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Private labels in automotive refinishing market

I have had an idea of writing this article since long time ago. Initially I believed that as the owner of a private label brand, I would be biased and subjective. Yet, now I feel that it is the right time to share with you my vision. If you visited the last Automechanika Fair last September, you would have realized that there are more and more new brands in the market, mainly private labels. For the known reasons, I cannot use the names of the companies and brands in the article, but in any case, the intention is not to discuss any particular company or brand, but to shed the light on the place of private label companies in the car refinishing market overall.

A little bit of history

In order to understand why there is a growing number of non-manufacturing brands, one should analyze first the very nature of the products portfolio needed in a car body paint shop. The reality is that a contemporary painter requires a wide range of tools and consumables to get the job done. Abrasives, masking products, sealing and anticorrosive materials, personal protection products, fillers, clear coats, primers and, of course, paint itself, are just a few to mention. The range is vast and diverse. It is not possible, even for big multinational brands, to produce chemicals and, let’s say abrasives, at the same time. Yet the end user searches for a one-stop shop to get all his consumables needs covered. Inevitably, even large manufacturers go after the outsourcing of the big part of their products portfolio. Actually, the concept of the private labeling has been introduced by the producers, not traders.

Different types of private label companies, partial manufacturers as I mentioned before, the very first private labeled products have been introduced by the leading paints producers, who wanted to enlarge their offerings by non-paint products, like tapes or sanding discs. I call them “partial manufacturers”. A typical example of a partial manufacturer would be a liquid chemicals producer, who has under its brand’s umbrella all the rest of materials needed in a car repair process. However, for the last couple of years, we see the opposite examples just as well. Producers of abrasives, for instance, add chemicals and other products to their catalogue, and with a great success in certain countries.

Pure private label brands

You can find nowadays a good deal of the brands, which do not produce any or the vast majority of their products they sell. These companies are assembling their products range like a puzzle, working with different manufacturers virtually all over the world. A part of those companies became really sizable businesses, and, they are actually lined up with many leading physical manufacturers. Success here depends on how well-tuned their range is, how the marketing works, and whether they have enough financial background to back the endeavor. Building successful private label brand involves a huge amount of time spent on sourcing and testing the products, which would fit the existing range and create a uniform product offering with consistency and coherence.

Fake manufacturers

I know at least one company, which built its corporate story around a decades old factory, which never existed. The intentions are clear, this brand wants to attract customers, who want to work with “real” producers. Is it good or not? I don’t want to judge.  But believe me, the false or misleading marketing has been used by many companies in different areas of business. One famous notebooks producer boasts that it notebooks were in favor of Ernest Hemingway. Small detail, the world renown writer died before the brand was born.

Advantages and opportunities of private label brands
  • Flexibility. Most of the private label brands are very quick and flexible. They react much faster on the market’s shifts than the physical manufacturers. For example, if a customer of Etalon needs a particular product, which is not in our range, within 30-45 days we can have it ready. Larger companies may need months if not a year to react. The secret here is that we don’t rely on a single manufacturer with its existing range and production restrictions.
  • Using the best producer for the product category. It is not a secret that every manufacturer has strong and weak production sides. A purchasing manager of a private label brand knows very well where he or she should go “shopping” for bodyfillers and where for clearcoats.
  • No geographical limits. This is my favorite. If your market is saturated and/or the local economy is in recession, with your own brand you can literally sell anywhere in the world. Etalon is a proof of this. Actually I am writing this post on my way to Australia and New Zealand.
  • Possibility to serve diverse customers segments. If you are a physical manufacturer in Switzerland or Germany, for example, you may experience a difficulty to cater for the price sensitive markets simply because your fixed costs are high. However, if you are a private label owner, you can create two product ranges, by placing your orders with different producers depending on their price levels.
Disadvantages and difficulties for private label companies
  • High order volumes. If someone decides to launch a private label brand, he or she must be aware of high order quantities required by manufacturers. Usually it is minimum a pallet per product, size or color. Therefore financial backing in this case is very important.
  • Logistics. Big order quantities will require large storage facilities and a fine-tuned logistics are imperative. It is also important to have really professional people in the purchasing department, who will monitor constantly the stock levels and place the needed orders just in time.
  • Overstocking and under- stocking could ruin all the efforts.
  • Marketing. Don’t even think about starting private label without professional marketers and designers onboard. Poor appearance, slow webpage, outdated labels design will never allow you to grow. Unfortunately, many private label brands go unnoticed because of unprofessional marketing. Also, since we are dealing with chemicals, it is crucial to have experienced labels’ designers, who would know all the regulations for safety and dangerous goods handling.
Takeaway

The main idea, which I wanted to share with you is that private label brands could be as valuable suppliers as physical manufacturers. However, launching a brand or a product group with your label is much harder than one could imagine. Constant market prospecting, product testings, innovative marketing techniques, smart brand name, catchy corporate identity, trade mark registration, professional design, miles and miles of traveling, all these are required for success.

