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Survey: More jobber consolidation ahead

The charts above illustrate what our readers believe will happen in the jobber industry in terms of consolidation. The chart on the left shows what's expected before the end of 2017. The chart on the right shows the same thing, but over the next five years. While some readers don't think we'll see much in the way of consolidation this year, nearly everyone surveyed thinks we'll see more consolidation within five years.

By Mike Davey

Hamilton, Ontario — October 3, 2017 — We can expect to see more consolidation in the jobber sector before the end of 2017, if the readers who responded to Collision Repair magazine’s latest poll are correct. The majority, 68 percent, believe the jobber business will undergo further consolidation before the year is out. An even larger percentage, 91 percent, believe we’ll see more consolidation in the sector sometime over the next five years.

Collision Repair magazine runs new surveys every week. Our next survey looks at the practice of providing free estimates. Should this continue, or should shops try to recoup some of their costs? Take the survey at this link and let us know what you think.

While the majority of survey respondents expect to see more jobbers acquired by larger concerns by the end of 2017, there is a significant number (24 percent) who said they were unsure. This is a very large percentage compared to those who indicated that we wouldn’t see more consolidation in this period (8 percent). Considering the same question over five years, however, leads to very different answers. In that case, only 5 percent were unsure, with just 4 percent saying that we wouldn’t see more jobber consolidation.

Part of the reasoning behind most mergers and acquisitions is that a larger organization can leverage economies of scale and offer a better price or more service. Given that the relationship between jobber and shop is often very involved and personal, we asked our survey respondents to let us know if they would be willing to switch jobbers if they were offered a better price or better service.

Offering a better price is attractive to 44 percent of respondents. However, 27 percent indicated that better prices would not convince them to switch. A full 29 percent of respondents say they were unsure.

Looking at service, the picture is similar, with 51 percent saying they would switch, 21 percent saying they would not, and 28 percent indicating that they were unsure.

The comments left on these questions help to illuminate the answers. As always, these are presented anonymously, with only minimal editing from us.

Regarding price:

“Yes, but not if the service, knowledge and training were less than our current jobber. It is just as important, if not more important, than price.”

“Service is most important.”

“We already deal with a more expensive jobber, simply because they offer a superior customer experience.”

Regarding service:

“Perhaps if it meant leaving an out-of-town jobber for someone more local.”

Finally, we asked if more jobber consolidation would have a positive or a negative impact on the collision repair industry.

The majority of survey respondents (57 percent) believe it will have a negative impact. A further 23 percent say the impact will be positive. Those who are not sure make up the final 20 percent.

This is another case where the comments say more than the raw numbers ever could:

“We are losing personal service, knowledge, training, etc. With big corporations you are just a number.”

“Good competition keeps an honest environment.”

“Both good and bad. The bigger chains may lead to better buying power, pricing and access to products and tools not available before. But there will always be a trade off when those smaller local businesses aren’t small and local anymore.”

Collision Repair magazine’s next survey looks at the practice of providing free estimates and asks if it may be time to change. You can participate in that survey at this link, and make sure to watch for the results next Wednesday on collisionrepairmag.com!

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