PROVIDING one-stop shopping for customers, Royal Truck & & Equipment Inc combines the functions of truck dealer and equipment shop, and sells the whole truck at reduced prices. The company specializes in installing new truck equipment on refurbished chassis.
Instead of relying on customers or truck dealers to provide the chassis on which Royal mounts equipment, the company purchases its own chassis inventory. Royal purchases used chassis at auctions throughout the eastern third of the country, as well as from leasing companies, municipalities, and fleets.
About 200 trucks are kept in stock at the crowded, two-acre Royal Truck facility in Coopersburg, Pennsylvania. The trucks are serviced and refurbished in an eight-bay shop on the property.
Finished products are transported to customers throughout the United States. About 80% of Royal Truck's customers are located more than 100 miles from Coopersburg. The remaining 20% of the company's customers are located in nearby, highly populated urban areas including Philadelphia and Harrisburg, Pennsylvania, and New York City.
"We advertise in trade journals with the headline 'Why buy new?'" says Robert Roy, Royal Truck president. "We make used trucks look new and we service them to ensure they are mechanically sound. Royal Truck promotes the concept that customers can spend $40,000 or more for a new truck, or they can spend that same amount for two or three of our refurbished trucks, depending on model year and body application."
Royal Truck will not refurbish "junk," Roy emphasizes. Ideally, the chassis stocked by Royal Truck have between 30,000 and 50,000 miles of operation, and usually no more than 80,000 miles, says Steve Haman, the company's sales manager. Royal Truck strives to get complete service records of all trucks the company purchases, and provides these records to customers.
"Customers often are skeptical if you show them a 10-year-old truck with 40,000 miles of operation," Haman says. "Providing service data from zero miles operation verifies the truck's mileage."
Repeat customers and referrals account for a large portion of company business. In the past seven years, Royal Truck has quadrupled in size, from five employees to its current staff of 20.
Equipment Sales Increase Royal Truck started installing new truck equipment four years ago when the company became a Rugby dump body distributor. Previously, Royal Truck dealt strictly in used equipment. The company refurbished both truck chassis and the equipment installed on its trucks.
"We approached Rugby to become a distributor because we realized that reconditioning used truck bodies was costly and time-consuming," Roy says. "It was almost as expensive as buying new equipment, and it wasn't worth the headache."
The decision to become a new equipment distributor has paid off, Roy adds. Besides Rugby dump bodies and hoists, Royal Truck also handles Parkhurst grain and stake bodies. The company recently took on the Warren dump body line to expand into the tandem and triaxle market. Royal also handles lifting tailgates, tarp systems, and other commercial equipment. Royal Truck also is expanding into the snowplow and salt spreader equipment line in preparation for next winter.
"Sales of the Rugby dump and Parkhurst platform body lines in the past 24 months have exceeded $500,000," Roy says. "We see a lot of potential for increased sales, especially in the heavier truck market."
Dump trucks represent about 70% of the trucks sold by Royal Truck now, but this was not always the case. The company used to sell a lot of vans, refrigerated trucks, and bucket trucks, Roy says. As the market shifted, Royal Truck began producing trucks for different applications.
Royal Truck evolved from an earlier company named Royal Automotive, founded by Roy 14 years ago.
"I started out with two trucks in inventory and I was the sole employee," he says. "I did the buying, bodywork, selling, and repair."
Originally, the company bought and sold cars as well as trucks. Then Royal Automotive evolved into a dealer of exotic cars such as Mercedes-Benz and Porsche before the company began to concentrate solely on trucks.
Roy's interest in working on trucks stems from his experience as a youth refurbishing used bulldozer equipment in his father's shop, he says.
Building up Inventory In the early years of operating his own business, Roy spent many hours traveling to and attending truck auctions to build up inventory. His wife Pam often would join him on road trips throughout the eastern United States. She played a key role in helping to locate and establish good sources for future truck inventory.