Enjoy!

Hidden High-End Shop – FenderBender – January 2014 – United States

Hidden High-End Shop – FenderBender – January 2014 – United States.

5 myths about polyester putties

Myth #1. Polyester putty with aluminum particles is designed  only for aluminum body parts.

This is a very common, for reasons unknown to me, misunderstanding about this very useful material. To understand this better, it should be clarified that it’s a resin, which affects adhesion, not a type of filler used in polyester putty.

In our case aluminum particles are used for the following 3 reasons:

1. Aluminum is stronger filler than talc in ordinary fillers or glass balls in light ones. This is why putty with alu particles should be used on body parts subject to mechanical stress.

2. Aluminum, unlike talc, doesn't absorb solvents. Therefore putty with aluminium shrinks no more than 1%, while talc based fillers may shrink up to 3%. Hence, polyester putty with alu may be used when a thick layer of filling is needed.

3. Due to its rich aluminum content, filler with aluminum can be used on car body parts where high temperatures are probable, like in engine compartment or on a bonnet. Aluminum particles help the heat to spread out without concentrating in one particular place, moreover it can be used as an intermediate layer in combination with other filling putty. Thus, the high  temperature will not cause any damage to the repaired part. In fact, putty with aluminum can stand temperatures of above 90° C without losing its properties, whereas ordinary product only up to 80° C.

3 putties

Myth #2. Resin on top of the putty means low quality or an expired product.

I have extensively discussed this subject with many colleagues of mine, and there is no justified reason to believe that a sign of resin on the top of the putty when it is opened, means any particular performance problem. What is very important though, is to mix the resin in the putty thoroughly, and under no circumstances to spill it out. A rule of thumb is that too dry consistency of polyester filler will be difficult to work with and over-usage of hardener may occur to make it more workable. While, too much resin separation makes it more difficult to mix and apply on vertical surfaces.

  Resin

Myth #3. The most important characteristic of quality polyester filler is ease of sanding.

This is probably one of the most common myths about putty. No doubt, it is very important to have a product, which is easy to shape. Especially in growing markets, where sanding machines are not widely used, and all blocking jobs are done manually, ease of sanding is very helpful. However, the major purpose of polyester filler is to "fill" the surface and mask the damage. If polyester filler shrinks, it will reveal the repaired area with a contour. From my point of view, good polyester putty should show minimum shrinkage of less than 3% at first place. I would also put other important characteristics first, for instance, adhesion properties, absence of pinholes and ease of application.

Myth #4. The more hardener you use, the faster is the drying time.

All the manufacturers of polyester filler recommend using only 2-3% of hardener. Nevertheless, many car sprayers and panel beaters believe that more hardener will significantly improve the drying times. The bitter truth is that  the filler's molecules will bind only with a certain molecules of the hardener, and not more. In addition, excessive hardener will react with consecutive coatings, causing discoloration and adhesion problems.

  Too much hardener

Myth #5. Light putty replaces all the other types of filling putties.

It is true that nowadays more and more body shops use light putties as a primary filling product. These materials are easy to sand, they have low shrinkage ratio, plus on a thin metal used in contemporary cars, lightweight putty causes less vibration. Nevertheless, light putties (with glass or plastic balls as fillers) are less rigid than common putties with talc, aluminum or fiberglass fillers. Hence, we can not use them on rusted areas or where mechanical stress is significant.

 

 

4 Ways to Speed Up Your Body Shop Productivity

Productivity watch

We all keep
saying “Time is Money”, but very few of us really do something to really
increase the body shop’s delivery times. Even if you understand that your
repair process is not smooth or effective, you hardly know where to begin from,
what to change? Nevertheless, by doing adopting 4 steps program below, you will
significantly decrease your car delivery time up to 50%!

