing, East Texas Mack Sales received the North America Remarketing Dealer of the Year award, and the overall Customer Satisfaction Award went to Nextran Truck Centers.

Utility Trailer Sales of Southern California has expanded its services by opening a new parts location within the Los Angeles Basin in Santa Fe Springs, Calif.

Volvo Trucks has selected TransEdge Truck Centers of Pennsylvania as its 2015 Dealer of the Year for the Northeast Region. The TransEdge flagship facility is in Allentown, Pa.

Truck Parts & Service Calendar Event information can be submitted at: www.truckpartsandservice.com/story-ideas/

March 31-April 2 Mid-America Trucking Show, Louisville, Ky. April 13-17 HDA Truck Pride Annual Meeting, San Antonio April 29-May 1 GenNext Distributor Training Expo, Atlanta June 4-8 Heavy Duty Aftemarket Canada Annual Conference, Whistler, B.C.

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Industry Focus

HDA Truck Pride Debuts Telematics Partnership HDA Truck Pride has partnered with iMatics LLC to introduce a comprehensive telematics program for the commercial vehicle aftermarket. The integrated platform delivers “a telematics ecosystem with mutually beneficial results to fleets, independent repair facilities and the HDA Truck Pride membership network,” says Tina Alread, director of sales and marketing at HDA Truck Pride. The iMatics platform works by affixing a small Geotab Go7 console within a vehicle and plugging it in it via a J1939 connection. Once linked, the console immediately begins acquiring, evaluating and transmitting data, which it shares with the owner and the HDA Truck Pride network.

Alread says one strength of iMatics’ software is found in its management of diagnostic codes. The software is designed to not only record fault code information but also to evaluate a code reading against a vehicle’s history and like-modeled trucks. In addition to its diagnostic capabilities, Alread says the iMatics system also can deliver real-time data with vehicle tracking, measurable productivity enhancements, regulatory compliance standards and a comprehensive onboard fault guidance diagnostics solution to fleets. Endless enhancements can be integrated including reefer temperature and tire pressure monitoring, as well as, an advanced fuel savings software.

People In The News Suzan Joyce has been named chief operating officer of VIPAR Heavy Duty subsidiary Global Parts Network. Paul Thoms has been named president at Midwest Fuel Injection.

Joyce

Mark Iasiello has been appointed general manager of Power Heavy Duty. Trailer Wizards has named Terry Maw vice president of sales for the Ontario Maw region. Jim Nerone has been hired as director of Information Services & Business Intelligence at Buyers Products. Ian Johnston of Harman HVS has been named president of GenNext. Nick Seidel of Action Truck Parts has named vice president, and Dan Humphrey of Timken, Justine Scriptunas of Meritor, Adam Diecks of Point Spring & Driveshaft, Jeff Paul of VIPAR Heavy Duty and Justin Miller of HDT all have been named to GenNext’s board. Dave Willis of CRW Parts also has been named senior advisor.

Brett Harlan has joined Fontaine Modification Vocational Services as vice president of sales. Meritor has appointed Ernie DeVincent as vice president, Engineering, Quality and Product Harlan Strategy. Aaron Puckett has been named vice president of sales and marketing at Fontaine PartSource. Donaldson announces Douglas A. Milroy has Puckett been appointed to its board of directors. Tom McGuire has joined the Four Star Freightliner sales team as an account manager. BBB Industries has promoted Christopher D. Garner to executive vice president of sales. Lars Nissen and Jake Homstad have been appointed new product managers at Betts Truck Parts & Service. Tim Myers has been re-elected Chairman of the HDMA Board of Directors. Meritor President and CEO Jay Craig also has been elected to the board.

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Michelin Commercial Service Network Expands Fleet Tire and East Bay Tire Co., have joined the Michelin Commercial Service Network (MCSN). The former is based in Knoxville, Tenn., and the latter has eight locations in California. As part of the MCSN, both businesses will offer a complete range of services, including repairs, routine service, diagnostics, inspection, alignments, Michelin OnCall 24/7/365 emergency road service (ERS), and Michelin Tire Care preventative tire monitoring for fleet customers.

VIPAR Heavy Duty Adds SAF-Holland As Supplier Partner SAF-Holland has joined the list of outstanding supplier partners for VIPAR Heavy Duty. SAF-Holland and VIPAR Heavy Duty have developed a U.S. program, which will include products from SAF-Holland brands SAF, Holland, Neway, Binkley, and SAF-Holland Original Parts’ latest product line, Gold Line Quality Parts. The VIPAR Heavy Duty network will enable SAF-Holland to further strengthen its brands with distributors. “We have great respect for our distributor partners, and we are always looking for ways to increase our sales and value with those partners,” says Carl Mesker, vice president of SAF-Holland Aftermarket. “Joining VIPAR Heavy Duty’s list of supplier partners allows us to create value for both teams.”

Industry Focus

Automann Debuts 360˚ Online Part Visibility Tool Automann is doing its part to remove excess trips into the warehouse with its new online 360˚ parts visibility tool. Automann says its new 360˚ tool allows distributors to virtually view a component as if they were holding it in their own hands. “You can see literally every angle of the product, and on top of that, we have superimposed other information that is relevant [to the product],” says CJ Khanduja, vice president at Automann. Khanduja says Automann engineers use computer aided design (CAD) imaging to create the 360˚ visuals, then render each individual component to produce the images now found online.

