Equipment Notebook: Oct. 2000, SUPPLY OUTLOOK: The Aftermarket Alternative

Those who shop around for equipment parts are finding convenience and availability in an alternative supply source. Contractors and repair shop owners who look beyond original equipment manufacturers and dealers for supplies can fill inventory shelves with aftermarket parts, stocking their warehouse without stripping their budget.

End-users who need supplies in a hurry will not be left empty-handed, as the aftermarket offers a range of supplies from simple parts like filters to complex components like engines.

This supply source also sets up a system of checks and balances, in a sense. Dealers might reconsider their steep product prices when a competitor offers the same part for 30 percent less. And price is a secondary advantage compared to supply volume, efficient delivery and parts variety the aftermarket delivers to customers, noted Jeff Golota, president, J. Thomas Distributors, Walled Lake, Mich. Product selection runs the gamut.

"I like to use the term of providing products that function the same as the original equipment manufacturer (OEM) part," he said. "We provide another outlet to purchase parts besides the OEM, which means lower pricing, product improvement and innovation."FILLING TALL ORDERS. Generally, contractors work within a narrow window when waiting for parts, so easy access is crucial. Convenient ordering and speedy delivery are essential qualities for suppliers, and are benefits the aftermarket offers customers, Golota said.

"We publish a catalogue so the product is there right in front of the contractor," he explained. "They can call an 800 number, order through a Web site—there’s time-savings issues where contractors don’t have to stand in line at a dealer and waste an hour at the repair facility."

Minimal delivery turn-around time rushes products to contractors and repair shops because parts are shipped the same day they are ordered, Golota noted. A large inventory and on-site, industrial machines to produce parts allow J. Thomas Distributors to fill orders in a hurry.

Selection continues to expand as the aftermarket grows in popularity, added Mike Febbie, sales manager, Landscapers Supply, Spring Valley, N.Y. Its 220-page catalogue features more than 5,000 line items from nuts and bolts to 61-inch motors. The company watches industry trends to determine catalogue additions that might interest end-users, he said.

"We’re trying to be as much as we can to the commercial user, and every year we try to expand," he explained, noting an increase in hydraulic parts available.

Constant upgrading is a supplier asset that contractors with many machines value. Joe Loyet, president, Loyet Landscape Maintenance, St. Louis, Mo., said the amount of equipment his company operates justifies why 90 percent of his replacement parts come from the aftermarket. His fleet demands supplies on a daily basis, and to fill this constant parts need, Loyet orders in quantity.

"Every day we see things go wrong, and we can’t afford to have someone run around picking up parts," he added. "So the high-demand parts—belts, bearings, throttle cables—we will buy a whole bunch of."

Price and availability win Loyet’s loyalty to the aftermarket. It’s unusual for him to turn to local dealers for parts, and they know it, he remarked. "If we need something really hot and rare, the aftermarket will overnight it so it’s here by 10 a.m."

The 30 percent savings Loyet trims from his parts budget is passed on to his customers, he said.

"We usually have the better prices because our cost structures are different from the OEM," Golota noted. "Dealers don’t manufacture belts, tires or bearings—they buy all of these outside component parts anyway, especially the engines. The aftermarket doesn’t go through the same distribution channel, so that’s where the cost savings are—in the supply chain."

Febbie echoed these cost benefits. "You can sell the parts for a reduced price and offer top quality—in many cases the parts are identical," he noted.

Beyond quality and cost considerations, aftermarket parts are a one-stop shopping avenue, which appeals to customers, added Jon Vyn, director of equipment marketing, LESCO, Rocky River, Ohio. The nature of LESCO’s outlets allows customers who purchase fertilizers and seed to pick up parts while they are at the facility, he said. Again, convenience often dictates the aftermarket’s allure.

"We are in the user’s daily traffic pattern, and part of what we aim to do is provide contractors with a good value on the things that they commonly use—the consumables," he explained.

Product availability rarely presents a problem for aftermarket companies that serve an extensive geographic region, Golota added. Seventy percent of the components contractors request are filled through the aftermarket, with only 30 percent forwarded to dealers or OEMs.

PLENTY OF PARTS. The quality and variety of parts aftermarket suppliers offer continuously is improving. The aftermarket can identify common failures on OEM parts and enhance their version of the part by tweaking problem areas.

Also, contractors can locate products that support older equipment and find supplies that dealers might not carry, such as zero fault tires, which eliminate flats on machines, Golota pointed out.

"I have pretty large contractors where the buyers will call me to see if we are going to produce aftermarket parts for a piece of equipment before they even make the purchase," he noted.

Quality-driven product development also explains the aftermarket's growing popularity, Vyn commented.

"I think the market has demanded quality—aftermarket parts can’t be second tier compared to the OEM parts," he said. "Aftermarket parts have really closed the gap as far as quality."

However, there are cases where the aftermarket can’t serve equipment needs and contractors turn to dealers to fill parts requirements, Golota noted.

"If the item is still covered under warranty, where there are major failures on the OEM design and the customer should go back to the OEM and get the product if it is still covered under warranty," he recommended.

NUDGING A NICHE. Though some contractors alter buying habits after discovering savings and convenience in aftermarket parts, others are loyal to local dealerships.

"You have people in both camps," Vyn observed. "There’s always going to be a place for the OEM supplier because there are some who favor this supplier and there is a warranty hook that’s there."

Febbie added that dealers attend to necessary repair needs. "The dealer offers one thing that we cannot do, and traditionally, that’s service."

As the lawn and landscape industry flourishes, the need for equipment and parts to service contractors’ fleets also will augment, Golota added. "It seems like we turn people on to the aftermarket one customer at a time," Golota mentioned.

"In terms of the market, it is growing," he added. "The industry is growing. There is so much more commercial equipment being sold, so it is a natural progression of the amount of equipment out there, and the components will follow."

October 2000
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