The National Association of Trailer Manufacturers (NATM) is excited to welcome trailer dealers to the 2022 NATM Convention & Trade Show in Tampa, Fla. Feb. 1-3, 2022!
NATM has been committed to trailer safety for more than 30 years. While NATM has long worked with trailer manufacturers, industry suppliers, and service providers, trailer safety can only be improved through dealer interaction and consumer education. Expanding the Association’s base to include dealer affiliates and now allowing dealers to attend the Annual Convention & Trade Show is the logical next step in improving trailer safety.
The NATM Convention & Trade Show is the annual trade show for the light- and medium-duty trailer industry. With more than 1,000 trailer manufacturer and supplier attendees per year and growing, this "must attend" event provides education, networking, and communication for those in the industry. The 2020 sold-out trade show boasted more than 200 exhibiting companies, with 37 new exhibitors, giving attendees a variety of products and services to view. The show also included attendees from more than 100 trailer manufacturing companies across North America.
The Association’s purpose is to open lines of communication, increase trailer safety awareness, and provide dealers with the education and information they have long requested from NATM. NATM has worked diligently with committees, trailer manufacturers, industry suppliers, and dealers to create a path of inclusion for dealers.
Dealers will be invited to attend all regular workshops and technical forums, as well as the Awards Reception on Tuesday; Dealer Workshop & Luncheon on Wednesday, Feb. 2, 2022 at 11 a.m.-3 p.m. and the Trade Show Reception Wednesday 4-5 p.m.
Please note: Dealers are not able to attend the Tee Off Convention Top Golf event or the Trade Show Floor on Wednesday, Feb. 2 between the hours of 11:30 a.m.-4 p.m.
Dealers are invited to tour the trade show floor and shop for components, materials, and service providers on Wednesday, Feb. 2 during the Trade Show Reception 4-5 p.m. and Thursday, Feb. 3 from 9 a.m. to noon. There will be no trailers on exhibit at this show.
NATM will be offering a “New Dealer Promotion” to help offset costs for dealers attending the show. NATM Dealer Affiliates are eligible for two complimentary full registrations and two free hotel room nights while available! To apply for the New Dealer Promotion, contact NATM Assistant Director Meghan Ryan at Meghan.Ryan@natm.com or (785) 272-4433.
Fall is the time when members can volunteer for committee assignments for the upcoming year. Interest indicators are now available to all NATM Members are due back Dec. 15. The number of volunteers has grown every year and unfortunately, there are usually more volunteers for some committees than can be accommodated. All the committees meet by conference call, varying from monthly to quarterly.
If you want to get more involved and support the industry, please consider volunteering for a committee. NATM Committees are responsible for steering the work of the Association, guided by NATM’s mission and strategic plan. Committee members play a critical role in ensuring programming, benefits, and resources remain valuable to NATM members. Contact NATM Assistant Director Meghan Ryan at Meghan.Ryan@natm.com for more information. Sign up before Dec. 15 to participate!
Click here to access the 2022 NATM Committee interest indicator.
Click here to access the 2022 Trailer Dealer Committee interest indicator.
NATM Committees & Objectives
Finance: The purpose of the finance committee is to plan and monitor the Association finances. Primary responsibilities include monitoring the annual budget and NATM investments, making recommendations as needed for change in revenue sources, and reviewing Finance Policies.
Membership: The purpose of the membership committee is to recruit, qualify and approve applicants for membership, ensure ongoing member satisfaction and continuously find methods of engagement with members.
Trailer Dealer: The purpose of the trailer dealer committee is to review and make improvements to the NATM Dealer Affiliate program and associated benefits.
Education: The purpose of the education committee is to develop annual educational programming to be delivered to NATM members through a variety of mediums including Convention workshops and webinars. The committee will recommend presenters and topics based on member needs and industry trends.
Convention: The purpose of the convention committee is to plan and oversee all activities of the Annual NATM Convention & Trade Show. The committee recommends speakers, workshop topics, and other events for consideration as well as develops plans to increase attendance and when needed, adopts policies governing the convention.
Government Affairs: The purpose of the government affairs committee is to raise NATM's visibility among key government decision-makers and to advance NATM's position in order to proactively shape federal laws and regulations that may have a material impact on the light- and medium-duty trailer industry. The committee advocates these initiatives to members to recruit their assistance in educating and building relationships with Members of Congress.
Technical: The purpose of the technical committee is to review, clarify and interpret technical and regulatory issues impacting the light- and medium-duty trailer industry.