Mitchell 1, Noregon Systems Enhance Partnership Mitchell 1 has updated the interface between its RepairConnect diagnostic trouble code troubleshooting tool and Noregon’s JPRO Professional commercial fleet diagnostics software, giving technicians streamlined access to TruckSeries, the latest version of Mitchell 1’s repair information for Class 4-8 trucks. Mitchell 1 says the RepairConnect module in TruckSeries includes all of the diagnostic trouble code (DTC) content and procedures in the previous version, but through the updated interface delivers the data faster and in a more user friendly experience. TruckSeries also includes enhancements to vehicle selection, printing, search capabilities and may be accessed from a wider range of Internet browsers, Mitchell 1 says. “With RepairConnect in TruckSeries, users will be able to work more efficiently, limit downtime, and quickly return the vehicle to service,” says Scott DeGiorgio, general manager of Mitchell 1’s commercial vehicle group.

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More than 1,000 components are already 360˚ viewable on Automann’s distributor website, Khanduja says, with more than 10,000 in development to be

added later this year. Automann’s newest print Air Brake & Wheel Catalog also identifies products can be viewed using the 360˚ tool online.

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Industry Focus

Dorman Products Improves Online Parts Catalog Dorman Products has made it easier than ever to look up parts using Dorman’s leading web-based search tools. The company has added a ‘Recently Viewed’ function and VMRS codes (Vehicle Maintenance Reporting Standards) to all of its websites, including www. dormanhdsolutions.com. These new web features, largely based on customer input, are designed to add customization and flexibility to Dorman’s web properties, the

Tidewater Fleet Supply purchases TNT Parts

company says. Dorman says the viewing options for recent search activity is an enhancement designed to save customers time and provide personalization options. In addition, Dorman says its web visitors now have the ability to actively save an additional 20 searches; even offering naming options for each.

Dana Acquires Aftermarket Gasket Supplier Dana has acquired Magnum Gaskets, a U.S.-based supplier of aftermarket gaskets and sealing products for automotive and commercial-vehicle applications. Magnum Gaskets will enhance Dana’s sealing product offerings and complement the company’s Victor Reinz and Glaser global sealing brands, the company says. The Magnum Gaskets brand offers a broad range of gasket solutions, including cylinder head,

valve cover, oil pan, and manifold gasket sets for the North American aftermarket. “The aftermarket sealing business is a priority for Dana, and we are proud to add Magnum Gaskets to our portfolio of wellrespected aftermarket brands, expanding Dana’s market position as a world leader in gasket and sealing technologies,” says Doug Wolma, vice president and general manager of Dana Aftermarket.

WABCO purchases MICO Incorporated WABCO has acquired North Mankato, Minn.-based MICO Incorporated, a global market leader in hydraulic components, controls and brake systems for heavy-duty, off-highway vehicles in agriculture, construction, mining and similar industries. WABCO says it is expanding its product offerings through the acquisition to become the first and only supplier with a portfolio

of complete pneumatic and hydraulic braking and control systems for off-highway vehicles worldwide. “The acquisition of MICO provides us with access to new growth opportunities in the off-highway industry, thereby, enabling WABCO to sustain its outperformance and drive shareholder value,” says Jacques Esculier, WABCO chairman and CEO.

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Tidewater Fleet Supply, LLC, has acquired Atlanta-based TNT Parts, Inc. With the addition of the TNT locations, Tidewater Fleet Supply will greatly expand its footprint throughout the southeastern United States. The combined companies will operate 10 warehouse locations in Norfolk, Virginia Beach, Chesapeake, Hampton and Richmond, Va., as well as Atlanta, Dublin, and Savannah, Ga., Charlotte, N.C., and Jacksonville, Fla. “We are excited about our new partnership with Greg Woods and TNT Parts. Greg and his team have built a high-performing organization with long-standing customer relationships, a strong management team, and a consistent focus on customer service,” says Allan Parrott, president at Tidewater Fleet Supply. “We look forward to working with Greg and his team as TFS continues to grow and create long-term value for all of our stake holders.”

Fleet Engineers Adds Save-A-Load Cargo Securement Business Fleet Engineers has acquired Save-A-Load, Inc., manufacturer of high-quality cargo management bars for the trucking and transportation industries. “Save-A-Load has built an excellent reputation for responsive services and a commitment to quality by leveraging technology to deliver driver-friendly products,” says Wes Eklund, president of Fleet Engineers. “This acquisition will enhance the current cargo management solutions for our customer base, and we are thrilled about the opportunity to manufacture and distribute a new, high quality product that is unique within the market. We are poised for exciting growth and look forward to integrating the manufacturing expertise of Save-A-Load.” Fleet Engineers says the acquisition will increase Save-A-Load’s distribution network from thirty nationwide distributors to more than 2,000.

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Tech Updates

SAFETY RECALLS Autocar is recalling certain model year 20132016 Xpeditor vehicles manufactured Aug. 15, 2012, to Jan. 5, 2016. The affected vehicles are configured with dual-drive, right-hand-standup cabs. In these vehicles, the locking cotter pin on the brake pedal mounting bracket may not be fully engaged, allowing the brake pedal to detach. If the brake pedal detaches, there would be an increased the risk of a crash. Daimler Buses North America (DBNA) is recalling certain model year 2010-2012 Orion VII transit buses manufactured April 5, 2010, to Oct. 31, 2012, equipped with certain Recaro Ergo-M Commercial Bus Driver Seats. The affected seats have J-Brackets that may be missing welds that could allow the seat belt anchorage assembly to separate from the J-Bracket. If the seatbelt anchorage assembly separates from the J-Bracket, the bus driver may not be properly restrained in the event of a crash, increasing their risk of injury. Daimler Vans USA is recalling certain model year 2007-2014 Dodge, Freightliner, and Mercedes Benz Sprinter 2500 and 3500 vehicles manufactured July 1, 2006, to July 31, 2014.

