It is with a very heavy heart I type this but after 13 years of trading we have been forced out of business by Piper Cams, the people who have manufactured our exhaust range for the last 10 years.
We will be closing the doors at the end of this month, 31st May 2016, any outstanding orders will be completed by that date.
The Forum will remain OPEN for as long as people want to use it and Anglias at the Ace 2016 will go ahead as planned.
As many have realised either from speaking to me or from seeing posts on here and on the Facebook we have not been able to supply exhaust products for some months now.
This situation has come about because towards the end of last year Piper Cams appointed a new Sales Manager, Justin Buckman, who without spending any time getting to know me or understanding our market place decided to 'review' our account.
We are a 'Contract Customer' so we contracted Piper to make exhausts for us, we paid for the development of all those products through a pre agreed order amounts and maintained exclusivity on those products by a guaranteed level of business each year. As part of this deal we had to order minimum order quantities and had minimum order values and Piper specified those quantities etc, we did not negotiate them they set the rules and we have worked within them for the last 10+ years, spending way over half a million pounds with them.
Piper have a number of 'Contract Customers' in a number of different niche markets, from classic Ford to kit car and each Contract customer is different, some only have one manifold made to suit their particular application, some have manifolds and systems, everyone is different and to my knowledge no one has a range as big as ours, which makes us quite unique in that respect.
As part of Justin's 'review' he wanted to bring our order quantities in line with other Contract Customers, so people who have one manifold may have to order 10 units at a time and thats what he wanted to do with us. He also wanted to remove our credit facility, something we have enjoyed for the duration of dealing with Piper and on their own Credit Controllers admission we had the best debtors days of any of their customers.
As I explained to Justin, if we were to order 5 different lines, so Crossflow, Pre-crossflow, Zetec, Anglia Systems & Cortina Systems, which was the typical make up of most of our orders, we would have had to take 50 items into stock and pay for them up front. working on a basic round figure for illustration purposes 50 x £250 = £12,500+VAT
And here's the kicker, we would have had to store 50 items and herein lies the crux of the problem that has led to the break down of the relationship.
On our previous arrangement we would have taken 15 items into stock which would have meant an outlay of £3750+VAT and we could do that and did do that anything up to 3 times a month depending on the time of year, it was a little and often, one in one out type arrangement so storage was never really a problem.
We explained all this and eventually the minimum order quantities were reduced to 5 items per line, however, using the same illustration above we would have had to order 25 units rather than the previous 15 units and again store and pay for those additional 10 units.
But there arent just 5 lines in our product range, so the situation just gets worse as you end up holding the slower lines, like N/A Cosworth or Lotus Twin Cam in stock for up to a year or more and in doing so locking up profit in those lines so any profit made on the faster moving lines, like Crossflow / Zetec / Anglia systems etc is swallowed up to pay for the slow moving lines, thus removing profit from the businesses cashflow for months and months at a time.
Piper stated storage and cashflow were my problem, not theirs and refused to return to the original trading terms that have been in place and worked fine for the previous 10 years.
The exhaust business forms 70-75% of 105Speed's turn over so it is no longer economically viable to trade, as the profit made on custom Propshafts, radiators, clutch kits etc is just not enough to warrant staying in business.
We do have a number of items in stock, radiators, clutch kits, Windscreens for Saloon & Van, heated and standard laminated for Saloon & Estate and standard laminated for Van, alternator conversions etc
So if you were thinking about something, speak to me sooner rather than later.
WE HAVE NO STOCK OF EXHAUST PRODUCTS so please do not ask.
Before anyone asks :-
Yes we did seek legal advice, however, like so many people we entered into the relationship thinking it would never end, so we made no provision for exit clauses or penalties. The naivety of youth and a belief that people will be as decent in business as you was my downfall and as a result have ended up losing a business I have worked at for 13 years, not because we've gone bust, but because a manufacturer has employed someone who has little or no understanding of business.
Yes we have looked at alternative manufacturers and although a couple were very interested because our trading history would allow them to grow their businesses, the work involved in re-developing the range was just too big a task
Yes we looked at taking on additional storage but as we are based in a village there is no commercial storage, which meant having to store things in Bedford and to get secure storage is expensive plus having part of the product range to hand and the other half miles away totally impractical and all of which would have added to our overheads which would mean prices would have to go up.
It just remains to thank everyone for spending a bit of cash with me over the years
Copied from 105speed forum.
.jpg)
Reply With Quote
Originally Posted by morcheen 
Bookmarks