CHALLENGE: How can a small, privately owned company offer a full range of services for a product as sophisticated as today's light-duty trucks?
California Truck Works, an award-winning truck accessory retailer based in Stockton, California, knows the areas in which it excels. For everything else, there are partnerships.
“When I go somewhere to do business, I want a pro to tell me what he knows,” says Mike Johnson, president. “That's his job. I don't go to Sears to buy a muffler — I go to a muffler shop. I don't go to a tire store to get a tune-up. That's the idea behind our company. We have expertise in truck accessories. That's why customers buy from us.”
But California Truck Works has been able to expand its product offering beyond truck accessory sales and installation by partnering with other companies. A strong marketer, the company has discovered that it does not need to have something in order to sell it.
Example: spray-on bedliners. Johnson evaluated the cost of buying and operating the equipment and chose to send business to another company that already had expertise with spray-on bedliners.
“You have to ask yourself if it is worth buying the equipment or if it would be better to farm it out,” Johnson says. “We advertise our spray-on bedliners. We sell them. We promote them. They are good business for us, but we don't install them. We have a partnership with someone who does.”
Another example: exhaust systems. In this case, California Truck Works started farming out all of its exhaust work. Through time, the company acquired the equipment and expertise required and began doing some of the work itself. The company now offers a full line of exhaust systems, but it still does not work on car exhaust systems or catalytic converters. Instead, the company refers automobile exhaust customers to its partner. “We have made it clear to our subcontractor what our goals and objectives are, and have shown him how working together can help both of us.”
The company followed the same path when offering wheel alignments.
“Partnerships have been good business for us,” Johnson says. “They have enabled us to offer one-stop shopping for accessories customers, even in the early days of our company.”
Partners with dealers
Perhaps the most important partnership California Truck Works has developed has been with local car and truck dealers.
“Our success is based on public awareness,” Johnson says. “We have done this by working with local businesses, especially the dealers. Once we built up a relationship with the dealers in our area, we started working on the general public.”
The general public is essential to California Truck Works because the company primarily sells consumer-oriented truck accessories. That's why California Truck Works spends a lot of time on the radio.
“We work with an advertising agency,” Johnson says. “For our market and our type of business, it does the best job reaching the general public.”
Some of the products see use in commercial applications (Firestone, Hellwig, and Air Lift load-leveling systems, Warn winches, bumpers, grille guards, running boards, bedliners). Others are strictly appearance accessories, a much wider market than the commercial applications that many truck equipment operations serve.
“We sell a lot of accessories to commercial and utility customers,” Johnson says. “A lot of times the specs are incomplete. The spec writer might know he needs 40 trucks, but sometimes the details aren't there. What about warning triangles? Tiedowns? Chains? Where will all of these things be stored?
“Accessory stores like ours have opportunities to sell to commercial customers. But I think sometimes the commercial truck equipment guys miss some opportunities to sell appearance products. People want pizzazz. Aluminum wheels, stainless steel mirrors. Think of all the stuff that used to be painted. There are a lot of good-looking commercial trucks being sold, and these types of accessories help make them look good. It's possible to miss some sales if we focus just on meeting the specs and don't offer the customer anything beyond that.”
California Truck Works is based in Stockton, a city located between Oakland and Sacramento. In May, the company opened its third location — in a suburb of Sacramento. The other store is in Tracy, halfway between Sacramento and Oakland.
“The new store in Sacramento is a mirror image of the one we have in Tracy,” Johnson says.
The 4,000-sq-ft store consists of two sections — a 2,500-sq-ft shop and a 1,500-sq-ft showroom. The staff includes a store manager, a salesperson to work the parts counter, and an installer. The manager is trained to back up either of the other two, providing the operation with the ability to better handle changes in demand.
The shop has two bays, both of which are deep enough to accommodate two light-duty trucks. Jobs are considered either long-term, intermediate-term, or short-term. Examples of long-term jobs (requiring a day or 1½ days to complete) are suspension modifications or alterations to vehicle ride height. Intermediate-term jobs take less than a day but more than two hours. These include the installation of gooseneck hitches and running boards. More commonly, however, are short-term jobs (less than two hours) such as the installation of bedliners, hitches, ladder racks, and toolboxes.
“We flat-rate the installation of any of the products we sell,” Johnson says. “Sometimes, though, customers bring us accessories to install. In those cases, we charge by the hour.”
Adding locations
The Sacramento location is the company's newest by less than a year. California Truck Works opened its Tracy store in October 2001.
The Tracy location contains 4,200 square feet, half of which is shop, with the remainder showroom and offices. Like Sacramento, it also is staffed with a manager, an installer, and an inside sales representative.
Stockton remains the company's flagship operation. It is the only location where the company does any welding or fabrication. “We have all the tools — and the permits — we need for welding and fabricating here,” Johnson says. “Installations at our two other locations are strictly bolt-on.”
The three locations form a line that is only 75 miles long, yet each store serves a market with different demographics. While California Truck Works is still discovering what works best in its Sacramento store, Johnson points to some major differences between the accessories the company sells in Stockton and Tracy — less than 30 miles away.
“We sell a little of everything in Stockton,” Johnson says. “About 30% of our business comes from contractors and the agricultural industry, with another 30% coming from recreational customers. About 10% of our customers are gadget buyers. They want things because they want them.