The following are safety recalls issued by the National Highway Traffic Safety Administration:

Upon deployment of the driver’s frontal air bag, excessive internal pressure may cause the inflator to rupture. In the event of a crash necessitating deployment of the driver’s frontal air bag, the inflator could rupture with metal fragments striking the vehicle occupants potentially resulting in serious injury or death. Navistar is recalling certain model year 20162017 IC CE school buses manufactured May 4, 2015, to Dec. 15, 2015, and 2016 IC RE school buses manufactured July 17, 2015, to Dec. 15, 2015, and equipped with certain Transpec T6000, T6100, and T7000 series school bus stop arms. The affected stop arms have a reflective decal that may peel loose from the stop arm. As such, these stop arms fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) number 131, “School Bus Pedestrian Safety Devices.” Without a reflective decal, the stop arms would have reduced visibility to other drivers, increasing the risk of a crash. Vanguard National Trailer Corporation is recalling certain model year 2014-2015 Dry Freight Van Trailers manufactured Nov. 22, 2013, to Nov.

12, 2014, equipped with certain Haldex Life Seal Type 30/30 Long Stroke Air Brake Actuators. The affected vehicles may experience brake drag due to an improperly seated diaphragm in the brake chamber. Brake drag may result in a wheel end fire. Stoughton Trailers, LLC, is recalling certain 2009-2010 Grain Hopper trailers manufactured Dec. 17, 2007, to Dec. 1, 2009. The affected trailers may have an incorrectly positioned panel in the hopper assembly or the lower part of the cargo area of the trailer. The incorrectly positioned panel may separate, allowing the cargo to spill onto the roadway. Additionally, the trailer could have a major structural failure. Either scenario increases the risk of a crash. Western Trailer Company is recalling certain model year 2015-2016 Chip B-Train trailers manufactured Dec. 29, 2014, to Feb. 26, 2015, equipped with certain Haldex Life Seal Type 30/30 Long Stroke Air Brake Actuators. The affected vehicles may experience brake drag due to an improperly seated diaphragm in the brake chamber. Brake drag may result in a wheel end fire.

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Where trucking comes home. Due to popular demand, we’re opening registration earlier than ever before! Kick oﬀ your GATS 2016 experience now with free online registration and we’ll keep you posted on everything to look forward to this year. See you soon! #GATS #TruckShow

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By Lucas Deal, Editor lucasdeal@randallreilly.com

Cover Story

Perfecting your price point The impact of price monitoring on long-term independent aftermarket success 14

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Cover Story

profitable business is defined by its bottom line. But business owners who strive for more than just keeping the doors open, must also direct equal attention toward the top line. Business growth and expansion opportunities all stem from increased revenue generation. And while there are endless business strategies that can be implemented to increase top line potential, no action has a more direct impact than price modification. Pricing in the independent aftermarket is an endless task. With new products entering the industry each day and purchasing costs changing regularly, aftermarket distributors looking to perfect pricing require an innate knowledge of their business, customers and overall marketplace. Set prices too high and you risk turning away good customers. Set them too low and your gross profit margin might not increase enough to allow your business to grow. The key is finding a middle ground that works for your business and your customers alike, which begins the instant you take on a new product line. You can’t determine what retail price is best for a product until you know how much you’re paying for it. This is done by determining the funds required to purchase and ship products to your facility. In the aftermarket, purchasing components in bulk can lower per unit procurement costs for most products, but large, heavy components will still incur substantial acquisition costs. Failing to properly factor these expenses into your true cost of a product can be devastating. “You can price yourself right out of a market,” says Paul Reynolds, product owner at Karmak. Once investment expenses are finalized, you can begin calculations on your retail price. This should be done using a formula that multiplies your investment in the component against an optimal gross profit margin percentage to determine an ideal

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retail price. (Distributors using a pricing matrix should perform these calculations separately for each customer group.) Gross profit margin expectations should not be identical for all products — some product lines demand lower margins while others offer substantial margins gains — but should function within the context of your inventory to help achieve your overall profit margin goal. “Margins are going to vary by part numbers, product lines and brands,” says Don Purcell, partner at Stone Truck Parts. “They are not ever all going to be the same.” And don’t forget about hidden costs. There are unintended and unforeseen expenses related to every product you sell. These costs can develop through operational inefficiencies, such as poor inventory management or unproductive delivery routes, as well as employee miscues, customer misunderstandings and disorganization. Typically unquantifiable until they are removed, these productivity inhibitors can slice revenue from your net sales and net income. All retail prices should be set at points that allow gross profit margin to cover inventory expenses, known operational expenses and estimated hidden costs while still providing opportunity for healthy net profit. “We have target numbers for different product groups and try to hit those targets as much as we can,” says Frank Szabo, president at Ohio Diesel Fleet Supply. “We know what it costs to run our operation, and we try to keep our costs in control so our prices can be responsive within our market.” The best route to competitive prices is operational efficiency, says Dan Straszewski, president at CLF Warehouse, Inc. “You have to become more efficient within your