"One of Rob's strong points is that he continuously looks for new sources of inventory and is good at networking," Haman says. "He is successful at making good purchases of truck chassis for the equipment we install."
Royal Truck keeps in contact with hundreds of truck auction sponsors, leasing companies, municipalities, and private fleets as sources of inventory. Organizing information from these various sources is the full-time responsibility of Wendy Horner, purchasing and sales administrator.
"People tend to go crazy on prices at auctions," Roy says. "To get better prices on trucks, I tend to shop for inventory a season ahead of when it will be in demand. For instance, refrigerated trucks and bucket trucks typically are in demand in the spring, but I may buy them in the dead of winter.
"Over the years, I've observed that people tend to get caught up in the bidding at auctions and tend to pay more for a truck in as-is condition than the price we would charge for the same truck reconditioned and repainted with a 30-day warranty."
Royal Truck operates two tractors and trailers to transport trucks from purchase locations back to the company's shop. One tractor, an International, was modified by Royal to accommodate five extra drivers. The trailer can haul two to three trucks. That means Royal Truck personnel can return to the company shop with seven to eight trucks. The International tractor can be converted to a tow truck by adding a "Big Ben" tow unit onto the fifthwheel. This allows Royal to service its local customers.
Besides installation work, the Royal Truck shop performs the full range of service and repair work, from engine tuneups to overhauls, Roy says. Reconditioning and body installation for retail sales account for 50% of the shop's work. The other 50% is repair work for individual customers and fleets.
Getting Trucks Ready Royal Truck completes an average of 22 and 25 trucks per month. "It is not unusual for us to spend $8,000 to $10,000 getting a truck ready for sale; that includes transportation to our shop, mechanical repairs, detailing, painting, and body installation," Roy says.
Degreasing is the first step Royal takes to recondition a truck. Trucks are steam-cleaned on a specially designed concrete pad. Oil is separated from water after it flows through grates under the floor.
After trucks are degreased, a crew of five mechanics and four detailers go to work. Mechanics evaluate the condition of the trucks according to a check list covering all major mechanical components, make necessary repairs, and bring the trucks up to standards for the Pennsylvania state inspection. After the trucks are thoroughly inspected and serviced, detailers clean and polish the interior and replace worn-out upholstery and floor mats.
"We almost always get the trucks repainted," Roy says. "We keep five local body shops busy. When the trucks return to our shop after painting, they get a final detail. We paint the engines, undercoat the chassis, and pinstripe the cabs."
Three Royal Truck fabricators keep busy installing new equipment and custom-building bodies. For example, they build sides for used platform bodies, converting them to grain bodies.
Specialized Market Royal Truck provides specialized trucks for small fleets and companies that operate up to 50 trucks, Haman says. Typical customers include family-owned landscaper, tree service, and construction businesses.
Most trucks that Royal refurbishes are medium- to heavy-duty vehicles. Some customers prefer trucks that are rated under 26,000 pounds gross vehicle weight and can be operated by drivers who do not have commercial driver licenses, he says.
To broaden the customer base to include more dealers, municipalities, and fleets, Royal Truck has begun attending trade shows and focusing more on marketing, Haman says.
"We recently returned from the New Jersey Landscaping Association show where we heard only positive comments from attending members," he says. "We had a lot of name-recognition from people who said they had heard of us from friends who had purchased trucks from us."
So far, the company's marketing efforts include regular advertising in trade publications. But Royal Truck soon will have a web site on the Internet to provide customers information electronically. The company has purchased a digital camera to provide color photos that can be downloaded on the computer.
"Our computer system will list all trucks in inventory," he says. "Printouts can be made and overnighted to customers."
Efforts to expand marketing likely will result in more sales, Haman says. But Royal Equipment has a more basic strategy that it relies on for continued success.
"Up to now we've been a low-key company, and a lot of our growth is in spite of this," he says. "A lot of our success stems from acting on Rob's belief in treating the customer well, the old golden rule."