June 21, 2018 http://www.GeneralAviationNews.com — facebook.com/ganews 9When I got out of college in 1967 and
started work, most companies were run
by technical people who supported re-
search and development.
In the lab we were allowed a lot of lati-
tude to work on related projects that may
not have an immediate payout.
This lasted for a few years, but with
the change in economy, many compa-
nies started to shift more and more to the
“Business School” model. If it had settled
to a happy medium that would be good,
but that did not happen. The business-
types took over more and more compa-
nies. This resulted in the near failure of
several car companies and others.
Some companies have shifted back,
but the general rule in the business world
today is that the bottom line is the only
concern. This has hit the general aviation
world in many ways.
It has hit us especially in the lack of
new technology and new products. I
know there is that liability problem, but
that does not explain all of the problems.
The latest scheme is the super jobber
or distributor. In the past, a manufacturer
would sell their product to a network of
distributors or jobbers, who would then
sell the product to the end user.
The new scheme is the manufacturer
sells only to one or more super jobbers
or distributors who then sell the product
to the regular jobbers or distributors, who
then sell to the end user.
There are several advantages of this
scheme for the manufacturer. The first is a
reduced sales force. With the old system,
the manufacturer needed enough sales
personnel to call on and provide service
for all of their distributor and jobbers.
In the new system, companies can re-
duce their sales force since they only need
to call on one or more super jobbers.
In the old system, the distributor and
jobbers developed a relationship with
their sales person, who would help them
if they had a sales or technical problem.
These may not sound like a huge savings,
but if a company can reduce their sales
force and technical personnel by a fewpeople, it means a significant savings.
The second advantage for the compa-
nies is reduced inventory. Every manager
gets a monthly report, and inventory is
a fixed cost that goes against the bottom
line. If the super jobber and distributors
carry much of the inventory, it improves
the manager’s bottom line.
The other big winner is the super dis-
tributor and jobber. They get to add a han-
dling fee for all products and have closer
contact with the factory. They also have
a huge competitive advantage in the mar-
ketplace because of their reduced costs
and direct factory support compared to
the regular jobbers and distributors.
So what is the down side to this scheme
and who is the big loser? The big negativeis that all products will carry a surcharge,
which means that the cost will be passed
on to all of us. An additional negative is
the reduced competitive nature of the gen-
eral aviation business.
There is also a reduction in the techni-
cal information pathway and increased
delays in getting deliveries.
The other big losers are the regular job-
bers and distributors who must pass on the
increased costs and now have less direct
information and sales path to the factory.
This marketing scheme is hitting all
industries from automobiles to GA. The
problem is that the GA community is
small and these increases in cost and de-
creases in service are a significant nega-
tive.Concern for the bottom line hurts GA
Visser’s Voice
Ben Visser
Ben Visser is an aviation fuels and
lubricants expert who spent 33 years with
Shell Oil. He has been a private pilot since
- You can contact him at
[email protected].