M a r c h 2 0 1 6 | T R U C K PA R T S & S E R V I C E

Cover Story

Karmak’s business system includes a pricing matrix feature that allows distributors to determine customer and price groups.

operation. That’s just a fact. You must have the least amount of overhead possible,” he says. While no step in pricing is as mathematically stimulating as new product pricing, the nuance and expertise required to manage price has a much larger impact on the overall profitability of a distributorship. Pricing management requires the ability to evaluate data and market trends concurrently. It requires the ability to decipher the difference between a seasonal sales dip and a long-term slide, the skill to uncover hidden costs and tweak prices accordingly. Managing price demands critical thinking skills, and the intelligence to know when changes should, and should not, be made. “Price strategy is not a short-term thing,” says Bill Wade of Wade & Partners. “Your price is part of what you stand for. It’s not something you can jerk around.” Wade says one trap distributors must avoid when managing price is becoming victims of their own knowledge. Customers don’t know what you pay for your parts, nor do they know how much it costs you to sell them. Don’t

let what you know about your finances impact how a customer views your price, Wade says. “You set your price based on your margins and what you need to make,” he says. Wade says this is especially important in situations where a competitor has a lower price. “Just because you find a cheaper price in the market doesn’t mean everyone has found it, and that everyone will jump on it,” he says. “[Customers] might not even know there’s a bargain out there.” And even if customers do find the price, Wade says that’s no guarantee that they’ll leave your business just to snag the cheaper rate. Not every customer buys exclusively on price. Most customers who value comprehensive service will accept a higher price when it comes with great service. “Not everyone wants to be the lowdollar purchaser,” Szabo says. “There

are customers out there that value our service, our product knowledge, our payment structure … they value our company and are willing to pay for what we provide.” In some cases lowering prices can even be met with customer skepticism, Wade says. “You don’t want customers to start questioning the decision, to start wondering if your supplier has substituted raw materials,” he says. “And you don’t want to be known as a business that jerks around your prices.” Setting prices solely to acquire market share is another move Wade says distributors are best to avoid. He says cutting or capping a price to become your market’s lowest-cost distributor nets you the exact type of customer who’s looking for the lowest-cost distributor. And those customers don’t last. “Do you think when you raise your price you’ll be able to keep them?” he says.

Price strategy is not a short-term thing. Your price is part of what you stand for. It’s not something you can jerk around.

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– Bill Wade of Wade & Partners

Cover Story Steady pricing provides a much better environment for developing long-term customer relationships. Such stability in the face of lower cost competition also ensures you remain in control of your revenue. “Never be the guy who gets mad at the other distributors in the market who are always cutting price, and then does the same thing to keep up,” Wade says. “When you do that you let someone you have no respect for run your business.” Which isn’t to say there’s never a good point to cut price. Lowering rates on seasonal items or obsolescent parts is a good way to eliminate dead inventory and free up space for more components with higher profit potential, says Straszewski. As are sales on high-moving products that require additional, higher margin related components. “Maybe you put an airbag on sale because you know the people who are looking for an airbag also will need shocks,” he says. The key is moderation. Net sales and gross profit do not grow at the same rate, and slicing a price to move more parts doesn’t always result in a better bottom line. Especially not when offered to everyone. This is where a pricing matrix comes in handy. By categorizing customers within a matrix and determining your operational expenses in serving each group, Reynolds says distributors can build a matrix that clearly identifies product lines where multiple retail prices can be offered without risking gross profit. “A matrix can be as complex or simple as a [distributor] wants it to be. It really is up to them and how they want to break down their customer base,” he says. Szabo says he checks his price matrix almost daily, and makes sure to review

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it after any vendor price change and in situations where the retail market appears to be shifting. This ensures Ohio Diesel Fleet Supply’s prices remain in line with its internal and external goals at

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all times. Reynolds advises all distributors to do the same, and says Karmak offers training to guide distributors through regular matrix restructuring to ensure their

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Cover Story prices remain optimal. “We try to show them ‘This is where your prices are now, and if you restructure your matrix this is where you are going to be,’” he says. “Pricing is an art, not a science. You have to monitor it every day,” Straszewski says. Adjustments that move prices higher require careful consideration and tact. Wade says good customers are accepting of higher prices when they are introduced through balanced, incremental increases. It’s when numbers swing wildly that customers start to recoil. “Customers know prices have to go up sometimes,” he says. “One percent is there for you all day. You could go into your computer system at night and raise your prices 1 percent across the board and nobody would notice except for your accountant.” And in cases where customers do speak up about higher prices, Wade says don’t be annoyed. A customer who attempts to work with you when your price is high or alerts you to a better deal

It doesn’t matter how large or small, prices for all parts should be set with care to your profit and margin goals, and overall bottom line.

across town is a customer to be cherished, because that’s a person who would rather have a difficult conversation with you than go somewhere else. “I always tell my customers ‘Don’t be afraid to come ask me. The worst I can do is say no,’” says Szabo. But Wade adds that in those situations a discount shouldn’t reflexively be given as a reward, it should be given if market research proves your price is out of line. Being a premium aftermarket supplier

Opportunities in your service department Service sales potential also should be considered when setting retail prices. Offering low prices for parts used in service repairs can entice customers into your bays. And once there, those margins can be recovered through labor rates.

