Keeping a lid on it

Dec 3, 2009

It’s old news that bright spots in the accessory market have been harder to come by in this current business climate.  And while no one restyling segment is recession-proof, America’s love affair with pickups does provide ample opportunity for product sales and installations for both retail and dealership clientele.

I spoke with a number of restylers about the hard-tonneau cover market and found some illuminating observations. Far from complaining, the shop owners, while reporting depressed sales, instead expressed confidence and enthusiasm for hard bed covers with an eye on the future and a tight grip on the steering wheel of today’s accessorizing challenges.

Auto Ad Onz

Todd Pietras, owner of Auto Ad Onz, Davison, Mich., offers candid observations regarding tonneau cover sales current and future.

“Things are a mess, but we are holding our ground, doing what it takesto survive.We have found that you can keep the same sales but it requires twice the work. The days of margin are over, but we try to add on as many ‘gravy’ items as possible.We aim to have the customer leave with everything they need.

“We ask the customer how our prices are and discuss what we can do to earn their business. We earn business by knowing the product, installing it on site and having floor displays for customers to come in and operate.”

When asked about how suppliers and manufacturers are assisting his business, again Pietras gives it straight:

“We are on our own.There are only a few suppliers that give extra help.But that’s OK. We don’t ask for handouts. There are a few manufacturers that understand what it takes to make customers happy, but the distributors are a little lost during these tough times.”

Johnson GT

Rick Box, owner of Johnson GT in Houston, reports lower numbers and several factors affecting his hard tonneau cover sales.

“Sales are down from their peak, but tonneau covers are paying the bills. We’re down from 400 to 250 covers a month. We’re seeing a lot more business in the existing truck market, although the majority of our tonneau sales are to paper-tagged trucks.

“Fleet work dried up in the fourth quarter of last year. Houston is an oil town, so in 2007 and the first eight months of 2008 with high oil prices, fleet business was booming.

“The majority of our tonneau cover buyers are in the 45-60 age group, probably because those people have more money and more credit.”

Dealership work has naturally been affected and Box has seen a loss of business in showrooms. His dealer clients are short on inventory and keeping the units they do have more factory equipped.

“We used to call them ‘pre-loads’ where we would put on a nerf bar, billet grille, grille guard, bed rug, tonneau cover, and that would sit on the showroom floor. They don’t do that anymore.”

Restylers continually face challenges and changes to their markets; it is the response and anticipation of these factors that leads to survival. Box notes, “We’ve definitely had to change. Everybody has to lower their costs – it starts with me, with my pay. We’ve taken out all the overtime. We’re shopping harder, made changes to credit card processing, insurance providers – we’ve done everything we can do. I think the market has bottomed out. I don’t see it coming back right now, but I don’t see us going any farther backwards.”

American Camper Shells

Sales at American Camper Shells, Stanton, Calif., are on par with other tonneau cover sellers. Owner Mark Gibbs isn’t having any fire sales, though.

“As far as pricing goes we’re not panicking or giving product away to make a sale. I do see that amongst some of our competitors.”

Labor is another front where Gibbs is holding the line. “Installation has been an additional sale for over 20 years. I’ve done a lot to communicate to our competitors that giving away labor is giving away profits. Some guys think they have to.”

Gibbs sees a developing market for hard-tonneau covers: “Interest in commercial and fleet work is increasing. There’s a trend where guys are downsizing from vans to trucks.  Fleets are looking at this because both types of vehicles have about the same cost going in, but resale trucks have broad appeal and higher resale value.”

When pressed on how he’ll move his business forward after the recession is conquered, Gibbs is frank: “Our business has changed forever. I don’t think the accessory business will ever recover to what it was before. I think the smarter business owners will diversify or scale back to smaller inventories reflecting the reduction in truck models.”

Everything Automotive

David Burke owner of Everything Automotive in Guelph, Ont., sees the hard-tonneau cover market just as his American restyling counterparts do.

“It is a tougher economy right now. We have to do our best when consumers come in to answer their questions, help them out, and do the proper service required to not only close the sale but make sure that the consumer is happy. I look at this economic down-swing as an opportunity to improve our customer service skills.”

Burke goes on to indicate his thoughts on the future of hard-tonneau sales.

“Regardless of market conditions, the bottom line is that there are people who need their pickup trucks to earn their living. They need accessories to help them do their jobs successfully, and, hopefully, some of the accessories that we sell will help them do that.

“The truck market, regardless of whatever manufacturing changes occur, will always be there; it is a big part of the North American marketplace. Trucks don’t just look good, they can be used.”

Lot O Fun Accessories and Caps

Doug Pientok, owner/principal of Lot O Fun Accessories and Caps in Schererville, Ind., reports that hard-tonneau covers are a staple product for his shop.

“Tonneau covers are the lifeblood of my business right now. Without the tonneau cover end of business, I don’t know if survival is possible. I wouldn’t say that tonneau cover sales are up – like most guys we are down 30% but the tonneau cover is the staple. The Internet has pressured prices downward. We have to conform to Internet pricing and provide the install and service on the back end.

“I’ve seen a lot more upfitting of trucks to make a living out of them, a lot more contractors coming in versus the brand-new pickup owner coming in with temporary tags ready to dress up their new truck. I’d say that a lot more retired fellows are coming in with new trucks, and a lot of contractors who are hustling for work are coming in for upfitting.

“The only reason I’ve stayed in this business is because I really believe that the pickup truck is the vehicle that is going to survive this. Of all the branding disappearing, I fully believe the Silverado, Ram and F150 are going to be around regardless of what happens in the industry.”

Relationships between restylers and tonneau cover manufacturers and wholesale distributors have also experienced pressure and change. Pientok feels this has positives and negatives for the restyling shop.