                                                                                           
Productivity bust

1.      
1.
Improve
your body shop layout. Actually this one is the most difficult. You may say
that your working space is limited and hard to change, but from our experience
there is always space for improvement and optimizing already existing places.


Layout
    

         
Break
down your space on different working areas. The biggest mistake is to do all
jobs everywhere. Additional time will be needed for moving tools and equipment
around the place. Usually the main areas are: 
panel area,
where damaged parts are taken off, prep area, where body
filler is applied, sanded and afterwards the surface is cleaned with tack rag
and degreased; painting area or spray booth, where primer, basecoat and
clearcoat are applied; finish or polishing area, where final inspection and
defects removal take place; and finally washing (valeting) area, where the
vehicle is washed, ideally before and after the repairing process.

         
Minimize
the time of moving the cars between working areas by relocating each working
place according to logical sequence of jobs execution

                                          
Shop layout

         
Follow
the link for Spieshecker brochure “Successfully designing a new bodyshop” for
more tips or just admire this video from Spanesi designed body shop. 

 Us   2. Use
fast drying spraying materials in combination with Infrared lamps. Paint
materials for collision repair have advanced for the last decade. You can find
a very fast drying fillers, basecoats or clears almost in all major car
refinishing brands.
In addition, infrared technology made
our lives even easier. We can speed up drying times for small area repairs
without even getting into spray booth. It is amazing how underused this type of
equipment is in many body works facilities!

3.     3.  
Keep
it clean! I will never stop saying that having your place clean is crucial for
your image and work quality. And when I mean “clean”, I refer for 4 Cs concept.

         
Clean
shop

         
Clean
car (surface to be painted)

         
Clean
air in compressed air system

         
Clean
you (I mean gloves and overalls will keep your dust out)

                                        
Clean body shop

4.     4. 
Don’t
cut the corners during the preparation work. It is known fact that 90% of all
time you spend on car painting job is actually preparation of the vehicle for
painting. Skipping steps and avoiding proper procedures will only cause lengthy
and costly re-work. So, follow your suppliers’ technical instructions to be
fast and efficient.  

            
2 hours delivery

Does your shop appeal to customers?

Smily house

I have always liked the articles by Mark Clark, which he posts in Bodyshop Business Magazine. Just a few days ago I read a new one with the title: "Does your shop (body shop) appeal to customers?" In this short and very to the point article Mark emphasizes that clean facility, welcoming attitude and attractive shop sign will definitely help to business owner for closing more deals with potential customers. Simple as that. Hovewer, I have seen a lot of car paint centers dirty, with smileless people and with old, weatherworn sign glooming over the facility. Sometimes in order to improve body repair business, you just need to paint your walls first…


Clean body shoop

Standing out from every other local body shop is a difficult process.


"When I travel, one of my hosts often says that I just “have to see”
so-and-so’s shop because of how cool it is. Those visits lead to tours
of some pretty thoughtfully designed collision repair facilities.
Without exception, these shops look really good from the street, the
parking lot and the office.


Looks Are Everything


Many years ago, I was conducting an informal customer survey about choosing a body shop for a BodyShop Business
story. At the same time, a Louisiana college was doing a similar
survey. Not surprisingly, both of our results mimicked those that every
insurance company has identified as a key part of Mrs. Smith’s repair
facility choice: a squeaky clean presentation. Every survey ever done
about collision repair indicates that the consumer is favorably
impressed by a clean facility and a welcoming attitude. I’m at a loss to
explain why, if clean is so important, that many body shops aren’t.


Physical presentation is the required first step in a profitable close
rate. If your shop’s appearance from the street doesn’t look at least as
professional as your competitor’s shop, Mr. and Mrs. Smith will drive
right on by, even if their insurance company directed them there. Never
forget that their vehicle is their second most valuable asset, and
unless you look like you’ll take good care of their car, they’ll try the
super clean-looking guy they drove by to get to the suggested but
unkempt DRP shop. The signs, the lawn, the parking lot and the window
glass all send a message to anyone driving by. Mrs. Smith only has a
collision every seven years, so she has lots of time in between to drive
by lots of local body shops. She’ll remember the shipshape ones.


Attitude Change


Other vital consumer preferences that collision repair marketing studies
agree are important include a prompt reception, a welcoming attitude
and a sympathetic ear. And they mean every time, every shopper, not just
when nothing else is going on.