Technology: The purpose of the technology committee is to coordinate and serve as a forum for communication between tow vehicle manufacturers, component manufacturers, and trailer manufacturers, to better ensure that the technologies implemented are functional across vehicle types, makes, and models, for all parties involved as new technologies evolve and enter the market.
Compliance: The purpose of the Compliance committee is to oversee the general outline and enforcement policies of NATM’s Compliance Verification Program and review the Guidelines and recommend updates as required.
In 2019, NATM launched its Dealer Affiliate Program, a natural next step to further the mission of the Association as well as a direct response to requests from the NHTSA Administrator and trailer dealers across the country. NATM has been committed to the light- and medium-duty trailer industry for more than 30 years, with its focus on the manufacture of compliant trailers, the safety of the nation’s roadways, and the unification of the industry. The incorporation of dealers into the Association is vital to the continuance of these efforts.
The Association took Dealer Affiliate involvement a step further with the creation of a Trailer Dealer Affiliate Committee. This will help ensure NATM continues to deliver value that aligns with dealer needs as well as manufacturer and supplier needs. The Dealer Affiliate Committee will help guide program expansion in the coming years and serves as another opportunity to unify the industry and improve trailer safety.
NATM is looking for trailer dealers to participate on the NATM Trailer Dealer Affiliate Committee to better understand what
dealers want and need from their Association. The objectives of the committee include reviewing current benefits and making recommendations for improvement and expansion; review and submit content suggestions to the NATM Dealer Compendium; provide feedback on marketing and recruitment efforts of dealers; recommend educational programming; and participation in NATM’s annual Trailer Safety Week.
NATM encourages all dealers to consider participating and have their voice heard. For more information regarding the Trailer Dealer Affiliate Committee, contact NATM Assistant Director Meghan Ryan at Meghan.Ryan@natm.com or call (785) 272-4433.
NATM is excited to welcome trailer dealers to the 2022 NATM Convention & Trade Show in Tampa, Fla. Feb. 1-3, 2022!
The NATM Convention & Trade Show is the annual trade show for the light- and medium-duty trailer industry. With more than 1,000 trailer manufacturer and supplier attendees per year and growing, this “must attend” event provides education, networking, and communication for those in the industry. The 2020 sold-out trade show boasted over 200 exhibiting companies, with 37 new exhibitors, which gave attendees a variety of products and services to view. The show also included attendees from over 100 trailer manufacturing companies from across North America.
Dealers will be invited to attend all regular workshops and technical forums, as well as the Dealer Workshops & Luncheon on Wednesday, Feb. 2, 2022, and the Trade Show Floor Reception on Wed. 4-5 pm.
Please note: Dealers are not able to attend the Top Golf event, or the Trade Show Floor during the hours of 11:30 - 4 pm on Wednesday, Feb. 2.
Dealers are invited instead to tour the trade show floor and shop for components, materials, and service providers on Thursday, Feb. 3, from 9:00 a.m. to noon. There will be no trailers on exhibit at this show.
NATM will be offering the “New Attendee Promotion” to help offset costs for dealers attending the show. NATM Dealer Affiliates are eligible for two complimentary registrations and two free hotel room nights while available! NATM will email the link to sign up for the New Attendee Promotion on July 8th, 2021. For more information, visit www.NATM.com/convention.
Online registration will open on Sept. 13. NATM looks forward to seeing you in Tampa! For more information about the Convention & Trade Show or the NATM Dealer Affiliate program, contact NATM Assistant Director Meghan Ryan at Meghan.Ryan@natm.com or (785) 272-4433.
NATM is inviting trailer dealers to the 2022 NATM Convention & Trade Show in Tampa, Fla. Feb. 1-3, 2022!
NATM has been committed to trailer safety for more than 30 years. While NATM has long worked with trailer manufacturers, industry suppliers, and service providers, trailer safety can only be improved through dealer interaction and consumer education. Expanding the Association’s base to include Dealer Affiliates and now allowing dealers to attend the Annual Convention & Trade Show is the logical next step to advancing the mission of NATM.
The NATM Convention & Trade Show is the annual trade show for the light- and medium-duty trailer industry. With more than 1,000 trailer manufacturer and supplier attendees per year and growing, this “must attend” event provides education, networking, and communication for those in the industry. The 2020 sold out trade show boasted over 200 exhibiting companies, with 37 new exhibitors, which gave attendees a variety of products and services to view. The show also included attendees from over 100 trailer manufacturers companies from across North America.