Bill Wade with Wade & Partners advises distributors to include categories for service in a pricing matrix that can easily be quoted to a customer on the fence about a repair. And, similar to retail parts sales, volume matters. A fleet customer

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requiring service on 50 trucks can be quoted a different rate than an owner-operator. “The idea is to drive as much service work into your bays as possible because there’s nothing like the margin on service,” Wade says.

means you’re rarely going to be your customer’s cheapest option, and customers should know that. “Your goal should not be to always get the last sale, your goal should be to always get the last look,” Wade says. Purcell says Stone Truck Parts focuses on value and product quality when conveying that message to its customers. “We don’t sell private labels; we sell OEM first-fit parts and when we go to a customer we sell them on that,” he says. “We try to educate the customer that you want to put back on the truck what came off the truck to maximize performance.” In cases where a customer still balks or is hesitant, Szabo, Straszewski and Purcell all say they’ve given their sales people authority to temporarily adjust prices to make a sale. “We do allow them to make those decisions but we tell them to make sure they are comparing apples to apples and that [the prices] are for likewise components,” Purcell says. And each distributor monitors these exceptions on a daily basis to ensure pricing overrides aren’t overused. Exception pricing is so named for a reason, says Szabo. “If you find out you’re out of line that’s one thing. It shouldn’t be something you need to do all of the time.”

By Lucas Deal, Editor lucasdeal@randallreilly.com

Sales & Marketing

Promotional Partnership The tremendous upside distributors can find through cooperative marketing

arketing is not an easy task for aftermarket distributors. When you carry hundreds of product lines and thousands of components there’s no easy way to promote all of them. Fortunately for the independent aftermarket, this uphill battle does not have to be fought alone. Supplier cooperative marketing programs provide distributors access to funds and marketing materials produced specifically to help them promote their vendors’ products in the aftermarket. These programs are designed to lessen a distributor’s marketing load, and help

both ends of the distribution channel target the end user. And because they are funded solely by vendors, there’s no reason every aftermarket distributor shouldn’t be using them. Cooperative marketing helps distributors reach their customers, says Dan Bond, president at A-1 Truck Parts. “It helps us get messages out,” he says. “And that helps, because I want to make sure we’re getting as many pieces of [promotional materials] in front of the guys that throw the box away as possible.” Debbie Polok, president at Southwest Truck Parts, agrees.

“The money is there for you,” she says. “There’s no reason not to take advantage of it.” Most aftermarket suppliers offer some form of cooperative marketing. Not every supplier names the program as such, but most make it point to allocate funds specifically for distributor-level marketing campaigns. Hendrickson has offered a cooperative marketing program for distributors in place for decades, and uses prior year sales to determine how much marketing dollars each distributor can access during a given year, says Brian VanCamp, segment manager – Aftermarket. Other distributors have similar programs. Meritor distributors become eligible for cooperative

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Sales & Marketing marketing funds when they reach a specific dollar amount in yearly sales, says Craig Frohock, vice president, North American Aftermarket and Trailer. Bendix also requires a sales threshold. Any full line Bendix distributors that meet the requirements has access to cooperative marketing funds, says Jerry Conroy, North American regional vice president – Aftermarket Sales. “The funds are available for use on advertising and promotional programs that promote the local sale of Bendix products,” he says. In each case, the suppliers say distributors are given a lot of flexibility on how they can use the funds. So long as a distributor can clearly show how they plan to promote a brand and its product lines, the suppliers say they’re almost always granted access to the funds. Customers who propose cooperative marketing initiatives to Phillips Industries are free to get started as soon as the supplier signs off on the project, says Stephanie Schroeter, director of marketing. She says the company’s customer base has found many productive and unique ways to put the money to work. “Our customers are very creative in their use of the funds. They’ve used funding to print specialized literature or mini-catalogs. They use the funding to create incentives for their customers,” Schroeter says. “I am continually surprised by the inventive ways distributors can find to effectively use co-op funding.” “We don’t limit their decisions. [Distributors] have a lot of options,” adds VanCamp. “The funds are there so they can market our brand and our product lines that they stock to their customers.” Building such a connection is another valuable trait of cooperative marketing programs. One that benefits the suppliers and distributors alike. Establishing or strengthening the link between a supplier

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and distribution point ensures customers always exactly know where to go when they need a part. “A coop marketing program is more than just coop marketing dollars. The most successful marketing programs come from a coop approach to the entire process working together to build programs to grow the business,” says Steve

McEnany, vice president of Marketing and Technology at Midwest Wheel. This is especially valuable with brandloyal customers who appreciate premium products. “Our customers like to know we’re carrying the good stuff,” Polok says. “It reassures them that when they buy from us, they are getting the best parts.”

Southwest Truck Parts tries to spread out its cooperative marketing funds to purchase a variety of products to provide its customers.

Coop marketing methods Most aftermarket suppliers offer distributors a multitude of options for spending cooperative marketing funds. Below are four of the most popular options. Merchandise: Distributors may spend cooperative marketing funds to purchase shirts, hats, calendars, etc. to give to customers as a perk of doing business. Coop funds also can be used to purchase gifts for sponsored contests and/or events. Promotional items: This can include anything from a sales flier e-mail blast to a

product catalog distributed by sales people. Produced with content provided from suppliers, these materials showcase the supplier product lines supported by the distributor. Signage: Many aftermarket suppliers also will produce retail display signage for distributors as a way to jointly promote product lines. This

allows distributors to acquire high-quality signage at a discounted rate. Events: Other distributors choose to allocate their available funds for various customer-centric activities. These events (such as open houses and golf outings) allow distributors to heavily promote their vendors’ brands to a captive, engaged audience.

