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September 3, 2010 ATTENTION: Last week I asked anyone who has a supplier deal with LEHIGH GAS CORP to contact me as I am organizing a meeting for September 23 at 10AM at the Crowne Plaza in Clark, NJ. Since then I have heard from a few members, but I am certain there are more of you out there. For anyone out there reading this for the first time, I met with a group of LEHIGH-supplied dealers who feel as if they are being mistreated. ALL LEHIGH supplied dealers should contact me immediately so we can set up a meeting to discuss these issues. No matter if you own your location, lease it from a third-party or are a LEHIGH lessee, I MUST HEAR FROM YOU so we can address any possible concerns. More details will follow, but please plan to attend on September 23.. Now back to our regularly scheduled e-newsletter... Those of you who are longtime members – or even just veteran gasoline retailers – know that the issue of Zone Pricing has been a thorn in our side forever. For the uninitiated, Zone Pricing is a strategy employed by gasoline majors that is based on a complex and secretive formula. Essentially, majors consider a number of factors together to determine how to price their product. What do they consider? How many competitors you have in the area and what brands they sell, how much fuel volume your station does, what traffic is like in your vicinity, and a myriad of other factors. Ultimately, this phenomenon – which is conducted entirely in secret and only known to the majors themselves – can create such a disparity that two similar branded stations only a mile apart will buy gas at different prices despite being supplied by the same company. Proponents claim that this is merely the cost of doing business. They say that market fluctuations during the day and the price of transportation varying from location to location all contribute to these disparities. While no one would argue that these factors would contribute to small price differences, opponents (and NJGCA is among the MOST vocal) strongly believe that this is merely an excuse to pit one dealer unfairly against another, and minimize your share of the margin that could be realized at that particular location. Instead they realize that profit for themselves! Ultimately the small business owner and the consumer are harmed. But while your customers always have the option of going down the street to the next station to purchase fuel, you often have no choice but to accept the price you are presented. How far back does the practice go? Quite a while back – and it’s only getting worse! When I went into business in 1978, Exxon had two zones: One in North Jersey and one in South Jersey. At the time, the difference was only a penny or two between the two zones. Over the years, ample evidence shows that there is presently between 100-300 zones around the state!! As unbelievable as that seems, it is the reality of the current market. But it’s not just Exxon; other majors do the same. From what we can decipher, the biggest violators seem to be Exxon, Shell, Sunoco, and Lukoil. And it’s not just the majors; some distributors also play in this game as well. Last week I mentioned (and this week I have repeated) the need for meeting with Lehigh dealers. We have seen evidence that Pennsylvania-based Lehigh Gas Corp (which sells Exxon, Shell, Valero, BP, Gulf, Mobil, Hess and Sunoco) maybe playing at this game as well. In fact, we have indications that they have been employing these discriminating pricing practices for some time. So what are we doing about it? How can we combat this issue? A few years ago, I began to tackle this problem and asked for you help. I requested that our members volunteer your DELIVERED prices in comparison with retail prices of similar brands in your area. My purpose in conducting this survey was to document the sharp differences in prices for the same product being delivered by the same supplier. However, I’m sad to say that relatively few of you cooperated. Those that did were inconsistent with your pricing information and eventually all efforts to report information back to us stopped (despite daily phone calls). Next, we created the GDC Price Matrix to help us gather similar information on a real time basis. Here too there were few volunteers and whatever participation we had eventually died out. As upset as it made me to see these initiatives fail, it makes me even more disturbed today, because I believe that this problem is more serious today and many of you are being hurt very badly. Right now I am rethinking how to do this and gain your cooperation. I’m confident that if I get the right volunteers, we can build an air tight case for the Legislature to pass a bill to help correct this problem. And correcting it IS important. Don’t ignore this warning and don’t merely trash this email. You only have to look around your local community to see that we are a dying breed. The dealer community has already shrunk in half over the last 20 years. You can’t escape the fact that 20 years ago, there were 6,000+ stations owned by 6,000+ individuals. Today, there are less than 3,000 service stations and many are controlled by multi-site owners. In fact, I estimate that there are actually less than 2,000 owners in the dealership community for those 3,000 locations. You get the picture? Half of your colleagues and competitors are gone. We only have ourselves to rely on. Whatever idea, communication or strategy we come up with, I’m going to need you (and your competitor down the road) to help me achieve what is necessary to survive this continuing onslaught! That means I may need you to change your thinking, before it’s too late! Reminder for upcoming classes! Many of you have contacted us about what classes we have coming. While we are continually adding and updating our class schedule, you should click HERE to see our latest offerings. Currently we will be holding three classes that you can sign up for immediately. They are: NJGCA INITIAL EMISSION REPAIR TECHNICIAN CERTIFICATION CLASS, NJGCA EMISSION REPAIR TECHNICIAN RE-CERTIFICATION CLASS, & NJGCA/NJ EMISSION INSPECTOR TRAINING CLASS. Again, click HERE to see the details and description of each class, and then call Debbie Hill at our offices to sing up! If you don’t see a class available or a class is full, let us know so we can address your need! The raw truth about safety inspections: Even those of you that are not PIFs have been doing Safety Inspections as a matter of routine practice every time a customer drives in to your service bays for