Dealer attendees will have the opportunity to participate in all workshops and technical forums. The Association’s purpose is to open up lines of communication, increase trailer safety awareness, and provide dealers with the education and information they have long requested from NATM. NATM has worked diligently with committees, trailer manufacturers, industry suppliers, and dealers to create a path of inclusion for dealers.
NATM will be offering a “New Dealer Promotion” to help offset costs for dealers attending the show. NATM Dealer Affiliates are eligible for two complimentary registrations and two free hotel room nights while available! NATM will provide more information to all Dealer Affiliates via email in September.
Online registration will open this fall. NATM looks forward to seeing you in Tampa! For more information about the Convention & Trade Show or the NATM Dealer Affiliate program, contact NATM Assistant Director Meghan Ryan at
Meghan.Ryan@natm.com or (785) 272-4433.
Trailer Safety Week (TSW) is an annual nation-wide awareness campaign aimed at increasing awareness of the importance of being committed to trailer safety, educating end-users about proper trailer maintenance and usage, and creating a stronger alliance between stakeholders of the industry including trailer dealers, manufacturers, and end-users. Last year alone, TSW reached over 90,000 individuals.
First launched in 2018, TSW sought to help bridge the gap of communication between trailer manufacturers and end-users. Talking about the importance of trailers built to meet required Federal Motor Vehicle Safety Standards (FMVSS) can be a daunting task as end-users do not understand the complex regulations governing compliant trailer manufacturing. They recognize that they would not purchase a car without seat belts, but they do not understand that buying a trailer without key safety features can be just as dangerous. End-users are vastly under-educated on the proper use of trailers, and it is crucial to utilize the connections that dealers and manufacturers have with consumers in order to raise awareness of proper towing techniques and maintenance.
Getting involved in this important industry campaign shows potential customers that not only is the dealership a leader in the industry, but truly committed to trailer safety. Impress customers and instill confidence in the company’s dedication to safety by joining this trailer safety movement. Participating in TSW is easy!
Becoming an Official Trailer Safety Week Ally is a wonderful opportunity for companies who want to be involved in the safety movement but don't have significant time to invest. The TSW team provides Allies with the official Trailer Safety Communications kit to promote their involvement in Trailer Safety Week and to share information about safe trailering practices. This digital kit includes:
Promoting the dealership’s involvement with Trailer Safety Week is a breeze with this jam-packed kit. The content can even be customized to include content specific to the dealership’s typical customer.
TrailerSafetyWeek.com also houses a free towing safely guide to ensure trailer-users have readily accessible safety information at their fingertips. Wow your customers by highlighting this free safety resource that reminds them the dealership is looking out for them and their well-being long after they leave the lot. Topics include:
Now especially, safe trailering practices are important. NHSTA is cracking down on compliance violations, and two recent accidents have brought to light the importance of safe trailering practices. One accident, previously covered in an article on behalf of NHTSA, resulted in a fatality due to inappropriately connected safety chains between the tow vehicle and towed unit which led to disconnection on a highway. More recently, safety chains saved a couple dangling nearly 100 feet above a river.
Safe trailering practices save lives, and with millions of trailers—used by businesses, local governments, and individuals—traversing the nation’s roadways every day, it is crucial to ensure that trailers are being towed safely for the sake of everyone on the roads. NATM calls upon trailer dealers to join the movement in making roadways safer one trailer at a time.
Learn more at www.TrailerSafetyWeek.com/interest or email TrailerSafetyWeek@natm.com.
An Excerpt from “You’re the Problem (and the Solution)” by Bob Clements and Sara Hey
Many of the dealers we work with put themselves last. They put everything and everyone else first—their employees, their expenses, their sanity—until there is nothing left at the end of the month for them. When we start talking about cash flow, it’s not uncommon to hear an audible gasp as this is a subject that dealers don’t want to touch with a ten-foot pole. In my mind, I think that’s because there are major misconceptions around cash flow and money in a dealership. Many times, it starts with your employees. Your employees assume that, since you own the dealership, you go home at the end of the night and count your piles of cash, which is all locked in a secret room in your house that you designed specifically for that purpose. If you are doing that, more power to you; but, if you’re not, you are like most dealers around the country.
While your employees might see money coming into the dealership, what most employees don’t see is the large amounts of money going out of the dealership. They assume that since you sell X number of units a year, you just put that money directly into your pocket. They don’t see the cost of the equipment, payroll, payroll taxes, liability insurance, workers compensation, building maintenance, or any of the other hundreds of expenses you have to pay from your ever-thinning margins. They may assume you are filthy rich with no care in the world and can’t reconcile why you aren’t driving an expensive sports car to the dealership every single day. We all know that the scenario many of your employees have created in their heads may not be reality.
