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AESIF News - Happy New Year

Happy New Year - 01 January 2013

What an end to 2012 with all the gale force winds, floods, and driving rain.

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Sorry but its a bit past servicing!

 


 

Will 2013 be the savvier for the gate automation industry?  “2013 possible lucky for some”

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I did mention some time ago that the Midlands, East Midlands, and Yorkshire have been worse affected with slow business. Well it’s taken business link for the midlands and the training opportunities’ programme two months to catch up and admit it. The problem is, it’s now going to be very bad and disaster- us, if help is not short coming for the building industry.

The loss of jobs for the building apprenticeship scheme’s includes Electricians, Joiners, plumbers, ground workers, decorators and will be as high as sixteen thousand five hundred lost places within the industry over the next two years for the East Midlands, not to mention the loss off work for trades men already employed, and the allied trades that supply the building industry. Unemployment costs for the regions could be as high as 2.5 billion over the next three years to 2016, now instead of putting these taxpayers out of work the government should be helping to provide for long term support to the building industry. After all it’s got to be better than paying out unemployment and the real possibility of losing skilled trades men that are hard to find.

So what’s install for our gate door and barrier Industry in 2013!

What’s the outlook for future business retail, and the gate installer around the country! I’m afraid bleak is the right phrase and abysmal, if we don’t get a grip and look after the installers that genuinely support product brand, their distributor, and the industry. The internet will I am a feared be the undoing for all; the price of automation kits available to all have finally striped away any profitability for installers to supply and fit. The top brand automation kits Came, nice, bft, are now all available on the internet and selling for in some cases £20.00 above net trade if you know were to look, whilst distributors maintain their profits at the cost of their installer network that have no chance of competing.  It’s a no win situation, and it’s sad.

The erosion of profitability for the sales of these products will without a doubt take many small installation company’s to the wall. But it’s not just products, reducing your labour costs; the price you charge per hour, it’s not going to help short term. Why because we are in a recession there is not going to be a light at the end of this tunnel. So what can we do about it!  There is no point in distributors giving installers retail priced catalogues ‘with the suggested sales price and the trade price’ if the net trade price is available to all and sundry.

We are all consumers we are all looking for bargains in this recession, but our industry is bespoken, It will not survive without the trade to provide the service element for this sector, it’s not similar to purchasing a laptop, TV, new pair of shoes.  The problem is that all sectors selling quality bespoke goods have seen a reduction in their market place, the sensible ones do not however cheapen there goods and services, and maintain profitable margins to help grow the market.

 

There is no intention to imply blame for this situation; "recession is the underlining course, the results of falling sales and down turn in orders and enquiries". This type of situation can very quickly lead business to look for other avenues for sales. However having said all of this the distributors are at the head of the supply chain they all need to get a grip and sort the business end out, or it will be the end.

Not to paint to gloomy a picture, the rest of the year should see some scattered showers with sunshine at times.

John Birkett

P.S.  Just remember the competitive edge for a quotation given to customers; should be = too + OR - 10% of the competition, a good business man can be as close as 5% to win the order it’s not all about giving away big discounts that matters; it’s the bottom line i.e. profit.


 

 

Now most customers see the advantage of an electric gate, but this could just turn you a profit if installed?

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Product prices plummet

When competition is low and prices are high, retail margins stay fat and produce healthy profits. However, online retailing ignites a price war bonfire that continues to strip away profit in a frenzy for sales, prices plummet especially in the field of consumer electronics DIY, causing massive price deflation for installation retailers. With prices plummeting by (48%), it's hardly surprising that so many installers in this sector are struggling and dying out.

'High' street costs for a bricks-and-mortar business costs vastly more to run than a website. Thanks to high rents (payable quarterly in advance), business rates and staffing costs, product install warrantee, traditional installer retailers operate at a competitive disadvantage to nimble, web-based rivals.

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