M a r c h 2 0 1 6 | T R U C K PA R T S & S E R V I C E

Sales & Marketing

Point of purchase displays are another popular cooperative marketing option, and offer significant merchandising benefits.

These connections also can enhance a customer’s trust in their distributor, because they link the independent business to vendors who are true product experts, says Bruce Sommerville, vice president and chief operations officer at Drive Train Industries. And customers crave distributors who can help answer their questions, he says. VanCamp says Hendrickson is very supportive of training events or promotional materials that offer product guidance for this very reason. “It allows us to use our expertise,” he says. Another benefit to cooperative marketing that suppliers in particular enjoy is the ability to shape unique messages to

specific sets of customers. Nationwide advertising campaigns are broad by design, but speaking in generalities is not always the best way to promote a brand or product in a specific market. With cooperative marketing, suppliers can craft the perfect message for any end user group. This can be done through promotional materials such as branded sales fliers or custom signage, as well as events where distributors work with suppliers to prominently feature a brand or product line. “Our distributors know their trading areas far better than we do,” says Schroeter. “They respond quickly to opportunities and usually have an excellent sense of what types of programs and incentives will work.” Synchronizing a distributor cooperative marketing effort with a vendor’s national marketing campaign can be profitable as well. Sommerville says Drive Train Industries likes to schedule sales and marketing efforts to mesh with vendor marketing campaigns so when customers come in contact with either message they are immediately drawn to the benefits. “[Marketing] is about increasing your sales, your brand awareness and equity. The more touches and feels you can place that product in front of the customer the greater benefit that you have,” he says. Bond follows the same formula when building his promotional schedule. He says he requests marketing calendars from his vendors at HDAW and takes them home and builds A-1’s plan around them. The strategy pays off wonderfully. “It’s our biggest bang for our buck,” he says. Cooperative marketing also might be the industry’s best method of promoting new products. It allows manufacturers a direct link to educate end users on its newest developments while clearly

T R U C K PA R T S & S E R V I C E | M a r c h 2 0 1 6

highlighting where a customer can go to get its newest part. Co-op marketing is pull through marketing at its best, Frohock says. “We want to keep the promotion of our products out there in the market at all times to support the long-term sustainability of our brand, and our [distributor] customers,” he says. Bond has added television displays behind the counter at A-1 Truck Parts to show highlight products. Suppliers provide the videos, and Bond says he requests they use the opportunity to promote their newest innovations. “Simple awareness can pay huge dividends,” he says. Sharing resources is another benefit of cooperative marketing. Many suppliers have access to high-quality printing and marketing material that distributors could not or would choose not to purchase on their own. Suppliers often grant distributors access these services when producing content for a cooperative marketing effort. “We have a lot of capabilities to produce art, graphics and promotional materials and get those out quickly,” says VanCamp. Bendix does the same thing, Conroy says, allowing distributors access to its “AdBuilder tool or other options to create support flyers or brochures that promote Bendix products in the market.”

The more touches and feels you can place in front of the customer the greater benefit that you have. – Bruce Sommerville, vice president and chief operations officer at Drive Train Industries

Sales & Marketing

I think if they see [a logo] every day then when they need something they know exactly where they can get it. – Vince Mathews, president at Capitol Clutch & Brake

Then there’s the goodies. Cooperative marketing programs allow distributors to purchase merchandise that can be given away to customers as perks or prizes. Shirts, hats and office supplies are among the most popular products distributors choose to purchase with co-op marketing funds, suppliers say. While these items don’t offer much opportunity in the way of the messaging, they can still be branded with distributor and supplier logos to link the two businesses. Polok says she regularly receives

customer requests for magnets, memo pads and other office supplies, and says each one she gives out is branded with logos of some of Southwest Truck Parts’ best vendors. Vince Mathews does the same thing at Capitol Clutch & Brake. “I think it helps a little bit,” says Mathews, president. “I think if they see [a logo] every day then when they need something they know exactly where they can get it.” Sommerville says that example alone should be reason enough for any distributor not using cooperative marketing

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to look into it. The goal for suppliers and distributors alike is to sell as much product as possible, and cooperative marketing programs exist so the former can help the latter do just that. “The benefits are there. These [suppliers] do this for a reason,” Sommerville says. “The money has been earmarked for you. It is there to build your brand. If you don’t grab it and use it, it’s lost. I really don’t understand why anybody who had it available wouldn’t use it.” Adds Conroy, “We value our relationship with our distributor partners. We are privileged to have mutually beneficial relationships where our products can provide our distribution channel partners with opportunities for sales growth and profitability … In doing this, Bendix benefits as well.”

