I, Rebate

Rebates on parts are an accepted part of life for every garage. What do businesses actually think of them though, and does a rebate influence where parts are being bought?

Published:  24 January, 2020

It's a typical scenario for a garage. You have been buying parts and consumables from your factor of choice through the weeks, months and years. In that time, as you spend you are also accruing points on their rebate scheme. Eventually you have enough to get something really handy for the business, or just some nice stuff for you and the team. This can be a nice bit of extra income that can be invested back in the garage, or it can be something to splurge-spend on spurious fripperies.

Have you ever asked yourself what you really think of this though? Is it something you get in other areas of your life, major supermarkets aside? Probably not. Is it influencing your buying habits or reinforcing existing loyalties? Would you just prefer lower prices from your favourite factor?

We thought we would ask a few garages around the country how they use rebates, and if they affect their attitudes to their suppliers. 


Relationships
2017 Top Technician winner Karl Weaver is co-owner at Bull Lane Garage, in Boughton-under-Blean in Kent. He said: "TPS in Canterbury supply our genuine Volkswagen – Audi Group parts. We do get rebates every so often. I don't know exactly how much we have to spend to get them, but every couple of months we get credit from them. We normally use it on consumables, so it does come in handy. I don't know whether our spend is getting bigger, or if the system is getting better, but it seems to be increasing. If you buy a turbo charger that costs £1,500 then you get quite a nice rebate with that. You can't just knock it off the invoice for that, but you can use it on another invoice. I generally use them for consumables because they supply Quantum. We just spend it on that and stock up on screenwash and other bits and bobs."

Karl went on to explain how the garage spreads its parts spend: "We use lots of factors and suppliers. For aftermarket parts we mainly use two. We use a small factor in Canterbury that we have used for years. That is our main supplier, and we use Euro Car Parts as our second one. We try to use them to our advantage, so if we can get a certain brand that we like to fit at a very good price there, we will get it. On that basis it works in our favour. I won't switch over to using them entirely.

"ECP do rebates on and off, there are all different ones. I don't know what is running at the moment. The last two years they have had pretty good ones. Come Christmas we will have a fair amount to spend with them and a catalogue of stuff you can choose from. They have stopped that now though and apparently they are doing something different. To be honest I have trouble finding the time to stay on top of these things. I just managed to order some stuff at the eleventh hour."

That sounds fair enough when you are busy running a business. For Karl, the rebate is a nice-to-have and also convenient, but isn't the focus.  If he did have time though, would he change factor to chase the rebate?

"I wouldn't do anything to change our long-standing relationship with certain companies. If they do offer something, then great, but I stick to the same spend pattern. Certain parts we buy from one, certain parts we buy from the other. I wouldn't suddenly go 'Oh look they are running a promotion, let's put everything through them'.

"As nice as it would be for us to get some money back on something, I am a great believer in loyalty as well. I wouldn't suddenly take a swerve away from the small company just because they don't do rebates. As I said though, we do try to use it as much to our advantage as possible, while being fair with the other suppliers."

Karl added: "As for buying genuine parts, we have to buy those from whoever the relevant local franchised dealer is. Where we are starting to do more VAG, TPS is always going to have the biggest spend. For one, they cover four brands. Secondly, these are the vehicles we predominantly work on."

Motivation
Top Garage 2019 finalist St Andrews Services is based in Whetstone, Leicestershire. We asked co-owner Kevin Porter if getting rebates influences their parts buying patterns: "There are a couple of places where in the past we have certainly used rebates. We use the rebates against training as well, which I think is a really good idea. We are getting something back from buying something with a company, which gives you motivation to spend with that company. We can pursue and move our business forward with training for us as well as our up-and-coming apprentices, moving them onto the more modern technology as well."

We asked who they used: "The three main factors I use on a day-to-day basis are Euro Car Parts, Andrew Page, and a local business as well – Blaby Motor Spares. I think it is important for smaller businesses to support each other. "

Would they change factor if a particular factor was doing very good rebates? Or is it more of a case of if it comes their way, they are pleased?

