Can somebody tell me how dropping the price is going to be more profitable.I have heard and seen all kinds of strategys to clean up,but come on.They seem like they are following some bad business plans that have failed before.I can already see it,tight with ins,suppliers,networks.I think we have heard this before.I am not ripping on them,but I would like to know how they delt with this over seas?Please tell me whatever you guys know.Thanks

If you do the math, lets say you install 10 windshields at 100 shops per day (average) your expenses per job are (lets just grab a number) $165.00 and you sell that job at $185.00 (again just a number) thats $20.00 profit times 1000 installs equals $20000.00 a day times 260 working days equals five million plus in profits. Big numbers only take small percentiges to turn into big profits. Hard to compete when the small shops are doing 2 or 3 jobs average at the same figures. $15000.00 per year profit. The way for them to have even bigger profits is buying power lowering their costs.

WOW!!!I never looked at that angle.thanks

What do you guys think this will do to us little guys?Is it going to even be possible to get a job or is it going to be even harder now that belron is here?thanks

If Mr. Lubner and Belron have no faith in the NAGS system then who does and why are we still following them?

How do they price glass in Europe?

It still never makes sense to do more work for less money. The only people who think this works havent been paying attention. I believe the people at DT finally woke up and realize that competing on price is just a way to lose money faster, a race to the bottom if you will.

Dont be so in awe of Belron. They havent done anything yet, but spend a lot of money.

I was rather impressed with Lubner's comments. Frankly, unless we didn't see all of them, I wonder why he felt he was going to tick people off with them.

Some observations of mine, that are based on some specualtion more than hard facts:

Belron is about to compete in a market that they don't have control of, at least not going in. That's going to be a new twist for them. They've always had that control, and the branding Lubner speaks of seemed to come from the fact that they were always a major player amongst very few small players. Quite a difference in America, I think. Could be why he thinks this is the toughest market he's seen.

Belron has had a reputation for quality in any market it's been in. I don't think anyone could/should contest that. If 'rumors' he speaks of in his speech are of Belron's low quality have any truth what so ever, I would expect that will change quickly.

Belron hasn't had any reputation for being stupid. I don't look for them to be selling below cost like some others. As Lubner commented, but seemingly wasn't widely known, their brief relationship with Safelite ended because they didn't have the control to change things, and (here we go again...) the rumor was that they just couldn't put up with Safelite's stupid sales tactics of losing a dime on every widget but trying to make up for the loss by selling more widgets, though still at the dime per piece loss. Don't look for Belron to be stupid. Competitive, leveraged buying power and supply, yes. Sell below cost?.....no.

My prediction: Belron is about to enter what they believe will be a majority cash market very soon. By branding quality and service at competitive pricing, they hope to win on those fronts, not by being the lowest price out there.

So take note, Belron is about to emulate what the small independent has known all along, that quality and service make more long term sense than cheap lick em and stick em installations that risk high liability. And they're about to try it on a national level. The question is, can they maintain that high level of quality and service in the American market, a market distinctly different than any one they've ever been in?

Obviously, Lubner thinks so. Expect the bar on quality to be raised. A good thing for all of us.

One thing did surprise me, I thought Belron was bigger...sales-wise. I really thought the $1.6B is sales was a lot more, globally.

You folks are in awe of BELRON? You have to be kidding, right? These are the same folks that had their lunch handed to them by the U.S. market not that long ago...losing about half a billion dollars. Hell, their fiasco here was a financial calamity for its parent at the time; forcing it to sell BELRON at what some would call bargain basement prices.

And please don't be awed by their success elsewhere in the world. Many countries lack the anti-trust/collusion laws that would have prevented them from doing some of the "successful" things they have done elsewhere.

Worried about BELRON, now I have heard everything!!

I am not in awe of anybody.I like to ask questions and listen,Its a good way to learn things.I just like to see what kind of speculations are out there.I dont see anything special.Keep them coming!

In my area they bought a company and have had bottom prices for almost a year now.Whats stuiped I think is there is not alot of compition in the area and there still doing it.There is only a few shops around, that do more flat glass than anything.I know only one shop that is aggresive but he is only a 2 man shop,maybe because he has hardly overhead he is a threat?Shine some light on this please.Is it just certain stores?Ego's?

Mark1...Number one, it's illegal in most if not all states to sell below cost. Number two, all Belron has done after acquiring AGS is chop cash prices incredibly far, which as you and many others already know, will drive insurance payments lower and lower.

Glassgod,you are dealing with the same thing as I am.Are they trying to wreck the ins industry?Whats the point.They are loosing alot of respect fast from all kinds of people,including ins agents,body shops ect.

I have picked up some ins agents and body shops since they bought ags and dropped thier prices.I will take it.

THEY CAN'T OUT SERVE USE BECAUSE THEY DON'T CARE ABOUT SERVICE JUST DOING THE JOB. TAKE CARE OF YOUR
ACOUNTS AND WE WILL BE FINE SERVICE KEEP OVER HEAD DOWN AND OFFER FAST SERVICE

Belron is a $5 billion company. They do 1.4b in glass work but the rest of their money is from distribution.

D'Ieteren, Belron's parent, may do about five billion (U.S.), but Belron does about $1.3 billion.

Some of you have to stop "filling in" knowledge gaps with "stuff" someone has made up.

Mark1 was not saying Belron is selling at below cost now. I believe he was saying their former partner, SGC, was and is. Some companies just look at UNITS not price.
We all have our own pricing. What you buy the part for has or should have a lot to do with what you are selling it for. We all have our own markets and strategy. We will not always agree. Yet we must all find a way to work together.
Happy Friday by the way!

Since Belron aquired TCGI (speedy) in Canada cash prices have gone up on average 80.00 per job.