The struggle, many times, is how you bridge this gap of the misconceptions that the people around you (and maybe even you) have around money management inside of your dealership, with the changes that need to happen in order to have a profitable and thriving business. And heck, a happy and full bank account.
So, let’s work on changing the misconceptions that you walk into your dealership with, and start taking your profit before anything else. The idea of taking your profit first may seem a little (or a lot) overwhelming. So, how do you do this without feeling like you are going to faint every time?
1. Make the decision that things aren’t going to remain the same.
In Habit One, we talked about our surviving-versus-thriving vision. Surviving is a fine place to be, but not a place you want to stay. You are not doing anyone any favors being the last one paid, or not being paid at all. You have put too much time, sweat, and tears into your dealership for it not to provide you with the life you want. So, plan to take your profit first. Step one is to make the all-in, scary decision that you are going to make a change. This means that you choose, from now on, to pay yourself first, even when things seem like they are getting tight.
What you are getting ready to do makes a lot of logical sense from a numbers standpoint, but emotionally it will feel uncomfortable. As you begin this process and experience this discomfort, you will have to make the decision over and over again that you are going to require your business to pay you before anything else gets paid. So long are the years of looking at your P & L statement and seeing that you made a profit but have no idea where it went. So long to paying yourself but not cashing the checks. You are going to know exactly where it went because you are taking it out on a regular basis.
The decision you are getting ready to make is that you, maybe for the very first time, are going to take control of your cash flow, and not let your cash flow take control of you. How do you do this? You do this by creating a budget that pays you first. What is left, after you are paid, is what you have available to pay your employees and the other expenses that come with running your dealership. What do you do if there isn’t enough? You either need to increase your revenue or decrease your expenses. I wish there was more to it, but there isn’t. You have to make the decision to deal with being uncomfortable, so that you can gain control of your dealership, your life, and your sanity.
Do you know what the easier, but disastrous, option is? Letting your cash flow take control of you. Do you know what will help you be profitable and help you sleep better at night? You, taking control of your cash flow. It’s up to you. Do you want easy or do you want money in the bank? This decision is solely up to you.
2. Start with 1 percent.
So, you decided to choose money in the bank, over easy, or at least you are really starting to consider it. How do we start? How is it that after this decision your bank account will start reflecting the choice?
To start, I want you to pick a percentage that you, as an owner, are going to take as profit or retained earnings out of your business, as well as a salary. It doesn’t need to be big, but I need you to get used to taking a paycheck. So often, the dealership owners we work with take a little here and there out of the business, wait until the end of the year, and hope to see something left in the bank account.
So, instead of taking the approach that doesn’t work, pick a percentage that you want to set aside as profit or retained earnings, and an amount of salary that you deserve for all of your personal investment, risk, and liability. Then, off the top of your budget, deduct the percentage you’ve decided on from the profit that is produced and set it aside. Then, deduct the amount of your pay. The portion that’s left is what you are going to operate your business on.
If just simply reading this is giving you incredible anxiety and possibly heart palpitations, start with 1 percent off the top. That’s it. One percent of every dollar of profit produced in your dealership should be deposited in a separate bank account. This money is for your use. You can hold it as retained earnings, pay yourself as a distribution or dividend, or maybe begin to reimburse yourself for money you have previously invested into the dealership. How you do this may be decided by how your business is set up: sole proprietorship, LLC, S Corp, or C Corp. Connect with your CPA to make sure you are taking this money out of the business in the correct way for your situation.
Here’s an example of what this looks like. Let’s say you expect to gross $100,000 in revenue next month. From that you generated $9,000 of gross profit in sales, $10,000 in parts gross profit, and $7,500 in service gross profit. You now have a $26,500 pool of gross profit to run your dealership for the month. You would take 1 percent out of that amount ($265). Then, let’s say you plan to pay yourself $3,000. You would deduct that amount.
$26,500 – $265 – $3,000 = $23,235
This leaves you $23,235 to operate the dealership on for the month.
Moving forward, look at the next month. You know the season will begin to slow down and you anticipate bringing in only $80,000. Using the same percentages as before, sales would produce $7,200 of gross profit, parts would produce $9,600 in gross profit, and service would produce $6,000 in gross profit.
So, your gross profit pool now has $22,800 in it. Take the 1 percent ($228) and set it aside. Deduct your gross salary of $3,000 and the rest ($19,572) is what you have to run your dealership on for the month ($22,800 – $228 – $3,000 = $19,572).
