In the past couple of weeks, We hear that two parking equipment manufacturers have bought a dealership or have, in one case, decided to go direct. Just what does this mean to the consumer.
In AmanoMcGann’s case, they bought ASSI in Southern California. This means that like in many markets, they will be selling their products direct. Zeag announced that it was going direct in Southern California. Its dealer is no longer carrying its products. McGann has been direct in many markets for years, and has purchased dealers in Boston and Chicago. This is something new for Zeag.
I have mixed emotions about this trend. Don’t get me wrong, these companies have every right to operate as they see fit. Most likely they will bring focused service and support to their customer, and ensure that their products are well installed and represented. After all, they are the manufacturer, they most know what they are doing.
On the other hand, dealers tend to be a force for manufacturers to reckon with. They represent the customer and often need to lobby manufacturers for "fixes" and support. The Parc Group was originally formed for just that reason. And they have been very successful in being able to talk to manufacturers with a common voice.
I have no particular prejudice either way. I’m just noting that in some markets, these manufacturers may find themselves competing with themselves.
JVH
2 Responses
As long as the products, service, and support are provided to the customers in a professional, reliable, and guaranteed manner, it likely doesn’t matter whose name is on the building.
Many times, these acquisitions/mergers/buyouts are originated by an increasing need to improve on the items listed above in a particular market.
As long as the purchasing/acquiring agent has the customer’s best interest in mind (from a product / service / support stance), it’s likely that the overall market will benefit from the change.
Remember, as well, that change takes time. Simply buying a company, putting a new name on the door and getting new letterhead doesn’t mean things are different. It takes the right team of dedicated people with the right support behind them to make things work. This can take some time to get rolling, but a strong foundation leads to a stronger future for everyone involved.
Good luck to these markets – hopefully the changes will bring about the best for everyone!
I am in agreement with JVH on the dealer vs. direct sales concept. From my vantage point, I have seen certain manufacturers trying to buy the market in response to their total lack of “industry” know-how and reality of the marketplace. These manufacturers’s always felt threatened and negative towards the dealer input. When a dealer would ask for a project discount they would merely take it as a negative rather than trying to understand the competitive marketplace and market support needs. “Oh the dealer is just trying to pad his bottom line” is a comment I have heard more than once! To often manufacturers have hired people from outside the world of parking who have then tried to apply principles not applicable to parking and its unique established method of business. I have been with manufacturers whose budgets are totally unrealistic and expectations for sales forces to comply – “you will wear this concrete necktie” comes back to mind from one of these managers who drastically revised a forecast made by 3 industry persons. A year later the annual sales were within 5% of the sales force budget, thereby leaving a short-fall in the manufacturer’s 40% of over. Rather than focusing on the issue, these people merely decided to go direct into the marketplace to increase the sales volume, forgetting that each balance sheet has two sides. In the end the move by these manufacturers to go direct and/or buy the dealer has some merit if and when it is done in conjunction with a dealer in a positive manner. To merely open shop as it would be and ignore a dealer infrastructure is a recipe for failure. The shock of this move shall be nothing as the shock to the manufacturer when they realize that the dealer indeed offered value has a tremendous operational cost. Failure to address this and fill void with their staff will only mean a drop in market share. Failure to see the operational costs will only produce higher direct sales but much lower profits. Typically this occurs when the manufacturer is persuaded by end-users and operators that the sale is contingent on providing those dealer services. Mergers, buy-outs and direct manufacturer presence have no solid track record. Dealers are basically individual entrepreneurs who will merely find another product and compete with even more vigor to hold and expand their market share. History, business connections, local market know-how and self-esteem are strong forces. Too strong of a force for even those manufacturers with big wallets and still no “parking industry suave”. My suggestion to them is to enjoy the “spotlight” – but get ready to make a corporate spin when you announce the closing or selling of these offices. This thought and prediction from a person with 32 years industry exposure from both sides of the border and “dealer/manufacturer” fence.