beauty machine

Tag Archives: auto paint supplies

Multi brand paint shop vs a single brand carrier

Those of you who have followed my blog for a while, probably know that I really like comparing how car refinishing industry vary from region to region. It is fascinating how different the business models could be in an industry, where precise (color) match is the main target. What is even more fascinating that there is no right way to do business either. Let me share with you my observations how the paint supplying stores operate in different countries.

Even in the English speaking markets, the name describing automotive paint selling shop differ. Factor, jobber, “paint guy”, distributor, paint warehouse, are just some of the business names I’ve stumbled upon in my career.

Putting the names aside, the look and products assortment usually has a similar pattern. Paint mixing scheme(s) put in the very center of the whole store. Plus a range of clears, fillers, primers, thinners, non-paint consumables, including abrasives, polishing compounds, sealants, aerosols, tapes, and at least basic equipment, like spray guns and sanders. While the number of different auxiliary products brands may vary, what is the main characteristic of a business is whether it carries one or more car paint brands.

Multi-brand store

If you walk into a paint store and your eyes catch more than one mixing schemes from competitive paint brands, then this shop can be considered as multi-brand.  It is important to recognize that the store carrying brands of the same group can hardly be described as multi-brand. For example, if the shop owner has PPG and MaxMeyer mixing systems, he or she probably follows some sort of a corporate strategy in the market. These paint systems could be complimentary. However, if you see Glasurit and Sikkens products side-by-side, than it is a distinctive example of a multi-brand paint supplier.

Pros and cons of multi-brand paint shop

Let’s have a look into the advantages of having more than one paint brand on the shelves. Firstly, if you have a number of paint systems, you can “play” with the approvals, which a particular brand has for certain car manufacturers. If your key customers “require” this or that paint brand because, then you can offer what they require. No need for expensive and lengthy presentations and trials. “You want Spieshecker, here you are”.

Secondly, in reality all paint systems have their strong and weak sides. I mean ALL. For example, X brand may perfectly match Japanese vehicles, while the brand Y does the Americans really well. Having multiple paint brands in store allows a store owner to be flexible.

Thirdly, with multiple brands at your hands, you may cover different customers, based on their price sensitivity.  If a certain customer sprays old cars and have a lot of overall refinishing jobs, then a more economic paint may do the job. There is no need for a high-end, premium paint in this case.

Last, but not the least, the multi-brand store is truly independent business. The owner has more choices and freedom to steer his business towards more profitable solution.

If all the above sound too good to be true, I bring to your attention some drawbacks of having multiple paint brands in your store. The main disadvantage is that no paint producer will view you as 100% partner. There will be always some moaning involved. Usually paint companies will not bring you ready customers to serve, and technical and financial support will be limited.

Single brand shop

On the other side, a paint-supplying store with the only one paint brand (group) inside, can be described as a single brand shop. Often, this kind of business is called, unofficially, by the name of paint brand. Sikkens shop, Standox stocker, Axalta jobber, Glasurit guy, etc. Besides being identified as a famous brand, carrying a single paint system has also a number of benefits. Firstly, you enjoy a full support and area protection from the paint producer. Secondly, often a “mother” company brings you good customers to serve. Literally. Thirdly, stock management is much easier. Less stock, means less frozen money. Sounds great to me! Nevertheless, don’t jump into conclusion so fast. What if the idealistic relationship may stagger? You may loose a key supplier overnight. What if your preferred paint supplier is too expensive or weak in certain important aspects? What if your paint supplier decides to leave your market? Yes, it happened in the not-so-distant past. No jokes.

Conclusion

As you realized, both strategies have strong advantages and potentially dangerous disadvantages. I usually do not advocate for any particular way of doing business. Your decision though should be based solely on your own interests. Don’t be trapped by any sales manager, however capable he is. The managers come and go, while your business is here to stay…

 

UV or not UV?

