Date: Thu, 19 Feb 2004 12:41:52 -0500
Reply-To: The Bus Depot <vanagon@BUSDEPOT.COM>
Sender: Vanagon Mailing List <vanagon@gerry.vanagon.com>
From: The Bus Depot <vanagon@BUSDEPOT.COM>
Subject: Re: R.I.P. 'Rocky Mountain' Motorworks
In-Reply-To: <BAY4-DAV118msssuhNg00076468@hotmail.com>
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> They were a great company to deal with. When you called
> there, you got a knowledgeable employee. And they made no
> excuses.......your parts went out THAT DAY. No paying extra,
> no expedition fees........just the way it was. They really,
> really knew what customer service was. They offered a
> lifetime warranty, which i took advantage of a few times.
> Prices were still competitive, too.
>
> Hopefully another company, or existing company for that
> matter, will follow their model of customer service.
Most of what you say is true. But while I respect their business model
from a consumer's standpoint, it was also part of their undoing. Like
too many other companies that ultimately fail, they overspent. With tons
of employees waiting by the phone for your call, or standing in the
warehouse waiting for your order, sure customer service is great. But at
the end of the week you have to pay all of those people even if sales
are slow. I gather that at one time they had roughly five times as many
employees as we did per dollar worth of parts sold. That's a lot of
payroll. Similarly, their "lifetime warranty" resulted in
floor-to-ceiling stacks of installed and returned parts that they had to
write off (some of which were not actually defective at all). Their
prices were as a rule significantly higher than ours, but still not
enough higher to fund their spending. Yes, there were other factors as
well (diversification into unprofitable categories, and to a lesser
extent a trademark infringement suit; it was ultimately settled). But
high overhead had a lot to do with it. You can offer your customers the
moon if you throw enough money at it, but in the end it all comes down
to one thing - you have to spend less money than you make. Rocky
Mountain ultimately failed this test.
It's a tough economy right now, and the spiraling U.S. dollar isn't
helping when it comes to imported parts. (Yesterday the U.S. dollar
reached all-time lows against the Euro, not a good sign when it comes to
the future of VW parts pricing.) Motorworks was not the first to fall
and probably won't be the last. If you leaf through a VW Trends magazine
from a year or two ago, most of the biggest advertisers are gone now.
Even the big auto parts chains are feeling the crunch; Pep Boys closed
about 40 stores and laid off 1000 people last year. In times like this,
the lean survive. You have to be realistic about how much you can spend,
or you'll end up with a bloated infrastructure that can't survive a
prolonged economic downturn. Sometimes you just have to say, "yes it
would be nice to offer that, but we can't afford it," and instead look
for alternatives that will get you close for less (such as improving
efficiencies instead of adding manpower). The ones who stay lean, and
make those tough choices, will be the ones who are still here to supply
you with your VW parts a year or two from now. (As for us, we had our
best year ever in 2003, so we're sticking around. :-)
- Ron Salmon
The Bus Depot, Inc.
www.busdepot.com
(215) 234-VWVW
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