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February 2004

So You Want To Sell Pizza?

Many years ago in the auto salvage industry, there were the guys who handled import cars and the other guys who handled domestic cars.

This is not a joke. If you handled import cars as an auto recycler in the mid-eighties, you were considered “different” and few in the industry wanted to talk to you. By the nineties, however, that notion disappeared, and it’s obviously not the case today.

As the times changed, profit margins declined in domestic parts. More recyclers came into the business. Margins dropped further. (Today, margins are continuing to drop for all products.)

That information sets the stage for a hypothetical story, but one that is close to true.

“My neighbor sees that I’m in the auto wrecking business. He owns a pizza shop. He sees that I’m driving a brand new Mercedes. He’s driving a Chevy. First thing I know, he’s driving a new BMW.

“He knows I’m driving a brand new Mercedes, so he decides to open up a recycling yard. I see that he’s driving a brand new BMW; so I decide to open a pizza shop.

“Before you know it, we’re both broke.

“Why?

“We both stepped out of what we knew first, out of what we did well and drifted away from our core product. And, we drifted from our core business. (See last month’s article.) The import wreckers started doing domestics, and the domestic wreckers starting doing imports. (Today, there is very little distinction, and most are made in the U.S. anyway.)”

The moral of the story is not to let your competition drive your future. Not all your competitors are in the same business as you.

Always try to differentiate yourself with a different product, service, prices, quality, etc. And remember, perception is reality. You only have to convince the customer you are different. We all know a used alternator is probably a used alternator, regardless of where you get it. But if yours carries a lifetime warranty…now you are on to something.

If you really want to compete, stay with what you know and do best. Let your competitor change if he can’t stand it. But you should stay focused on what you are doing and get better at it. He’ll never be able to touch you, let alone keep up with you. The grass is often greenest on the inside of the fence.

 

Don’t forget to subscribe to my free monthly auto recycling e-newsletter, with news and tips, register at www.autosalvageconsultant.com.

Next month: More good stuff from Chapter 5 of “Salvaging Millions”.
Remember, only you can make BUSINESS GREAT!

Ron Sturgeon is past owner of AAA Small Car World. In 1999, he sold his six Texas locations, with 140 employees, to Greenleaf. In 2001, he founded North Texas Insurance Auction, which he sold to Copart in 2002. In 2002, his book “Salvaging Millions” was published to help small business owners achieve significant success, and was recently reprinted. In June 2003, he joined the new ownership and management team of GreenLeaf. He also manages his real estate holdings and investments. You can learn more about him at WWW.autosalvageconsultant.com He can be reached at 5940 Eden, Haltom City, TX 76117, (best) rons@rdsinvestments.com or 817-834-3625 ext 6#.


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