an oil change. That is why many of you offer low priced oil changes or even free oil changes. The object of course is to display your professionalism by alerting customers of potential maintenance and especially safety problems. Most of you have computerized your customer records and keep a file that lists the observations that you have made when a vehicle is in your shop, in order to remind customers of the maintenance they need to keep their cars safe and trouble free. Many times the INSPECTION STICKER was always the final arbiter in helping a customer decide whether or not he or she will choose to have service performed. How many times has a customer instructed you not to fix something because they planned to get rid of the car soon? When I had my shop we used to laugh every time a customer said those words, and were usually accurate when predicting that the customer would continue to own the car long into the future. BUT…..when we responded that “without the suggested repair the car would not pass inspection”….then the customer re-evaluated their decision and usually opted to have the required service performed. Today you no longer have the INSPECTION STICKER as a “persuader.” BUT you still have the law on your side! Regardless of your inability to FAIL a vehicle and withhold an approval sticker, you should still make your honest recommendations and remind your customer that the law requires them to drive a safe vehicle. In the upcoming weeks, I will be providing you with all of the necessary statutes and codes that require motorists to operate safe vehicles. These are the same statutes and codes that the police will be writing violations for if they are ignored. Here is just one interesting statute on the books in New Jersey that will be helpful to you:
39:3-44. Unsafe Vehicles As a professional, you should continue to offer a safety inspection when a vehicle enters your shop for an emissions inspection. Of course you should continue to provide this valuable service with each oil change too. When you point out the laws that may be violated when recommended repairs are not made are not as forceful a persuader as the INSPECTION STICKER, but it certainly can be used to COAX customers to “do the right thing.” This is the reason that I want Governor Christie to close all of the CIF locations and sell the properties to private business for use in other commercial ventures. Having ALL motor vehicle inspections performed at PIFs will move 1.9 million vehicles in to your shop for you to inspect. How you conduct the inspection is up to you….but those vehicles will still need brakes and tires. I will get you the necessary laws soon. I am still trying to figure out the best way that I can assist you in presenting these laws to your customers. Right now I am thinking of a pamphlet or poster of some sort. Stay tuned.
Last week we also discussed our recent move to a new email service. Have you experienced any problems receiving our messages since then? Please call or email us to let us know of any possible difficulties. Also, please let us know if you were NOT getting our messages before, but you are getting them now!
UPDATE: NEW PIF CLASSES ADDED!!
CALL FOR FUTURE CLASS SCHEDULE INFORMATION
INITIAL EMISSION REPAIR TECHNICIAN CERTIFICATION CLASS
New Jersey Gasoline C-Store Automotive Association (NJGCA) is offering an INITIAL ETEP Certification course. This is the entire program, section 1 – 7. This is everything you need to become a licensed Emission Repair Technician.
Our Course includes:
LOCATION:
CLASS COST (INCLUDING MANUALS): PLEASE NOTE: We are always in the process of putting together additional classes. If you are interested in taking classes in this time period, please call NJGCA and let us know so we can add you to the list. Call Debbie Hill to enroll in the classes at debbie@njgca.org or call 973-376-0066.
POLITICAL PARTICIPATON: THE NJGCA PAC
Ensuring our friends in the legislature are re-elected and advocating for our agenda in Trenton are of utmost importance to the agenda of NJGCA. It is for this reason that your Association has established the NJGCA PAC. For too long, the weight of funding our Political Action Committee, the arm of the Association responsible for political donations, has rested upon the shoulders of a few. This is not fair to them, and it is not fair to many of you who are relying on the benefits of good legislation being passed in Trenton. To truly understand the importance of fundraising for our allies, let’s look back upon the overwhelming successes of the last year: NJGCA successfully lobbied against BELOW COST SELLING. If approved, BELOW COST SELLING would have cost each of you thousands of dollars and put many of you out of businesses. NJGCA leaned on some of our friends in the Assembly and literally had the bill pulled off the floor on the day it was scheduled to be voted on. Our friends in the Legislature helped us get this accomplished. NJGCA made history and led the charge to pass the most comprehensive protection of franchisees in decades with FIRST RIGHT OF REFUSAL legislation. FIRST RIGHT OF REFUSAL passed only because NJGCA and dealers throughout the state were able to lean on several friends in the Assembly and the Senate. NJGCA has been rallying support for RIGHT TO REPAIR over the last two years among key legislators. This would end the practice of car manufacturers denying you the codes necessary to complete the repairs you make on your customers cars. Every state has tried to pass RIGHT TO REPAIR and no state has even been able to get the legislation out of committee. Because of our friends in the Legislature, NJGCA has been successful in getting this bill passed by the Assembly and now awaits a vote in the Senate. I am asking some of you as individuals to make a contribution and attend a fundraising event sponsored by one of our friends in the Assembly. However, we will not be able to host events for all of our friends, so the NJGCA PAC will have to make contributions. You will be receiving letters soon from the NJGCA PAC asking you to make contributions. If every member contributes just $100.00 we will be able to provide the help necessary to ensure victory for our allies.
PLEASE SEND YOUR CONTRIBUTIONS TO: I understand that times are tough for all NJGCA members, but this is just as important as any battle we have fought in the past. We have made great progress in Trenton. I hope that you will answer the call.
NEWS AROUND THE STATE CLICK HERE TO READ MORE ARTICLES IN OUR “NEWS AROUND THE STATE” ARCHIVE |
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