Those of you, my dear readers, who have taken part in a trade fair as an exhibitor, know how exhausting it could be. However, trade fairs are still the best way to meet new people, catch up with colleagues and learn new things about your industry. Today, when the Collision Repair Expo in Melbourne closed its doors, I look back and think, apart from meeting new and old friends and colleagues on this fair, I definitely take with me the understanding of one future defining technology – UV curing coatings.

While UV technology is not something completely new to the collision repair industry, yet it is now, when all the major automotive paint producers actively market it. During the last three days in the Melbourne Exhibition Center I had an opportunity to get some deeper knowledge of the UV-curing products’ advantages over the conventional 2K coatings, and the challenges, which follow this trend.

Some of you may ask the question: ”Why do the major players in the automotive refinishing industry start marketing UV-cured products now?” Well, benefits of such materials have been known before – ultra fast drying, zero sinking (shrinkage), no heat curing (great for sensitive areas), one component materials (no hardeners required). Yet, what are the challenges? Is adopting UV technology an easy ride? There are a few obstacles though – high initial investment in equipment, products cost (UV materials are expensive) and resistance to change from the painters, when especially the benefits are questionable. Let me analyze what I mean.

Initial investment

One of the largest obstacles for any new technology is the cost and complexity of the associated equipment involved. On this direction I can clearly see some development for last couple of years. For example, I saw some new players entering UV-curing equipment, like the UV-curing brand Lihtan. Australian designed Lihtan brand attracted many visitors in Melbourne Collision Repair Expo this month. Milton Da Silva – cofounder of Lihtan – told me during our conversation in Melbourne that the interest for the UV technology is at its pick; this is why he works closely with all major paint brands to offer affordable and reliable UV light systems. Already many premium automotive coatings manufacturers approved Lihtan UV equipment (www.lihtanuv-a.com). It goes without saying that the more manufacturers of the related equipment appear, the better.

Cost of UV materials

This is probably one of the most important obstacles at the moment. With an aerosol UV primer retailed at more than 70 Euro per can, these products could hardly be described as affordable. What the suppliers of UV-cured materials need to do first – is to explain really well and in details how an ordinary bodyshop will benefit while paying such a high price. One could really claim, for example, that difference in drying time is not that big to justify the premium paid. If, on average, with IR lamp a spot primer would dry in 6-7 minutes, a UV primer would require about 2-3 minutes. Is the 4-5 minutes difference serious enough argument? The question should be answered by each sales rep selling UV stuff. On the other hand, if the UV technology really takes off, manufacturers will achieve economies of scale, and the prices may go down. Time will tell.

Resistance to change

By nature, a human being is reluctant to leave his comfort zone. This applies to all aspects of our life, including our work life. Therefore UV technology will have to go through painters’ and shop owners’ hyper-criticism, skepticism and doubt. However, there is nothing new here. Waterborne paints were met with a lot of criticism too, and now more and more collision repair shops switch to “water”.

I am sure that UV-curing materials will find their place in modern bodyshops only if the paint producers will explain and communicate legitimate, not just on PowerPoint slides, benefits for both painters and business owners. Those benefits must outbalance the expenses and costs of the materials for most of the bodyshops out there, and not only for the very top ones. Only if an average smash repair store profits by the novelty, we would be able to say with assurance that UV-cured technology found its place in the sun…

 

 

Market differences between the UK and the rest of Europe

The idea of this article came to me on board of a flight from my business trip from London to Athens, after a week spent with Etalon’s customers in Ireland and the United Kingdom. I was thinking about the differences between the Great Britain and the continental Europe in various aspects of life. You can not underestimate the old British empire and its influence on Europe (and the whole world. This relatively small island has always been in avant-garde of history. If you are in doubt, just think of the language you use while traveling to any part of the world. Do you speak English? With the procedure of Brexit triggered, the glorious Kingdom has to renegotiate its place on the political and economic map of the old world.

Of course, my article is not about politics. I would like to share with you my views about the automotive body and repair business in the UK in comparison to the rest of Europe.

