When I got out of college in 1967 and started work, most companies were run by technical people who supported research and development.
In the lab we were allowed a lot of latitude to work on related projects that may not have an immediate payout.
This lasted for a few years, but with the change in economy, many companies started to shift more and more to the “Business School” model. If it had settled to a happy medium that would be good, but that did not happen. The business-types took over more and more companies. This resulted in the near failure of several car companies and others.
Some companies have shifted back, but the general rule in the business world today is that the bottom line is the only concern. This has hit the general aviation world in many ways.
It has hit us especially in the lack of new technology and new products.
I know there is that liability problem, but that does not explain all of the problems.
The latest scheme in business is the super jobber or distributor. In the past, a manufacturer would sell their product to a network of distributors or jobbers, who would then sell the product to the end user.
The new scheme is the manufacturer sells only to one or more super jobbers or distributors who then sell the product to the regular jobbers or distributors, who then sell to the end user.
There are several advantages of this scheme for the manufacturer. The first is a reduced sales force. With the old system, the manufacturer needed enough sales personnel to call on and provide service for all of their distributor and jobbers.
In the new system, companies can reduce their sales force since they only need to call on one or more super jobbers and distributors.
In the old system, the distributor and jobbers developed a relationship with their sales person, who would help them if they had a sales or technical problem. These may not sound like a huge savings, but if a company can reduce their sales force and technical personnel by a few people, it means a significant savings.
The second advantage for the companies is reduced inventory. Every manager gets a monthly report, and inventory is a fixed cost that goes against the bottom line. If the super jobber and distributors carry much of the inventory, it improves the manager’s bottom line.
The other big winner is the super distributor and jobber. They get to add a handling fee for all products and have closer contact with the factory. They also have a huge competitive advantage in the marketplace because of their reduced costs and direct factory support compared to the regular jobbers and distributors.
So what is the down side to this scheme and who is the big loser?
The big negative is that all products and parts will carry a surcharge, which means that the cost will be passed on to all of us.
An additional negative is the reduced competitive nature of the general aviation business.
There is also a reduction in the technical information pathway and increased delays in getting deliveries.
The other big losers are the regular jobbers and distributors who must pass on the increased cost and now have less direct information and sales path to the factory.
This marketing scheme is hitting all industries from automobiles to farm equipment and, of course, general aviation.
The problem is that the general aviation community is small and these increases in cost and decreases in service are a significant negative.