“The mix is different at Tracy, which is a bedroom community of the Bay area. About 80% of those sales come from customers who buy because they want to. We don't sell many hitches or ladder racks because Tracy has very little commercial business. But if a product is hot, they want it. Most of the products we sell are used to customize our customers' trucks.”
Attracting female customers
Given the nature of the California Truck Works market, it is important that the company attract female customers. Many of the accessories the company handles go on SUVs, and the Tracy area in particular is prime SUV country.
“The SUV market is interesting,” Johnson says. “We have shifted from station wagons, to minivans, and now SUVs. The reason is that families are growing again, and so is the stuff that they carry. SUVs are capable of carrying and towing that stuff, and many of them are driven by women.”
California Truck Works has made an effective effort to bring female customers into its stores. Women now represent between 22% and 27% of the company's business. Curb appeal of the stores is part of the reason, but so is what is inside.
“People tend to equate this type of business with a tire store,” Johnson says. “Mention a truck accessory store to a woman, and she probably will begin to smell tires and visualize dirty bathrooms.
“We have worked hard to overcome that image. Our stores are clean and attractive. We have redesigned our showroom here in Stockton (the only showroom the company has that is more than a year old) and equipped it with contemporary fixtures. The Stockton area has a large number of people involved with horses. A lot of women show these horses as well as ride them. It's not unusual for them to come in here and rattle off a long list of things they want to buy.”
Creating desire
While California Truck Works has made a push to attract women customers, the company doesn't stop there. A healthy advertising schedule (backed with co-op money from its suppliers) helps get the word out to the general public, as does its outside sales effort. Once customers — male or female — arrive at California Truck Works, they have a spacious showroom to shop and an inside sales person to assist them.
“In the accessories business, you have to create a desire,” Johnson says. “That's where your expertise and knowledge of your product line comes in. Customers rarely come to us with an idea or vision that they got out of the blue. It's our job to create a want or desire that will make the customer happy.”
The showrooms help make that possible. California Truck Works gets product out where customers can see it and envision it on their vehicle. If the product is not on the showroom, the company may be able to show it in their photo album.
“We have started a photo album,” Anne Johnson says. “We list on the back of each photograph the things we did to the truck. We file it by categories so that we can quickly find what we are looking for. That way, if a customer asks if we have a picture of a Chevy with a camper shell on it, we can say ‘sure’ and go right to it.”
Knowing what to stock
The products each store stocks generally is up to the manager of that store.
“We have done well letting the store manager match the products he sells with the demographics of his market,” Mike Johnson says. “I have had to make a few adjustments, but not many.”
It has taken some time, but management has a good idea now what sells best at its year-old store in Tracy. The product mix is different from what the company's experience has been in Stockton. Receiver hitch covers, for example, sell much better in Tracy than they do in Stockton.
California Truck Works uses the Internet to help its local customers and those well outside its immediate trade area.
“Our site is an informative tool, rather than an electronic store,” Johnson says. “We want it to help educate our customers and not just sell them. It's not our desire to be a mail order company. Even though our site has generated sales as far away as Hawaii, we like it mostly because of the customer service it provides.”
Winning awards
California Truck Works has won several awards, including the Business People of the Year Award from the Stockton Chamber of Commerce in 1997. The company also won the Vanguard Award given for creating and managing marketing trends.
The company can trace its roots back to 1976 when Mike's father started as a U-Haul dealer after retiring from the Navy. The operation became the largest retailer of trailer hitches in Stockton, Johnson says.
As with many family operations, Mike Johnson started at the bottom of his father's business (1979) and worked his way up. He was managing the store's truck accessory department in 1989 when U-Haul decided it would drop the truck accessories it had been selling.
Mike Johnson bought the accessories inventory of 15 U-Haul locations and went into business for himself at age 25. Since U-Haul was leaving the truck accessories business, the company provided Johnson's fledgling operation with six months to operate rent-free in the existing location and allowed him to take existing customers with him when the six months expired and the company moved into its own location.
Looking ahead
California Truck Works started in Stockton with a 4,500-sq-ft facility. However, the company soon outgrew that building and moved into the present 11,000-sq-ft “truck accessory superstore” in 1995.
The company has grown to the point that it purchased one of its suppliers three years ago. By acquiring Off Road West, California Truck Works obtained a company that could buy direct from accessory manufacturers. Off Road West is a warehouse distributor that sells primarily four-wheel drive accessories to other retailers.
“California Truck Works was their best customer,” Johnson says. “Acquiring Off Road West was an opportunity for us to buy someone who supplies us.”
But the acquisition also was a challenge, according to Johnson. It was important that the new owners expand the warehouse distributor's sales volume. That meant California Truck Works had to assure the rest of Off Road West customers that the warehouse distributor would continue to charge California Truck Works a mark-up and not treat sales to its new owner on a pass-through basis.
Mike Johnson does not see any more acquisitions or startups in his company's future, but he does see growth for the operations he has in place. Based on what he has seen in his industry, he is convinced that owning three stores and a warehouse distributor is as big as a company of this type can get before it becomes unwieldy.
However, even if the number of players remains the same, there is no reason to believe that the company itself won't grow. Johnson believes that light duty trucks will continue to increase, taking an increasingly larger share of the overall automotive market.
Meanwhile, Johnson plans to continue working in partnership with others, whether they are dealers, suppliers, or competitors.
“If someone reading this story has any questions about how we do things, they can call me,” Johnson says. “The more qualified people there are out there, the easier business becomes.”