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His own man
Page 52
Page 53
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The massive increase in Internet usage and the way business is conducted has benefited independent dealer Paul. Hughes Commercials, where trade has expanded from the owner's home to an established business in five years.
Words: Kevsn Swallow / images: torn Lee When Volvo Trucks dealer MC Truck & Bus moved its operation from Purfleet. Essex, to Maidstone, Kent, in 2003, Paul Hughes saw an opportunity to strike out on his own.
After six years with Volvo and 10 years with Scania dealer Scantrucks, selling used vehicles, the time, he says, was right. Leaving a good job, friends and a regular pay cheque behind wasn't what he had in mind, but the relocation provided the right impetus. "Before I went out on my own I was paid on the fifth of every month. After all those trucks I sold, in all those years, all of a sudden I didn't have a wage," he reflects.
"It was very odd to begin with after getting a salary for 16 years. I carried on doing what! had always done. I found it easier and better to spend my own money rather than to answer a question from a boss about how you're doing this month. Initially, there was a little uncertainty. Would all your customers desert you and stay with main dealers. Luckily, my customers were happy with the service I gave them," he says.
Hughes financed the venture with £10,000 savings and a £5,000 overdraft. "I didn't have any premises as such; I was based at home and bought and sold one or two trucks through magazines. I was selling on a commission-only basis, mainly for MC, to begin with. That was paying my wages. The first truck I sold for myself was in February 2003. It was a 4x2 Volvo Globetrotter to McKellar Trucking," he says. "The commission work fell away after that."
However, there were some tough times early on. -The first three trucks I bought were from a finance company. I was £20,000 overdrawn and my wife wanted to go shopping. I told her she couldn't go shopping until I sold one of those lorries she had to wait a week," he recalls.
As Hughes developed his business, the trucks he bought and sold were stored at various sites and yards. He first found a place in 2004 he has since moved twice and in December 2007, he ended up at Purfleet Industrial Park, which backs on to the Eurostar railway line.
With experience of providing centrally orchestrated aftermarket services as an employee at a franchise dealer. offering a more personal and bespoke vehicle back-up service as the boss of an independent dealer plays well with his customers.
Warranty insurances
"Scania and Volvo became involved with the third-partytype warranty insurances. People were having problems and were saying: 'Ring up the warranty number'. But the items were usually wear-and-tear items and they weren't covered. It wasn't a nice situation.
"I don't pay for an aftermarket warranty. I keep the money in the pot and if a customer has an issue with an alternator or a wear-and-tear item, I'll have a chat with them, and if I think it's something that's unfair or I can go halves with them, then I'll suggest that.
"It's a much fairer way of doing things. People have had enough of hearing that the office is closed. They prefer a more personal approach," he says.
Hughes has access to four workshops in a one-mile radius and vehicles are sourced from underwriting for main dealers, repeat business and part exchanges for newer trucks. "Traditionally, the £10,000-£20,000 range is my main business. In the past six months, there have been more exports and business is on the increase with direct contacts in Germany, Dubai, Poland, Cyprus, Ukraine and Africa.
"They are paying the same prices as UK buyers. I am paying the same for trucks and getting the same as a year ago. Export is 30% of my business and as I am near Tilbury Docks it's easy to ship.
"I deal with trucks of at least six to eight years old, rather than more expensive stuff. However, in the past few months, I have got involved in the £25,000-plus lorries with Euro-3 engines because of the London low-emission zone (LEZ). The past four months have been our busiest time. The LEZ-compliant motors have been making £3,000£4,000 more and the part exchanges we've had went to export, so it's been a good situation," he says.
Made in Sweden
The Purfleet yard houses just Swedish-built trucks. "I know everything about them. When I started I said that if I stuck to Scania and Volvo, I can't go wrong, and I am proud of what has been achieved in the past four years. People thought that I might not be able to do it.
"I have got good customers. When you start out you take flyers on different deals when maybe you shouldn't just to get the ball rolling. When you get more established, you pick and choose a bit more." he says.
The internet, which has single-handedly changed the way trucks are bought and sold, has been key to growth, says Hughes. -Traditionally, you had to have a million pounds-worth of stock on the forecourt and you had to wait by the phone and for people to come in or ring. Now you don't need a million pounds-worth of stock. All you need is access to trucks and a website.
"People haven't got to travel hours for a truck; they can buy it over the phone. It's changed my life. If it wasn't for the Internet, I wouldn't have a job because you can't afford to stock the yard full of lorries as an independent.
"Not many come in and kick the tyres. The web has revolutionised the industry. When the site started two years ago, it kick-started the business and the whole image," he says. "Straightaway. it looks like a proper firm that knows what it's doing. People can see the type of trucks they are dealing with." •