More motor factors are adding retail offerings alongside trade products to remain competitive in the modern aftermarket. Andy Ingram, Business Development Manager of FPS Leisure, and Richard Baron, Business Development Manager of FPS Maintenance & Accessories (M&A), explain why this is a good idea and how to make the most from the initial investment.
With the aftermarket’s ever competitive landscape, many motor factors are constantly looking for ways to access new revenue streams. Many have reaped the benefits of selling retail products alongside their trade offerings because they cater for a wider demographic of customers.
Factors that have yet to venture into a retail arm can find the notion slightly intimidating. With even more demand for resources to an already busy factor, it can feel overwhelming to the business owner. However, with the right support from a ‘one-stop’ supplier, motor factors can find that adding retail products to their existing offering is actually not as hard as it seems.
Why add retail?
“Richard Baron: “While a customer is waiting for his clutch or driveshaft at the motor factor, he would probably consider getting other products like car care, maintenance and accessories.”
Motor factors have a unique advantage when it comes to developing a retail aspect to the business. With the existing premises, footfall and parking facilities available to them, venturing into retail makes perfect sense to boost sales and
profit margins.
“While a customer is waiting for his clutch or driveshaft at the motor factor, he would probably consider getting other products like car care, maintenance and accessories if it was available to him,” Richard Baron says. Items such as screen wash and engine oil are in constant demand by garages, as replenishing them is part of modern service packages. Having items like that in stock would benefit the motor factor given that they are easily sold.
The core range of products available at a motor factor maintains steady sales. Retail products have the potential to boost sales because it provides the customer with a range of complementary products that they need to have in order to get the job done. With a retail arm, motor factors have a wider range of products to reach non-automotive customers.
Stay in control from the start
Sourcing for retail products through various suppliers and keeping track of stock holdings can be an arduous task to those who are just starting out. To help maintain profitability and traceability from the start, factors should look to a supplier that provides the flexibility for the factor to stay in control from the initial investment.
“Control of how much investment going into the retail arm should fully rest on the motor factor,” explains Baron. “Whether it is an 8ft display of starter products or a full shop-fit, a good supplier should be able to provide the customer with the flexibility to start comfortably and provide expert guidance that allows them to grow at their own pace.”
A simple source of added value
A supplier that can support a motor factor from the beginning is invaluable. To ensure long term peace of mind, the supplier should also have the capacity to cater for the factor’s growing needs, as business progresses.
This means that a reliable supplier should have a vast range of products available to them. With the variety of brands and products available in every sector, factors should stock what customers want to buy and the supplier should be able to cater for that.
“When FPS M&A and Leisure representatives visit their clients, they spend a good amount of time going through the shop, facing up products, tidying shelves and making note of what products the business owner might need to improve sales. It is not about making the client agree to stock a crate of products that they think they need; it is about helping them ensure that the products they have in stock sell,” explains Andy Ingram.
Added value service can come in many forms. However, suppliers with a strong vested interest in their clients’ success are always ready to proactively respond to market trends and product seasonality. In addition to identifying lucrative sales opportunities, they should be prepared to provide support in expertise and promotions where needed.
Expanding stock variety for wider customer base
By stocking corresponding retail maintenance and accessories that work with existing trade offerings, motor factors enjoy better profit margins by link selling. Stocking fast moving consumables, accessories, car cleaning and care products are viable and solid options. Alongside that, there are other items that appeal to a wider range of customer and still relate well to the products and components that would sell in any traditional automotive shop.
“Currently, many motor factors are stocking traditional travel and touring products like tow bars, warning triangles and bike racks. Others have expanded their leisure product offerings and it is a good time to do so. Reports indicate that Britain expects to see up to a 20% uplift in staycations, camping and caravanning over the next two years,” says Ingram. “If a factor doesn’t already stock leisure or M&A products, stocking them and promoting their availability will help with the footfall numbers.”
Maintain focus on core business
Staying on top of existing customer needs, while catering for the new, can feel like a balancing act. Therefore, it is important to maintain focus in the core business even with the launch of a new retail arm. A good one-stop supplier can both take away the pressure of sourcing new products and keep on top of market trends.
FPS Leisure and M&A can help make low cost of entry achievable with tailored ranges to fit the factor’s requirements. From a simple 8ft display of starter products to a full shop uplift which includes measuring, designing, 2D plans, 3D designs and layout advice, FPS Leisure and M&A team have the expertise to help factors modernise their premises and assist them through the growth of the business.
Stocking through FPS is fully traceable with an itemised spreadsheet loaded with stock suggestions, the number of SKUs on the bay and pricing suggestions. With regular follow-up visits, the FPS representatives help factors stay on top of their existing stock holdings and give them the latest updates of market trends.