 

Consolidation of coatings suppliers

For those who are not familiar, automotive paint supplies stores in the UK are called factors or motor factors. Firstly, I would distinguish a very high level of consolidation in the UK paint supply chain, with groups like Morelli Group, Movac Group or LKQ to be very sizable and hungry for growth. While consolidation is not completely unknown in Europe, it is still going in slower pace. Secondly, the corporate groups, like above mentioned, have tremendous purchasing power. They strike deals with manufacturers directly, pushing out of business the smaller players.

Types of factors

In the UK you will see more and more companies with spare parts trade background, which incorporate refinishing departments in their business structure. Supplying spare parts is a business with high entrance costs; it requires  fine-tuned logistic departments, big warehouses and a fleet of the delivery vehicles. With all this set up, they try to achieve much needed growth by supplying paint and consumables as well. Of course, this affects greatly the traditional paint-only stores.

Materials costs

Many of my colleagues from other countries believed that the British market price levels are on the high side. You will be surprised how low the prices are for many essential consumables. Probably it can be explained by the extremely high competition, and, by the levels of the consolidation, I mentioned already. When the large groups manage to negotiate large deals with the manufacturers, inevitably their smaller rivals will search for supplying solutions from the lesser-known brands. In addition, you will see many cheap private labeled products in white boxes on the shops’ shelves. Therefore, prices for many materials are bottom low.

Body fillers

When I look at the shelves with body fillers, I think of the United States. Just like across the Atlantic, in the UK, a traditional body filler is usually lightweight and comes in tall 3-liter cans. You will not see much of flat 2kg or 1L tins, which are so popular in Europe. A lot of the body fillers I tried, required a thin layer of glaze to be used to close pinholes. Also, very “American” thing. In the mainland Europe we see predominantly universal (filling and finishing) putties in use.

Fast is the keyword

I supply paint products to various countries with very diverse climate conditions, but what surprised me most in the UK – a demand for the fastest possible curing primers and clearcoats. We had to introduce extra fast hardeners to all of our two pack materials!  Nothing was quick enough. I have seen a painter mixing an express clearcoat with extra fast hardener, adding accelerator and fast thinner. How is that? Of course, speed comes at cost of quality, but this is a subject for another discussion.

On the other hand, you should also consider the very high levels of humidity in certain regions, which affects negatively curing times of 2K materials. In addition, plenty of smaller bodyshops avoid using a spray booth for drying to save on energy costs.

After Brexit era

Automotive refinishing business in the UK is very dependent on imports. Therefore, uncertainty is very high. What will be the customs duties? What additional costs will the customs procedures bring along? How the payments of VAT upfront upon the goods arrival will influence the cash flow of distribution? What about the border between Northern Ireland and Republic of Ireland? Too many questions, no answers so far. Perhaps a bit of English humor will help our friend in the UK to overcome all the obstacles.

 

Why smaller independent suppliers and producers are absolutely needed for the car repair business.

I am the owner of a relatively small automotive refinishing materials brand. Etalon is not alone. The number of similar companies is increasing, and I am delighted about it. Nowadays, when few big “sharks” try to buy one another, the very existence of companies like Etalon is even more relevant and important.

We do need competition

Unfortunately, without honest, fierce competition this, and any other industry, will not prosper. Public corporations lack human face. Prove me if I am wrong. The owners are investment banks, hedge funds or any other so-called institutional investors. THEY DO NOT GIVE A DAMN ABOUT THE PAINTERS’ NEEDS! What they only care is the current shares price and dividends paid. This is why there has been very little TRULY innovative products, which TRULY solve customers needs. Please share with me, if you believe that I missed something. On the other hands, the management of those companies fly first class, drive expensive company cars and get five and six digit pay cheques.

Does big mean safe?

There is a false opinion that working with “big” names is safe. It is absolutely not true. During my fifteen years career in the car refinishing industry I have seen an international paint producer virtually abandoning the whole continent, leaving its customers with empty mixing machines. I have experienced the results an acquisition of one of the big non-paint consumables producer by a huge multi billion company with a result of the lost customers loyalty, supply disruptions and the best people leaving the brand.

