As many of you know, my wife and I own and operate an independent aftermarket truck and automotive accessories retail store in MA. We are coming up on the end of a 5-year lease so it’s a natural time to look at the business and make some decisions about future direction. I have to say that the business environment for small retail shops is extremely difficult and I have to wonder what things are going to look like 5 or 10 years from now. Here is what it looks like from our point of view.
Customers come into the store and we help them figure out exactly what they need and what will work best for them. Then, having received that service, they will expect us to match the lowest on-line price they found before coming in. Sometimes we’ll have people take the information and immediately thank us for the help and tell us they are now going to go buy it on-line. We even had one person do that, then come back to the store expecting us to provide him with warranty replacement of the item he bought on-line and that came in damaged. This sort of thing happens often enough that we no longer tell people what part number they need or we use an internal part number of our own.
We operate at a 6.25% price disadvantage right from the start, since we have to charge sales tax. Then, we have to deal with manufacturers who compete with us by selling directly to end users at prices that leave us with minimal profit margin. Or, they sell to the Summits of the world at distributor discount levels because of their volume knowing they will be competing with smaller brick-and-mortar stores. Now, on top of all that, we have Amazon telling people to use our store as a local showroom and then use their smartphone app to get an extra 5% discount from the lowest price they find.
So my question is this, basically: What do people think is going to happen to all the small local businesses that sponsor town athletic teams, advertise in school yearbooks, donate to local parades and community organizations, that support local Boy Scout and Girl Scout troops? Do they think that they can buy online and not eventually see those businesses disappear? Main Street is under an incredible assault and, contrary to popular opinion, it’s not coming from politicians. It’s coming from the people who want the lowest possible price and seemingly no longer care about the service associated with it. It’s also coming from the large corporate chains and the manufacturers.
Like any business owner, we will make any adjustments we can to try to be profitable but the situation does make me wonder what small towns are going to look like in the coming years if people no longer care about keeping Main Street healthy. At the same time, I appreciate that wages have stagnated over the past 30 years and people are just trying to stretch every penny to maintain a standard of living. I guess I’d just ask everyone to think twice before buying something on-line if there is a good alternative available in the area.
I understand everything you’re going through. I think the unfortunate answer is that most of those type of businesses will disappear. People no longer value a relationship with a local business and the service they provide. It’s all about getting it cheap so they have more money to buy more cheap crap. I started to rethink my outlook on this about a year ago. I made a conscious decision to support local guys that are a part of my community. If I can get the things that I want or need from a local business for a comparable price, I buy from them. That includes the big box stores as well as online. I try not to consider the sales tax since shipping often cancels that out. And I do have limits, I expect to pay a little more but I won’t be gouged either. All that being said, I’m just one guy and I know I’m not really making a difference. But I do feel better about myself for at least trying to do what I consider to be the right thing.
Yes, we do. We’ve had some customers come to us to install what they purchased on-line. Other ways we’ve adjusted are by doing dealer projects and by attracting more business-to-business sales. We also refuse to resell products for manufacturers that don’t have a minimum advertised price (MAP) policy or that run their own e-commerce sites that offer pricing we can’t match. But anything that people aren’t likely to want to install themselves represents our more recent areas of diversification, such as snow plows.
For those inclined to ask what a snow plow is, it’s a big piece of shiny metal that goes on the front of a truck and is used for clearing a path through large accumulations of cold, white, fluffy stuff that we get up here in New England. A fair number of people choose to have those installed by the snow plow dealer (us!, for example).
I buy online not so much for price but for convenience. I have a limited amount of spare time and the last thing I want to do is spend one of my days off driving between a bunch of stores trying to find someone with the item I want in stock. Once online, I do shop for the best price but it may very well be higher than what I can get it for in a local store. My time is worth more to me than a few bucks saved here and there.
For a lot of manufacturers, we have to buy through warehouse distributors. That can sometimes mean that Summit, for example, will sell something for $5-10 more than it costs us to buy. When we add on the minimum profit margin we need to get, people do think we’re trying to gouge them. They don’t realize how the manufacturers give the Summits of the world a built-in competitive advantage if they don’t implement a MAP. When they do have a MAP policy, we’re typically competitive and the customer gets the in-store service as a value-add. So we generally don’t try to sell a customer something when we know they’ve been researching on-line and we can’t come close to the on-line price but sometimes we end up being seen as bad guys anyway.
Ultimately, I do think the typical retail stores will disappear. The hobby shop in the storefront next to ours is going out of business at the end of May due to on-line price competition. We’re going to downsize our storefront beginning in July to reduce our overhead. I just don’t think people are aware of how much local businesses do in the community and what it’s going to mean when they aren’t there any more to do it.
That’s a big challenge for us. We can’t carry the inventory necessary to cover all the vehicle permutations just represented by the Detroit full-size truck models, let alone everyting else. So we work with a distributor that delivers to us every day. As a result, customer orders are filled the next day if we didn’t have the item in stock (we do carry some items on hand; generally our rule is to stock anything that turns over 6 times or more per year). And we’re the area go-to for lug nuts and popular lug nut keys when people need them right now.