That'd be nice if it had any relevance in the States...

Guys, we have got to get it together! Read what the man said. We helped create this mess.We allowed quality to become less important than price. It is true we do we give the customer off the street you might see once in five or ten years a better price compared to an insurance company who use to give the industry millions. How happy would we be if the guy who bought one w/s a month paid $100.00 less than us who buy 50-100 w/s. Our problem here is we have no leader of the industry. If prices have went up $80+ in Canada, that can't be so bad!

WHAT DO YOU THING ABOUT IF WE STARTED A GLASS COOP TOGETHER TO HAVE SOME BUYING POWER AS A BIGGER GROUP
AND WILL BE ABLE TO SERVICE ACROSS THE US. AND GET PAYED FOR GOOD WORK. US SMALL SHOP NEED TO WORK TOGETHER LET ME KNOW WHAT YOU THINK .WE HAVE SHOPS
THAT CLOSE CUT ,DON'T PRIME AND DO R & I FOR 75.00 WITH KIT STUIPED I THINK IF YOU BUY FOR LESS WOULDN'T
YOU SELL FOR THE SAME AS EVERYBODY ELSE AND MAKE MORE
I WOULD LOVE THAT .

gene,I wish we could!There are alot of hidden laws about that.It has been tried to group up,but there was trouble.A handful of shops tried this at one time(it was very discreet as they did not want some persons to know)but they were warned by the court systems.I would like to think there are ways around this,if there is please let us know.thanks ind shops.

Welcome to supply chain inconsistancy. Because of the state of the market, a coop would likely save you less than the attorney would charge to make sure you didn't violate antitrust laws.

DL are you telling me if i approached you representing several local glass shops with cash in hand you would be unable to sell me glass at truckload prices, i might be mistaken aoubt the existence of truckload pricing these days.

i would almost bet somebody in this market would give us a deal, and if we consistently were able to purchase say 3 to 4 truckloads a year, this wouldn't improve our purchasing power?

i know the manufacturers are looking for people who will commit to a certain number of truck loads per year, i would guess a smaller warehouse distributor (wannabe size) would welcome a chance to be able to increase his commitment to a manufacturer, in turn allowing him to increase his purchasing power.

of course this is purely theoretical, i just don't understand all the legal problems of people pooling together to improve their purchasing power. We used to do this, as you probably know, although we could never get enough numbers together for a complete truck load.

probably the hardest part would be finding guys with enough cash, and storage facitlities to purchase those quantities. it would simplify things if we could go back to the days of the common movers, 848, 1005,,,you know ha ha.

I'm saying that the savings you would gain by purchasing 3 or 4 truckloads a year would be virtually zero. if you are negotiating properly now, you should be able to get pretty close to the same price by buying 8 or so of a part number, without the headache.

Change the numbers to 3 or 4 hundred truckloads per year and you would do ok, but quite a bit of your savings would go back into maintaining and administering the coop.

The small guys are buying closer to the big guys on the majority of product than at any time in the industry. I've been at all levels of the industry and know this is true from experience.

The answer isn't going to be found in buying better, its in how you market and sell it.

thanks dl,

i have an older frame of reference.

i knew everybody's margins were narrowing, but i figured for volumn buyers there was a bigger gap.

when we did this in the past, it was just a few guys getting together. it wasn't no offical thing that we tried to run as a coop, but i could see where trying to do things officially, would eat up the savings.

Every year, the buy gap between the small player and the large player gets smaller. That is one of the MAIN reasons the industry is "profit challenged", you don't have to be a successful business to get a top shelf price.....and many of those that get that price use it to drive the market lower, even though it will eventually kill them.

Blame in on national wholesalers and irresponsible regionals that are so desparate to buy share, they drop their pants to someone who should be flipping burgers...who promptly gives it to cash customer and makes a net zero gain from his good fortune. Blame it on the sales rep that uses "competitve situation" to open an account up that shouldn't be in business, and usually doesn't stay there; but leaves a legacy of a trashed market price.

Good negotiation and a strong business should mean more than it does on the supply side. If it did, the market would become more stable. If you want to make more, sell stuff for more. Start at $5 per job and move up. If you can't get $5 more than your competiton on a $200 invoice, you either aren't as good as they are, or need to hire someone that knows how to sell (or get better at it). When the cash market goes up, so will the insurance market.

So now it is the fault of the distributors...never looked at it that way.

There's a little truth in everything.

When I started in this business in the NY market ( a LONG time ago), in order to buy auto glass from a distributor you had to have:

A shop
A cutting table ( flat laminated was big then)
A stock of glass
A glass polishing machine

The distributors would not sell to a "gypsy" operating out of a truck.

Back in those days, glass shop owners were businessmen, not "men with a business"

Nowadays, in the search for profits, the distributors cannot afford to be as principled as they once were and the industry suffers for it.

ira,

i'm not so sure i don't agree with your statement.

i have a feeling that principles missing, is kind of a statement of society in general, especially after a money loosing episode i had recently with a couple "reputable suppliers".

Hello,

What you guys all need to do is just get focused, and do not worry about what anyone is doing, but yourself. If belron buys a shop in my town i will not operate any differently i have had the same pricing structure on cash for years, it works, i have luckily some of the best techs in st. louis, and we do our thing and we do not ask / care what any shop is doing. Quality, consistancy , pricing speaks for its self. I have no idea what anyone charges in my town for anything, and i do not really care. When my phone rings and i do not close the sale then i will start worrying about what the "Person Down The Street" are up to. Till then I will keep my tunnel vision, and not pay attention to anyone. And come on safelite can you run more ads during law and order your killing me :)

DL : Congrats on new job i miss harrising you :) shoulda stayed! Drop me an email so i can get your # and harrass you like old times