Also, I can bring you the example of the leading equipment manufacturer to raise prices without any particular reason by more than 20% with the ridiculous excuse of “brand repositioning”, but without changing the products itself. You may tell me that small companies can make mistakes too. True. However, the smaller players are more down-to-earth, and the owners of these companies (yes, they have real owners) would think it over before upsetting their customers.

About a year ago I posted on Linkedin the article “Do my company have the right to exist?”. I was really happy to hear that people from our trade share my vision. The main point of this short blog post is to ask you, my dear readers, to give a chance to companies like Etalon. Try us! Be strict, but be bias-free! Our industry needs to escape the hungry teeth of the consolidation. Small can be innovative, small can be efficient, small is an advantage, not vice versa. Governments have anti monopoly rules, but oligopoly is hardly any better. Oligopoly is a market system, which we probably will have very soon if the pace of consolidations will continue at current speed. Two or three paint producers will supply two or three bodyshop groups, paid by a few insurance companies. Is it going to be good for the customers? I have my doubts. And what do you think?

 

Inventory management in auto paint supply stores. 6 problems and solutions. Part 2.

Poor delivery times from suppliers

When we select our suppliers, we usually consider two main parameters: quality of the goods and price. Nevertheless, a third parameter for the decision making is of utmost importance – delivery times. On many occasions, it is better to choose slightly higher priced supplier, who guarantees faster goods delivery. You will save more with less “frozen” money in stock and avoid back orders with customers (back orders may actually never become orders, if the customer buys the needed products elsewhere).

Solution

Always consider delivery terms as a vital parameter when choosing a supplier.

Storage problems of certain refinishing consumables

As I already mentioned, in auto paint supply shop there are numerous different products. Some of these goods, especially painting materials, must be carefully stored to avoid quality deviations. For example, most polishing compounds shouldn’t be exposed to very low temperatures; masking tapes and PU sealants might lose their properties if kept in places with very high humidity; aerosol sprays shouldn’t be exposed to high temperatures and direct sunlight.

Solution

Fortunately, virtually all automotive paint related materials are supplied with MSDS (material safety data sheets) and TDS (technical data sheets), where all the necessary storage related information is clearly stated. Keep all the necessary documents handy for all the employees in the warehouse so that they could consult these whenever it is necessary.

Natural disasters, robbery and other unpredicted events

Five years ago all my stock turned to ashes. Fire destroyed 100% of all goods, nothing was left. Even spray guns melted down. It was a very hard lesson. Natural disasters like fire or flood happen more often than we think. Robberies are also common in modern cities. Force majeure, as sometimes we refer to unfortunate events, are part of commercial risks, yet, we can and should protect ourselves against such events.

Solution

Warehouse insurance policy costs must be an integral, non-negotiable part of any company’s budget. Choose the insurance company as carefully as you choose a spouse. I mean it. In addition, do everything possible to prevent such disasters as fire or robbery. Nowadays, one can find a great variety of security systems, while fire systems installation is mandatory in places handling flammable goods. Please, do not cut the corners here.

Conclusion

I am quite confident that the information in this article is not new for you, my dear reader. However, from my point of view, we need some sort of reminder from time to time. This is exactly what I intend in this post and many others in Etalon Refinish blog. In modern collision repair industry we embrace new technologies, repair processes and materials, but forget timeless business practices. Inventory and stock management are taught in the business schools and MBA programs, and it is not a coincidence that larger corporations have highly skilled employees in charge of logistic departments. On the other hand, in smaller businesses like auto paint supply shops we act like “Jack of all trades”, therefore a complicated task of warehouse and inventory management is yet another task in our routine. Well managed warehouse is as important as loyal customers; it will save you money and headaches. The best time to work with your stock is in low periods, like summer holidays and Christmas break. Devote more time to fine tune your warehouse, and rewards will come immediately.

 

Translate »