If you fear it will not be enough, then now is the time to consider how to increase revenue or decrease expenses. No matter what, don’t leave yourself out of the equation. This will force you to consider other approaches to fix the problem. If you are wondering how I came up with the gross profit numbers, I used our balanced dealership approach. As we work with dealers, we work to have 60 percent of gross revenue generated by sales, 25 percent by parts, and 15 percent through service. I used a 15 percent gross profit margin on sales, a 40 percent gross profit on parts, and a 50 percent gross profit on labor.
The most important part of the exercise is that you created a habit of paying yourself first. Is 1 percent where it ends? Absolutely not. You should work toward the goal of putting 10 percent of every profit dollar produced into your pocket. I know that seems like a huge number when you are simply celebrating a 1 percent payment to yourself, but it is possible.
Something interesting starts to happen when you give the business less money to run on. You and your team will find a way to adjust expenses and force your business to run on what is available (or you will find new ways to make money).
Think about it this way. If you were given a brand-new tube of toothpaste, how would you use it? At first, you might be overly generous with the amount of toothpaste you put on your toothbrush. If some extra fell off and landed in the sink, it wouldn’t be a big deal. However, if I were to give you a tube of toothpaste with only a small amount of toothpaste left in it (and you couldn’t go buy any more for at least a week), how long could you make it last? My guess is as long as you needed. In fact, I bet you could make that toothpaste last two more weeks! When you feel like there is an excess of resources available to you, you typically get careless in using them. However, when you feel like what you have is scarce, you use it more wisely. That’s exactly the mindset shift that I need you to take on in regard to your money. Take what you should off the top and learn to run the dealership on what is then available or left over.
3. Put your 1 percent (or more) somewhere you won’t touch it, and have someone hold you accountable.
Where you put your money is equally as important as taking the money out. Now, I’m not saying an account in the Bahamas is the answer; that just looks shady. But you can’t leave your money in the same account that you pay your expenses out of (or an account where you will be tempted to loan it right back to the dealership—we know you do this!) because you know as well as I do that the money will be simply absorbed, and your hard work and determination will be all for nothing. When that happens, you feel defeated and wonder why you even tried.
So, open a separate account simply for this money. That’s all you want to put into this account. Maybe you know yourself well enough to know that a separate account at the same bank won’t do and you need to move the money to a different bank that is not linked in any way to the business. If that’s what you need to do, just do it. There is no judgment here. Our focus is simply that we want you to get in the rhythm of having your business pay you, as the owner, on every single profit dollar that is generated each month.
Some of the dealers we work with go one step further when starting to implement this change. One of our advisors has his dealers send him a picture of the “off the top” check as proof that they are taking it out of the business. Above that, he asks them to tell him what they are going to use the money for. Sometimes it is to accomplish a goal they have set, maybe it is designated for something fun, or at other times it’s simply to help them survive. Now, you may or may not need that accountability, but I will tell you, if you aren’t currently paying yourself on a regular basis from your business, at first, it will feel strange. And, if you need someone to tell you that it’s okay to pay yourself first, I’m here to tell you, IT’S OKAY!! In fact, it’s critical.
4. Consider doing something fun with the money you are earning (at least in a small way).The last step is the best step. This is where you get to dream a little. Think about something you would like to do and how you could use this money on something you and your family would enjoy. Maybe it can go toward a vacation or furniture fund, savings for a lake house, or just a night out at your favorite restaurant. You have worked hard to generate this revenue in your business, and now is your time to celebrate your hard work, risk, and focus. So, pick something fun and do it.
Now we need to turn our attention to another matter. Let’s say that after you take out your salary, there is not enough money to cover all your expenses, specifically your employee expense. It might be that you are overpaying your people. Let’s walk through how you should calculate what each employee, by department, should be earning.
NATM headquarters receives frequent questions from trailer dealers and end-users about state troopers and local law enforcement officers pulling over towed trailers the drivers thought did not require a commercial driver's license (CDL). Is this a result of overly-aggressive law enforcement at work? Or a lack of awareness regarding CDL laws? Perhaps a combination of both?
What appears to be behind these inquiries is the vagueness of the CDL laws and the general confusion and disagreement this vagueness naturally generates. So, let’s try to clear up some of this confusion. Congress has charged the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) with responsibility for implementing the federal CDL laws through federal regulations and has directed the states to issue CDLs in conformity with these regulations. The FMCSA’s CDL regulations appear in the Code of Federal Regulations, 49 C.F.R. Part 383. The FMCSA requires drivers to have a CDL – either a Class A, a Class B, or Class C (for transporting passengers or hazardous materials) – in order to operate defined types of commercial motor vehicles (CMVs) in interstate, intrastate, or foreign commerce.