We try to minimize the inconvenience by allowing existing customers to order by phone and only make one trip to the store for pickup. We often deliver to our business customers when we know it’s difficult for them to leave their business to pick something up. All of those things help us survive and maybe that will be enough for another 10 years. But Amazon’s recent app adventure is a new level of aggressiveness toward local stores and it’s a bad omen, IMHO.
I am honestly sad to say it but you are screwed and it is only getting worse… Even my 84 year old Grandmother who said she would NEVER own a computer takes her laptop everywhere these days and has dropped her land line (same # for over 50 years) and now has a smart phone. There will be a few that survive, one being my local True Value Hdw store who is owned by a 70 year old guy who started working there when he was 13. I don’t give a rip if I pay double with him, they walk me directly to my plumbing fitting, carry it back to the counter, know my little boys by name and reach under the counter for a Jolly Rancher every time. All four of my boys got to walk past the “Old Henry” pocket knife display and know on their sixth birthday they got to go in and choose one. Still… As patriotic and teary eyed as I am (even as I type this) I too am just another nail in the coffin of main street. It used to be that my SNAP ON tool guy had a 1 in 5 chance of at least selling me “The Special Of The Month” when he stopped by. Not now, I can find it on ebay used for 40% of retail and get it before his truck ever shows up. Dewalt 18V XRP batteries are on sale at LOWES right now for $90 a pair, forget that! I can get them online for $58 a pair with free shipping! The two little Mustang shops within an hour of me face the same thing as Bill outlined. They are little “one man shows” who still use carbon copy receipts and rely on walk-ins. Average walk-in will stay for a half hour pumping these guys (who have been in biz for decades) for their infinite Mustang knowledge, look at every part, admire every car and spend $20. The only reason they stay in biz is they own their property free and clear and they are too old to change their habits now. Think their sons will take over? Never… Will Boy Scouts, Elks Clubs, Grange Halls and the like survive? Yikers… Not looking so good and the loss of real “community” is going to have a really negative impact on our society. We used to chuckle at the Amish, how many are starting to envy them?
Its definitely a two way street for shopping. Like Jeff, I shop alot online because of the convienience and the ability to check prices and availability from my chair. But if I ran across a local store that had the knowledge I would be a frequent customer. Back in the day when I was working on my 67, I stopped at a local napa store and talked to the guy about my problem, he suggested a new ignition switch, had it in stock, and away I went. From that time on during the project I would make sure that was my first stop and had my list ready. But the mom and pop or just pop stores are hard to run across these days I’m sure as a result of the warehouse big names. I went to my now local napa store a week or so ago and asked where the prestone was, the reply was “we don’t carry prestone” and walked away. If he had taken the time to say well we don’t carry prestone because we stock this brand for this reason or something I might have bought the in stock item. Although it was only a 15 dollar item I went off to walmart and probably wont go back to napa. But like everything else there is no more “local” garage where you could pull up a crate in the afternoon and talk cars. Thankfully though the cyber sites such as this have sprung up where people can share points of view, experience, and help to those of us out here trying to keep our cats running strong.
I always go to the CarQuest down the street first, and buy from them if at all possible. Dude that manages the place is very knowledgeable and helpful. Also, he’s not afraid to be super cool. Like when I went there to buy a remote start button (under hood, not wireless) he told me they didn’t have them, collected up the parts with which I could build my own (momentary switch, wire, alligator clips, nothing special) and looked up all the prices and then told me I could get it cheaper if I just go buy an actual one from NAPA.
The future is really bleak for American businesses. This is the fault of the American consumer and also the mechanisms that have programmed our collective psyche for the last several decades. Cheap disposable junk, buy it as cheap as you can, use it till it breaks or becomes obsolete, throw it in the trash and repeat. It’s been what, about 40 years of that now?
It’s a crap road we’ve been going down, and I feel bad for anyone who wants to be in retail sales. The only model I have seen work in this sort of climate is the “we have the best stuff and you can’t get it anywhere else and if you want it you’re gonna buy it here and pay full price and get lifetime warranty service from us and if it’s too expensive for you then you don’t belong here” model that a former employer of mine has been running for 25+ years, probably 30+ years, with great success. Only sells products he can get an exclusive deal with, where nobody else within 100 miles is allowed to sell the product, and only chooses products with profit margins of at least 40 points preferably 50. The last year before I quit, he bought his wife a Jaguar and paid cash.
Aren’t many internet businesses Mom & Pop operations? For every Amazon, there’s a small local company selling their wares through their website. I don’t think American business are getting killed by the internet, I think traditional brick and mortar stores are being replaced by internet sales out of a warehouse. Those businesses are still making a profit and could be contributing to their community just like a more traditional small business would. This isn’t the first time business in America has had to adapt to extreme change to survive. Those who are forward thinking and willing to try something new will survive. The others won’t.