“Manufacturers have changed their culture completely. The ‘We’re all going to share in the wealth’ is gone. Everything has tightened; faces that were there are gone; relationships that were impossible in the past (e.g., buying direct from certain manufacturers) are now available.”

Discussing truck manufacturers, Pientok sees great hope for accessory shops. “I think when the smoke settles, Detroit is going to go back to producing vehicles. And I hope that means that they’ll spend a little less time on accessories – branding private label bed rugs, covers and such. I hope they go back to building trucks and the aftermarket jumps back into the front again on accessories.”

Also in line for change are Pientok’s product and service offerings: “I think that the shotgun approach to accessories is gone; it’s going to be a specialized situation.  When the economy improves it is going to benefit the shop with the very precise point in their market.”

Bel-Air Shells

Jeff Brown, sales manager at Bel-Air Shells in Garden Grove, Calif., keeps a positive attitude toward the hard-tonneau cover market. Bel-Air Shells’ 38 years of experience allows the firm to ride out market challenges.

“Business is off slightly but having an alternative to a fiberglass tonneau cover, such as the ABS plastic lid by Armor Lid, helps a lot; it allows us to have a nice cover for most trucks at a reasonable price. We have been doing business the same way for 38 years: Give the customer the best bang for their buck.

“We are seeing both the customer who is keeping their older truck and seeing the new trucks because dealers are offering such great deals. We don’t see much commercial fleet or government vehicles.”

Brown sees value in partnering with cover suppliers to result in better sales and profits.

“We work extremely hard with our vendors to get the best deal we can for a particular month, then discount the lids by installing at a discount rate or offer sales discounts. They are helping us with monthly discounts and specials and we always work on a C.O.D basis so we get the best price that we can.”

Trailer City

Lewis Terowsky, president of Trailer City in Commack, N.Y., has, like many of the restylers contacted for this article, found that as new truck sales have slumped, existing truck owners are picking up some of the accessory slack.

“People are adding accessories realizing that they are going to have to both work and play out of these trucks. People are looking to get more out of their vehicles.”

Regardless of the age of the truck that’s getting a tonneau cover, Terowsky believes in upselling.

“We always try to package accessories with hard covers; if we see a customer interested in a few different things, we work out a package deal on the fly. My BedRug sales have actually increased.”

Looking to the future, Terowsky sees opportunities for change in both the truck market and for the restyling business owner.

“Not having had a recession for a long period of time, you tend to get a little sloppy on certain aspects. This has made us rethink aspects of our business. Some aspects of accessories are going to go away and never come back. I think we will see a pickup truck owner as someone who primarily works out of the truck.”

Truck Gear SuperCenter

When discussing hard tonneau covers with Ron Towry, owner of the three-store Houston, Texas-based Truck Gear SuperCenter accessory shops as well as, he connects all accessories into a full picture to look at the health and future of restyling. Towry hasn’t sat by idle as the market challenges have put a squeeze on his business.

“Our total business is off 15%, but tonneau covers are more like 22% off. Our dealer business has increased as a percentage of total sales. I’ve created a specific marketing and sales process for my dealers, making it real easy for them to order accessories.

“I’ve always been very aggressive on packaging. On floor displays, I have package discounts presented. We push hard on upselling, so the real sale occurs as the deal is closing.”

But Towry does admit that change is always necessary, and he continually looks at what else he can do at his shops to increase sales: “I think I should be broader in my approach. We offer most truck accessories, but what I really should be into right now is wheels, tires and electronics.”

Towry’s background in tonneau cover manufacturing gives him a unique perspective now that he is a restyler. He’s a seen a number of downturns and he keeps his eyes on the far side of this downturn.

“I think it [the down economy] is going to change the entire automotive aftermarket. I have trepidation over the GM and Chrysler bankruptcies. I can take care of my customer, but if he doesn’t buy a truck, then I’m out a customer. I’m concerned about availability of the trucks and financing.

“The good guys have always come out of these downturns much, much stronger. When we have these long periods of growth, we get a lot of guys getting into the business that aren’t good at the business; they don’t take care of their customers or their pricing. All they really do is hurt our profitability. When they realize they can’t make any money and they close, then I get their customers. I’m looking for an improvement as we come out of this thing.”

Jordan Camper

In some instances, restylers are reporting increased hard-tonneau cover sales. Jeff Glover, owner of Jordan Camper in Midvale, Utah, is cautiously upbeat in his assessment.

“Tonneau cover sales are better than expected for us, given the current market. We are seeing a wider range of tonneaus sold, however: Retractables and hard tonneaus lead the way, but we are selling more soft tonneaus, as well.

“Most of our customers right now are coming to us with ‘good deal’ used, late-model trucks. The sales from dealerships have decreased significantly. Fleet sales remain steady. We have also seen customers replacing an old tonneau with a new one for the same truck.”

Glover reports that relationships with distributors are paying off in making sales.

“Distribution has offered deeper discounts on multiple-unit orders. Several suppliers have rebate offers, as well. Our exclusive fiberglass provider, A.R.E., offers a choice of rebates or coupons on their website that customers can bring in to the shop. This really has closed more deals for us than anything else.”

Consistent throughout discussion with restylers, change is cited as a major tool in surviving lean times and emerging ready for business as usual. Glover explains Jordan Camper’s approach:

“Our business and survival are directly related to trucks. As models change and possibly decrease, I think sales will follow. That being said, I don’t think the light truck is going away anytime soon. Trucks are who we are; we need them to do what we do.

“I think that when things turn around we will actually be stronger. We have lost competition in this market, and as things improve we expect new customers we didn’t have in the past. We constantly evaluate the way we do things; we have tried to stay aggressive in our market while running as lean as possible.”