To clarify its regulations, the FMCSA publishes a graphic illustrating the various vehicle configurations constituting the groups of CMVs requiring a Class A or Class B CDL. That graphic can be found to the left. State and local law enforcement often refer to it for guidance.
The FMCSA requires drivers to have a CDL to operate a motor vehicle if that vehicle meets the FMCSA definition of a “commercial motor vehicle” and is used in “commerce.” The FMCSA defines both terms in this two-part requirement in 49 C.F.R. § 383.5. The great misunderstanding out there, within the trailer industry and probably within the law enforcement community, about the CDL requirements springs from those two definitions, particularly the word “commerce.”
The FMCSA defines a “commercial motor vehicle” as a motor vehicle, or a combination of motor vehicles, in certain GVWR-based configurations, when used in “commerce” to transport “property or passengers.” The physical configuration component of the CMV definition is very mechanical, very objective. When dealing with a tow vehicle-trailer combination, you look at the gross combination weight rating (GCWR) of the tow vehicle if the tow-vehicle manufacturer has assigned it a GCWR and displays it on its certification label. With respect to the familiar combination, a tow vehicle (whether truck, automobile, or tractor) towing a trailer, the driver needs a CDL if the tow-vehicle manufacturer’s assigned GCWR exceeds 26,000 lbs. (as shown on its cert label) and the trailer’s gross vehicle weight rating (GVWR) exceeds 10,000 lbs. If there is no assigned GCWR, the FMCSA regulations require the driver to have a CDL only if the sum of the GVWRs of the tow vehicle and the trailer together exceeds 26,000 lbs. and the trailer’s GVWR exceeds 10,000 lbs. In either scenario that satisfies the definition of “commercial motor vehicle,” the driver will need a Class A CDL, assuming the trailer’s use also satisfies the second component of the CDL requirement, “used in commerce,” as discussed below.
With respect to a single vehicle, the FMCSA requires the driver to have a Class B CDL to operate that truck, bus, van, or automobile in commerce if that vehicle has a GVWR of more than 26,000 lbs. It is required even if that vehicle is a power unit (truck, automobile, or van) and is towing a trailer with a GVWR of 10,000 lbs. or less. If the trailer’s GVWR exceeds 10,0000 lbs., a Class A CDL is needed if its use also satisfies the second prong of the CDL requirement.
The second prong of the CDL requirement, and of the CMV definition, is much more troubling, much more subjective, and the primary source of the confusion. To qualify as a CMV requiring a CDL, that vehicle, even in a qualifying GCWR/GVWR configuration, must be used in “commerce.” “Commerce” has its own separate definition in § 385.3 of the FMCSA’s regulations. The FMCSA defines it broadly as any trade, traffic, or transportation between points in one state and points in another state or any trade, traffic, or transportation that “affects” trade, traffic, or transportation in the U.S. between points in one state and points in another. Not exactly an enlightening definition, to say the least. How this “use” assessment turns out often varies depending upon who is doing the assessing. And that is often the law enforcement officer on the scene.
As a starting point, the proper inquiry, then, is whether this questionable CMV is transporting property (across state lines) for some commercial purpose, as opposed to for the personal use of the owner, driver, or some other person. What the trailer owner considers his or her own “personal use” may in fact, upon close examination, turn out to be for a “commercial purpose” when viewed through the critical eyes of the state or local law enforcement officer. Let’s examine several tricky examples:
The trailer owner is towing his own horses to a horse show or his livestock to the state fair where monetary prizes are awarded. That familiar scenario is likely to be categorized as a commercial undertaking or commercial purpose from the vantage point of the diligent state trooper who pulls over the driver looking for that CDL.
Suppose instead those horses belong to a stable whose owner charges the public by the hour to ride them. Another commercial purpose according to a strict interpretation of the term. It does not matter that no business name or logo is displayed on the side of the truck or trailer towing these horses.
Now suppose it is a college student behind the wheel of Dad’s 16,000 lbs. GVWR truck towing his family’s lawn mower around the neighborhood in Dad’s utility trailer to earn a few bucks mowing lawns to off-set that college tuition. He is likely to need a Class A CDL if that trailer’s GVWR exceeds 10,000 lbs. Remember, this is in intrastate commerce – see below for discussion of further complication.