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Marketplace

The Buzz

The five hottest products as determined by readers of truckpartsandservice.com

Automated Transmission Clutch Eaton has added the 430mm Push Wear-Thru clutch for Volvo I-Shift automated transmissions. Designed for longevity, Eaton says the Push Wear-Thru clutch with organic facings will initially be offered in 232 mm and 254 mm damper sizes. Eaton says the soft rate damper design has been proven

effective in lowering harmful vibrations to reduce downtime and extend the life of transmission synchronizers

Brake and wheel product catalog Automann has released its 2016 Air Brake & Wheel Catalog. The comprehensive 1,136-page catalog features air systems, foundation brake, and wheel end and hardware. It contains detailed product information on more than 6,500 parts and hardware kits, more than 3,500 individual images, and a 45-page tool section listing brake, driveline, electrical, sockets suspensions and tire tools. The catalog is available at www.automann.com for the company’s distributors.

Anti-jackknife trailer product InventHelp says an inventor from Colorado has designed No Jack, a component that could prevent a semi-trailer from jackknifing. InventHelp says No Jack uses a retractable steel pin that would be produced in built-in versions for use on new-production vehicles. When a trailer’s wheels reach 20 mph, No Jack activates the pin that drops down and locks directly behind the kingpin on the fifth wheel. The pin sinks into the fifth wheel plate and remains locked into place to prevent the trailer from swaying side to side. Once the trailer’s wheels reach 19 mph or below, the pin automatically retracts back into the trailer’s apron.

T R U C K PA R T S & S E R V I C E | M a r c h 2 0 1 6

and other driveline components. Cushioned organic facings promote smooth engagements, Eaton says.

Expanding aftermarket product line Dorman HD Solutions has added a variety of new components to its aftermarket product offering. Dorman says the products include more than 15 SKUs of its DirectFit fog lamps, more than 30 SKUs of its DirectFit ABS wheel speed sensors, a DirectFit engine coolant level sensor, DirectFit window regulators and more than 20 coolant reservoirs SKUs.

New steer tire Bridgestone Americas introduces the R283A Ecopia steer tire. The R283A Ecopia steer tire features several performance enhancements over its predecessor, the R283 Ecopia, and designed to deliver 21 percent longer wear life and a three percent better rolling resistance. The tire also is EPA SmartWay Verified and California Air Resources Board (CARB) compliant. The tire is available now in the U.S. and Canada in sizes 295/75R22.5 and 11R24.5 and will be available in 285/75R24.5 and 11R22.5 sizes by April.

Marketplace

Wheel balancing weights

King pin replacement set

Plombco has launched Value Line Series, a complete line-up of cost-effective low profile steel adhesive wheel weights. In addition to the silver-gray ¼ oz. segments, Plombco says it also now offers black colored and ½ oz. segments in boxes of strips or in 15 lb. rolls format.

Meritor has introduced its FastSet King Pin Kit for a quicker solution to aftermarket king pin replacement. The kit eliminates the need for reamers, special tools and presses, and king pin bushings do not need to be reamed after they are installed into the steering knuckle, which saves labor, time and equipment costs. Meritor says instead of pressing in the bushings during installation, customers also can use the kit to easily install spiral bushings by hand. Additionally, the king pin’s special groove pattern design allows grease to permeate high-wear areas, the company says.

Load securement catalog Doleco USA has released its new 2016 Load Securement and Lifting Products Catalog. Since its initial product catalog was released in 2014, Doleco USA has continued to expand its product lines. The 52-page catalog features more than 100 new products and more than 300 total SKU’s. It can be found at www.doleco-usa.com/ literature.

LITTLE GREEN TOOL, BIG GREEN SAVINGS.

SMART SOLUTIONS THAT PROTECT YOUR PERFORMANCE. Out-of-adjustment air brake stroke is a top CSA violation. But with the new Meritor® AllFit SimpleCheck™ tool, drivers can check air brake stroke immediately, easily and accurately. Just one look is all you need to know if the brake system needs attention. So it’s easier to run safe and stay in CSA compliance. And SimpleCheck is even easier to install. For more information on how the Meritor AllFit SimpleCheck can help you C.Y.A., visit MeritorCYA.com. ©2016 Meritor, Inc.

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M a r c h 2 0 1 6 | T R U C K PA R T S & S E R V I C E

Marketplace

Lightweight aluminum wheels

Corrosion resistant shock improvements

Accuride Corporation has introduced two new lightweight aluminum wheels. Re-engineered to reduce weight by 5-7 percent, the new aluminum wheels are both standard type 22.5 in. by 9 in. wheels. Accuride says specifications for the new wheels include: • 41730 wheel – Replaces previous part number 29730 and features a reduced weight of 4 lbs. • 41012 wheel – Replaces previous part number 40012 and features a reduced weight of 3 lbs.

Gabriel has updated its FleetLine and GasSLX shocks to improve corrosion resistance and improve misting. An improved anti-corrosion coating now protects mountings where shock absorbers attach to the vehicle chassis, Gabriel says, while the improved the misting-reduction seal on FleetLine and GasSLX shocks reduces the amount of oil lost through misting by 70 percent over the life of the shock.

Heavy-duty vehicle lift lighting Rotary Lift has introduced an LED runway light kit for heavy-duty vehicle lifts. The Line Light 4 kit includes four long LED light wands, uses more than 600 LEDs producing more than 4,000 total lumens — the equivalent of about four 75-watt incandescent bulbs. The Line Light 4 kit (P/N FA5700) works with Rotary Lift’s HDC Series, parallelogram, SM30 and AR18 heavy-duty lifts, and can be retrofitted to most runway-style lifts.