I watch it happen frequently, even at the sparkling clean shops I’m
privileged to visit. The receptionist and estimator are upbeat and
welcoming to the first Mrs. Smith in the door each day. As she heads off
for the shop’s attractive, well-lit waiting area for some hot or cold
beverages, the phone rings, and rings again and again just as the next
few Smiths drive in for some help. One by one, the prompt recognition
(“I’ll be with you shortly, please enjoy a fresh coffee”) becomes
ignoring everyone except the rambling caller on the telephone. The
friendly attitudes and pleasant smiles turn into harried scowls as each
new customer seems to indicate more workload for the staff; clearly,
they’re missing the point that more work is the objective.


Finally, the salesperson’s sympathetic ear transforms from a patient
recipient of a vivid description of every moment of Mrs. Smith’s
once-every-seven-years collision to an “Uh huh, uh huh, sit over there.”



Sign of the Times


So you say your shop meets all my listed criteria so far? Congrats! It
takes a lot of work to maintain a shiny, clean building, parking lot and
office every day. But how will I choose among your shop and all the
other clean and friendly good guys?


Signage sends an important message (pun intended). Easy-to-read,
colorful and professional signs go a long way toward solidifying a
desirable experience for the Smiths. From the turn-in off the street,
signs should clearly point the way Mrs. Smith should proceed. Legible
signs should likewise direct where she should park her car, which one is
the correct front door and where she should go now. While I see many
top shops with great signage outside, I seldom see any with great
signage inside.


While Mrs. Smith waits for her estimate, rather than have her thumb
through old magazines or watch a scary video of someone’s badly wrecked
car getting pulled out on your frame machine, tell her exactly why she
should choose your shop on a big wall sign. On a large,
easy-to-read-from-across-the-room, professionally done sign, tell the
Smiths why you’re great. My ideal sign would feature your colorful logo
along with a one-sentence quote from the ownership promising to do a
superior job. The sign would also bullet point all the swell things
about your shop: technician training, latest equipment, insurance
relationships, years in business, lifetime warranty, etc.


Having seen this done several times in very cool shops across the
country, I’m convinced it’s a powerful closing tool. Mrs. Smith is
already in your waiting room; in addition to a warm welcome, a clean
place to sit and fresh beverages and snacks, take the opportunity while
she’s captive to clearly list in writing all the reasons she should
choose you. She’ll read it – I promise.


In addition to the inside signs telling your story, you could reiterate
the same strengths on a handout sheet that you could staple to the
Smiths’ estimate – in the unlikely event they forgot some of your
wonderful qualities. Far too many shops don’t close well. They write a
complete sheet, smile when the Smiths arrive and thank them for the
chance to bid the repair of their vehicle. Top shops ask for the sale
every time, in no uncertain terms. Like what? Like, “Mrs. Smith, we
would like to repair your car, and our trained techs, state-of-the-art
equipment and stellar local reputation will make the process seamless
for you. May I schedule your car for repair?” Good closers ask for the
work in plain English, every time. The worst that can happen is she says
no. If she says why not, it’s your chance to overcome her objections.


Closing the Deal


Among the many statistics in the Industry Profile in the May 2013 issue of BodyShop Business
was close rate, also called capture ratio or batting average. It’s the
percentage of estimates written that turn into repair orders. The
formula is simple: number of ROs divided by number of estimates for a
set time period. According to the shops that responded to the Industry
Profile survey, the average close rate is 62 percent. The survey also
indicated that the average shop fixes 13 vehicles each week. A 62
percent close rate means they wrote 21 estimates to get those 13 jobs.
That means that eight customers stood in the waiting room, shook hands
with the estimator each week and had their car fixed somewhere else.
Eight lost jobs per week, 49 work weeks a year and an average RO of
$2,238 per the survey means that $877,296 of work walked out of the
average shop.


Could your shop use another three-quarters of a million dollars in work?
Shops ask me all the time where I think they should advertise, but
until their close rate is in the 80 percent range, I say don’t advertise
for more work. Just clean up, smile, explain clearly and close the work
that’s already finding your shop. "



Mark R. Clark is the owner of Professional PBE Systems in Waterloo,
Iowa; he is a well-known industry speaker and consultant. He is
celebrating his 25th year as a contributing editor to BodyShop Business

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