Complicating the question of whether a CDL is necessary are a hodge-podge of state CDL laws, many of which are at variance with the federal law that FMCSA has issued. States are not prohibited from enacting their own state CDL laws, applying them to non-interstate movements (i.e. the trailer does not cross the state line), if those state laws are stricter than the federal law. In theory, the state law of State A might require its residents to have a different class of CDL, perhaps designated as a “Class D,” to tow a 26,000-lbs. GVWR trailer when used for personal use. In the third “tricky example” above, even if the student does not need a CDL under federal law to haul his lawn mower (because the trailer’s GVWR is less than 10,000 lbs.), he may need one anyway because the state law of the state where he resides requires one even to pull a light-duty trailer.
State A must, however, honor the out-of-state driver’s license issued by State B to its residents: for example, if State B does not require a CDL for its residents to operate a vehicle for personal use, then State A may not require a State B resident to have a CDL while operating a vehicle for personal use in State A even if State A requires its own residents to have a “Class D” CDL for this purpose.
The CDL complaints that NATM fields typically revolve around the smaller, medium-duty trailers (between 10,000 lbs. and 26,000 lbs. GVWR) and the debate over personal use vs. commercial use. In sum, assuming commercial use, when the GVWR of the truck exceeds 26,000 lbs., a CDL is required, regardless of the GVWR of the trailer, and when the GVWR of the truck is less than 26,000 lbs., a CDL is required only if (1) that truck’s GVWR and the trailer’s GVWR, added together, exceed 26,000 lbs. and (2) the trailer’s GVWR exceeds 10,000 lbs.
Dealers should be prepared to provide that objective guidance about what tow vehicle-trailer configurations may need a CDL when asked by their customers, but they would be well advised to stay away from declaring, when asked, that the customer’s intended end-use of the trailer meets or does not meet the FMCSA definition of “used in commerce.” This precaution is especially warranted if the trailer’s intended use, as described by the owner, falls within the murky, gray area of personal vs. commercial use or the dealer is unsure about the niceties of the state CDL laws that might apply. It is also important for the dealer to keep in mind that a trailer’s use might be “personal” on one or more trips but “in commerce” on others. Better that the driver have that CDL and not need it than not to have one when stopped and forced try to explain to the officer that this “trip” is really only a “one-off,” a rare exception to his usual personal use.
Dealers should educate their customers on the importance of understanding a trailer’s gross vehicle weight rating (GVWR) and tow vehicle towing capacity. All too often, customers are not familiar with what trailer GVWR or cargo capacity means. Nor are they familiar with what this will require from their tow vehicle in terms of its towing capacity. This lack of information can lead to dissatisfaction if customers fail to complete necessary research before the purchase of the trailer, or if the trailer dealer personnel fails to ask the correct questions to ensure their customer is selecting a trailer that meets their needs and legal requirements.
First, the tow vehicle must be analyzed. What is the model of the customer’s pickup truck, SUV, minivan, or car? All vehicles capable of towing have owner’s manuals with maximum rated towing capacities. What often gets overlooked is "maximum" in this context, which truly means maximum. For example, if a customer has a tow vehicle with a towing maximum capacity of 7,000 lbs., they may not want a 7,000 lbs. GVWR trailer. The customer needs to take into serious consideration the fact that they will be at maximum capacity. Even without accidentally overloading the trailer, the tow vehicle will be working at its maximum capacity and not handle as well. As a result, they could find that their tow vehicle does not have enough power to merge with traffic on interstate on-ramps, to pass other vehicles, or to climb long hills and mountains. Trailer customers end up dissatisfied if they have purchased too much trailer for their tow vehicle. Unfortunately, simply purchasing a larger tow vehicle with a larger towing capacity is not an affordable solution to this problem and preventative measures by the dealer are the best route to customer satisfaction.
Dealers should ask the customer what their intended tow vehicle will be and if they are committed to that tow vehicle for the next few months, the next few years, or just the next few minutes. The customer could be vehicle shopping at the same time they are trailer shopping or may be willing to upgrade in the near future. From there, the trailer dealer can assist the customer in choosing a trailer that their current tow vehicle can handle. Or, in the event that the customer is in the market for a new tow vehicle, dealers can advise customers to purchase a certain category of tow vehicle that meets or exceeds a certain towing capacity threshold. It is a crucial conversation to have at the point of sale as many customers think their tow vehicle will perform adequately towing a certain model of trailer, only to find out too late that they should have either purchased a smaller trailer or upgraded their tow vehicle to handle the larger trailer model.