Off The Line Spotlighting a new OEM innovation

Maintenance product line expands Minimizer has released its third maintenance product line bench, the Dual Tire Work Bench, while also debuting a new Rear Center Light Panel. The Dual Tire Work Bench follows the success of the Single Tire and Tandem Work Benches. The Rear Center Light Panel comes in several different poly finishes, including four different colors (black, red, white, green), as well as paintable, liquid platinum, carbon fiber, silver mirror finish and smoky black mirror finish. Minimizer says both come with the company’s lifetime warranty.

International launches Class 8 vocational truck line International Truck has debuted its first all-new vehicle in six years, the HX Series Class 8 premium vocational truck line. “The launch of the HX Series is an opportunity for International to recapture a leading position in the vocational market – a segment we previously led,” says Troy Clarke, president and CEO at Navistar. “The launch of the HX Series underscores our commitment to innovation, our dedication to uptime and our position as a leader within the industry.” The new line includes both 115 in. and 120 in. set-forward and set-back axle models, International says. “The design of our new HX Series is based on in-depth discussions with leading users of severe service applications,” says Bill Kozek, president, Truck and Parts at Navistar. “Each of the four models in the series has been engineered to deliver unmatched performance for the most punishing jobs, while making operators more productive.” International says the HX Series will replace the International PayStar model.

T R U C K PA R T S & S E R V I C E | M a r c h 2 0 1 6

Marketplace

Aftermarket downspeeding powertrain components Dana has launched several new aftermarket service parts that have been specifically designed for powertrains to optimize the benefits of engine downspeeding.

Dana says more than 150 heavy-duty genuine Spicer part numbers have been added for the Spicer AdvanTEK 40 series tandem drive axles and Spicer Life Series SPL 350 driveshafts and universal joints. The new service items include genuine Spicer universal joints, axle carriers, axle housings, axle shafts, yokes, seals, overhaul kits, power dividers, and more, and the company says all have been designed to effectively handle and manage the high torques and stresses on driveshafts, axles, and inter-axle shafts associated with downspeeding.

Visual brake stroke indicator TSE Brakes introduces the TSE VisiChek visual brake stroke indicator. TSE says the Visi-Chek displays green when the brake stroke is in compliance and red when further inspection is required. And TSE says the indicator is designed to be easy to read even in low light conditions where brake chambers are located. Five part numbers handle the majority of TSE Brakes applications, and the company says each package contains two units to handle one axle, an instruction sticker to place on the vehicle, and simple installation instructions.

Fender catalog Hogebuilt has released its new product catalog for the year featuring its stainless steel fenders and custom brackets. The products featured are produced with 304 premium mirror finish stainless steel and 430 mid-grade mirror shine stainless steel. The new catalog also displays the patent-pending flush mount bracket. Hogebuiltâ&#x20AC;&#x2122;s catalog is available at www.hogebuilt.com and in a traditional print version.

T R U C K PA R T S & S E R V I C E | M a r c h 2 0 1 6

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Wash

MEETING THE BUSINESS NEEDS OF FLEET EXECUTIVES

HELPING YOU RUN A MORE SUCCESSFUL FLEET OPERATION

8/21/13 1:40 PM

HELP YOUR Protecting Motor OWNER-OPERATORS RUN Carrier Interests in A MORE SUCCESSFUL Contracts BUSINESS A BUSINESS MANUAL FOR OWNER-OPERATORS PRODUCED BY OVERDRIVE AND ATBS

A BUSINESS MANUAL FOR OWNER-OPERATORS PRODUCED BY OVERDRIVE AND ATBS

5 MANUALS INCLUDED:

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• How to Use Financial Statements • How to Evaluate Life Cycle Costs • How to Write A Business Plan • How to Manage Cash Flow • How to Plan for Succession

IF SAFETY IS YOUR NUMBER ONE PRIORITY, THE AIR BRAKE BOOK IS A MUST-HAVE.

• Controlling operating costs • Understanding proﬁt & loss statements • Maintaining equipment • And much more...

USB purchase and digital download available.

Print and digital download available.

Transportation Attorney Henry E. Seaton’s eBook shows motor carriers how to steer clear of problems with shippers, brokers, owner-operators, insurors and factoring companies.

Digital download only.

ORDER these resources at eTruckerStore.com Check out our FREE shipping options

30eTrucker T RStore_TPS0215_PG.indd U C K PA R T S & S E R1 V I C E

March 2016

1/22/15 9:36 AM

Ad Index Company

Contact Info

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Automann

888-288-6626

Automann

888-288-6626

Company

Contact Info

Page

ProMiles

800-324-8588

Overdrive’s Pride & Polish

888-252-0878

dormanhdsolutions.com

Radiator Works

877-RAD-WORK

www.gennexthd.com

RIGDIG BI

randallreilly.com

Great American Trucking Show

888-349-4287

S & S Truck Parts, Inc.

800-621-1553

Haldex

800- 643-2374

SAF-Holland Original Parts

800-876-3929

Hunter Engineering Co

hunter.com

Meritor, Inc.

meritor.com

IFC

Shell Lubricants

800-231-6950

IBC

Meritor, Inc.

meritor.com

Meritor, Inc.

meritor.com

Meritor, Inc.

meritor.com

BITIMEC International

877-637-1900

Midwest Truck Parts

800-934-2727

eTrucker

800-633-5953

Minimizer

800-248-3855

FinditParts

888-535-2635

Dorman HD Solutions GenNext

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