You won’t find many of those examples in the automotive aftermarket. The only way to do on-line sales effectively is to have a year/make/model database that includes all the model variations. Catalog Rack wants $16K per year to license theirs. There’s not a mom-and-pop store on the planet that can afford that kind of expense on top of the expenses of a retail storefront. You’re right about the need to adapt, though. We will do our best to adapt and hope it’s enough. But people should remember that Main Street isn’t populated by warehouses. Without those stores, the character of small towns is going to change significantly. I also have my doubts that warehouse-based businesses will have the same connection to (and therefor willingness to invest in) the community that retail store fronts have.
I understand this problem all to well. I owned a brick and mortar “Main Street” comic and used book store. We were the only comic shop in the county. A couple of other used book stores opened then soon closed. As a comic distributor we had our books on the shelves two months in advance before Walden, Wal Mart or other retailers. This gave us a “one up” on them at the time. During the late 90’s and early 2000’s we lost that edge. Wal Mart started selling comic related merchandise below my cost and I saw the writing on the wall. I sold out in 2006 and within a year later the new owners closed the store. The reason was DC and Marvel comics we’re doing mail order cheaper than the store could retail the comics. Some business will survive but most will not. So if at all possible I try to support local small business.
Steven
The age of Technology is the culprit, not just the Internet. My business is strictly service (almost no parts sales), yet the expenses get higher & higher! I used to pay $150.00 for repair manuals and Labor Guides through Motor & Chilton, Now the Print versions are $250.00, and tell you to “consult a repair Shop”! Mitchell, and Alldata want you to spend $200 per Month, and the Information is almost as useless! add to it that the Auto manufacturers are using worthless product designs(5.4 Three valve ford spark Plugs COMMONLY break off in the head), which Wreak havoc on labor times. Road service?? Yeah, Right! I’d Love to watch someone limp home a Powerstroke with bad Injector harnesses, or change them on the side of the road!
Fortunately, we’ve been able to keep some IDI(Mechanical Diesels) in the fleet, and most of the “add-on” electrical is basic, but I feel the Winds of change Blowing, and am starting to lean toward Restoration work.
I try to support the local shops when ever possible too. It just does not always work out that I can do that.
When I was stationed in Oklahoma, I tried to buy my Cougar parts from the local expert (starts with a K), but even though he was extremely knowledgeable and had almost any part I could ever want, He was very conceited and way over priced. I lived about 10 miles from him and ended up ordering tons of parts from Don and Lynn at WCCC because they are much more pleasant to deal with and do not gouge their customers.
Now that I am stationed in Iowa, I still order my Cougar specific parts from WCCC andI prefer to do business with them because of their prices, attitude and outstanding customer service. (No, Don did not pay me for this ad. This one is on me.)
I do buy the remainder of my auto parts from local shops as often as practical in order to do my part to support the community.
For the everyday Items I shop around the local shops and check for price, quality and warranty, then make my purchase. For anything Cougar specific or speed related I need to go online. There is one local shop that specializes in speed parts that has a laptop on the counter and orders the parts the in. This is not a problem until the parts dont show up. Then the BS starts about why the parts are not coming in. I ordered plenty of parts online an know how long it takes for parts to be shipped to our end of the globe(usually 10 days). If this guy would be upfront and tell me he not placing an order until he gets more customers to save on shipping, but would rather piss people off. I would rather save myself the hassle and go online!
We always tell people how long it will take for something to come in. For about 90% of what we sell, it’s no more than 2 business days and there’s no shipping fee. For the other 10%, it’s anywhere from a week to 3 weeks, but we know what it will take for any specific item and we usually add a small fudge factor to that. We also don’t do any kind of mark-up on shipping; whatever we’re charged is what the customer pays. But there is another shop in the area with an owner whose attitude is similar to the one you’ve described. We don’t know how he stays in business, other than that he apparently owns his building and has no employees.
Personally, I’m about 50/50, online vs. local. I’ve bought a ton of stuff from Don, MU, and Rktmn, but have also purchased from local speed merchants, local Mustang dealers, paint jobbers,etc. For me, it all depends on “how fast do I want it”. If I can wait, online it is. If I’m just itching to have it NOW, I probably burn twice the price in gas trying to find it local. LOL.
Case in point, tho not Cougar related…just got a new truck, and wanted to put step tubes on it. Found them online, but didn’t want to wait. Went to Truck n Stuff, a Tulsa business I’ve frequented since 1983(with Pops), and bought from them. Had them in three days, supported a local, and didn’t pay a whole lot more than online + shipping…:shrug:
A fair number of people choose to have those installed by the snow plow dealer (us!, for example). 
Mitchell, and Alldata want you to spend $200 per Month, and the Information is almost as useless! add to it that the Auto manufacturers are using worthless product designs(5.4 Three valve ford spark Plugs COMMONLY break off in the head), which Wreak havoc on labor times. Road service?? Yeah, Right! I’d Love to watch someone limp home a Powerstroke with bad Injector harnesses, or change them on the side of the road!