"In the past," observed Kevin, "Andrew Page used to run a promotional push running up to Christmas usually – a points-win-prizes scenario. That's nice around Christmas as it gives the guys a bit of an incentive and a reward for what they have done, and again it has no financial impact on me other than the fact that I have to buy the parts anyway. That is another area that is a bonus for me and a positive situation."

Kevin added: "It is a brilliant add-on and obviously it works well because there are elements that through certain times of the year I wouldn't purchase, but if there is an incentive to buy, then we put them in stock."

In the loop
Huddersfield-based Five-Star Auto Centre was also a finalist in Top Garage 2019. Commenting on rebates and how they balance their various suppliers, owner Asif Ali said: "We use a number of different factors. We use Euro Car Parts, TPS, GSF, and our local factor, A-Z Motor Spares.

"The rebate is pretty good for us in terms of what we buy TPS. In hindsight, just recently, we had a pretty big rebate, in cash. With that rebate, we bought some tooling. That was pretty good for us. It was very good because we specialise in the VAG range ourselves To be honest with you, the rebate in that situation was worth its weight in gold."

We asked Asif whether the rebate was a must for them, or just an extra: "It is a pleasant add-on for us.  The main issue for us is making sure that the part is right first time. A rebate is pretty good though as it keeps you in the loop. It is an added bonus. So, if a factor we don't normally use was doing a really good rebate we wouldn't  change over."

Apart from cash that could be spent on tooling, we asked if the garage had gotten any other really good rebates: "In terms of Euro Car Parts, there was one good one a few years ago where we got tickets to the 2017 British Grand Prix at Silverstone. That included hotels over the weekend as well. It was brilliant!"

We have to say, this really was worth having. Euro Car Parts took the press to that too, but on the Friday when there's no actual racing. Don't get us wrong, Aftermarket had a great time, but ECP's actual customers got to see the actual race. This was clearly an example of where the hard power of the spend and the resulting rebate trumps the soft power of the supposed Fourth Estate. That is the press to you and me.

Investment  
MOT City is based in Winnersh just outside Wokingham in Berkshire. Commenting on where the business buys parts, and this view on rebates, owner Sean Bradbury said: "We mainly use Euro Car Parts. There used to be an Andrew Page branch but that's been shut down. So it is either ECP or the dealer. Now and again we have got some back-up, when Euro Car Parts haven't got it.
"We are the best customer at our local Euro Car Parts branch, we are spending a significant amount each month with them. The rebate does not really affect our buying. It is a bonus. We achieve our spend every month and suddenly you have a major reward in the form of the rebate."

Investment is the name of the game for Sean: "We have used the rebate on diagnostic equipment. We bought an Autologic device from it for example. They keep changing it though. I think now you can buy televisions and microwaves and go on holiday, and all that nonsense, but I am not interested in any of that. I will buy something that earns me money, like diagnostic equipment. If there is a particular tool we want we will get it. We just bought a tool by Launch, another piece of diagnostic equipment. Here is some money – we buy the tool and that's it.

"I'll use the money to invest. I'm obsessed with investing. If I go on holiday, that's nothing to do with work."

If another factor was offering a better rebate, would that influence Sean? "No," he replied emphatically. “If I'm honest. These bonus schemes, where you can buy a new home appliance, would not make any difference to me.”

On his favourite factor, Sean said: "Euro Car Parts, on the whole, are a brilliant company. You have to keep your eye on them, but generally they are good. They've got it sewn up, they deal with the big manufacturers, generally they are the market leader.
"With regards to the monthly spend target, some months you will be thinking 'are we going to get there?' Then it gets nearer to the end of the month, and if we are a mile away I will say 'don't worry about it'. If we are on the last day, and just short of the target spend, the minimum bonus is actually worth a lot, so I will buy a barrel of oil or something else I am going to need. I won't chase it unless it is there and I need to buy something. I believe TPS are doing a similar thing. It does not sway me though. I need parts, good quality, as quickly as possible, end of story.  That is all we are worried about.“

Sean added: "Rebates are a good add-on. If another factor was operating a rebate similar to the Euro Car Parts one, but their service was rubbish, I'm not interested. I tell them so as well. If you've got a car on a ramp and you've got a mechanic standing around waiting for bits, that's not the way to run a business. If I have to wait an extra hour for parts, but I get extra points towards buying something pointless, that's not for me."

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