After the tow vehicle conversation, the topic can turn more specifically to the trailer. Dealers should make sure customers understand that the combination of the shipping weight of the trailer plus the trailer's cargo capacity should never exceed the trailer’s GVWR listed on its VIN. The shipping weight information can be found on the manufacturer’s certificate of origin (MCO), while the cargo capacity is often listed on the trailer’s tire placard.
For example, if a trailer’s GVWR is 7,000 lbs., the customer's tow vehicle should have a towing capacity that is 7,000 lbs. or preferably more. It is also crucial that the customer not overload the trailer. If the trailer itself weighs 2,700 lbs., the customer should never put more than 4,300 lbs. of cargo in it, because 2,700 lbs. plus 4,300 lbs. equals 7,000 lbs. GVWR, which the trailer should never exceed.
Another critical dealer/customer conversation is what cargo the customer intends to tow. If the customer plans to haul a rock crawler SUV and camping gear that adds up to 5,500 lbs. in the example above, they cannot safely do that with the same trailer. The calculation for this example is the combination of the trailer weight of 2,700 lbs. plus the cargo of 5,500 lbs., which equals 8,200 lbs. This means the trailers’ GVWR would need to be 8,200. But, because the GVWR of this trailer is 7,000 lbs., this customer has overloaded their trailer by 1,200 lbs.
If the customer tells the dealer in this example that they intend to haul an estimated 5,500 lbs. of cargo, the dealer needs to explain to the customer that they should purchase a larger trailer with a higher cargo capacity. If the customer says their tow vehicle cannot haul a larger trailer, then the trailer dealer needs to explain to the customer they need both a larger tow vehicle with a higher towing capacity and a larger trailer with a higher cargo capacity. If this is not possible, the customer needs to find a way to haul significantly less cargo. The customer might be disappointed upon learning this, but later they will be appreciative of the dealer’s honesty, which leads to long term customer loyalty. The NATM Guidelines contain a section on trailer GVWRs.
For more information, contact NATM’s Technical Director Terry Jones.
By Bob Clements and Sara Hey of Bob Clements International, Inc.
If you had one hour a day that you weren’t interrupted, what could you accomplish? Almost anything, right? I want you to pick something that is important to helping you achieve the vision you have set out for your trailer dealership, and commit one solid hour a day for the next week and work on it.
For example, if you’re wanting to create stability in your dealership, your one hour (or power hour, you can call it whatever you want!) may be focused on forecasting and establishing a budget, by department, for the coming year. If your focus is growth, maybe that hour is spent diving into the marketing plan. Everyone’s “one thing” is different, but your “one thing” that you invest a dedicated one hour each day on will move your dealership toward your vision. Just pick one thing that will allow you to move toward your vision.
I’m asking you to commit one uninterrupted hour a day for one week. However, with that in mind, I want you to make it your best hour. This means when your brain is fresh and you are ready to think and work. Are you a morning person or an afternoon person? If you have an afternoon slump, after lunch, that is not the time for your hour. You will just end up on your phone playing games (speaking from experience). So, if you’re a morning person, make your hour the first hour of the day. If you’re not a morning person, find the time you are most alert and ready to get to work.
At this point, shut your door and tell your people that unless 911 has to be called, they cannot bother you for the next hour. Guess what? Everyone will survive for one hour each day without you. If a problem comes up, they will either figure it out or they will wait, and you will have held an important boundary. Way to go! Now, pick your one thing and get to work.
Are you needing a little more guidance on where to start? Here’s what I want you to do: write the name of each department represented in your dealership and the words “Stability,” Growth,” and “Accountability” under each department.
For each department that didn’t generate a profit last year, I want you to circle the word “Stability.” If what you are doing isn’t making you money, you need to either stop doing it or figure out how to make money doing it.
If you circled “Stability” under any of the departments, this is where you need to begin making changes and where you need to spend your hour. There are several things you can do to begin to create stability, but to get you started we will outline at least one suggestion per department.
Keep in mind, as you read through these suggestions, I don’t expect you to tackle all these today. If you did, you probably wouldn’t do any of them well, which will only leave you frustrated and yelling. Pick one item and use your entire one hour of time a day, every day, until it gets done. Then, and only then, do I want you to move on to the next one. My guess is that you, like many entrepreneurs, have a list of great ideas and projects you have started but never finished because something else that was shiny and exciting caught your eye. If you want to be the solution, you need to pick one item in one department and commit to spending your hour on it, until it’s completed.
Service: When working to achieve stability in the service department, the goal of most dealerships is to measure the right numbers. In order to get the right numbers, you must have the right data. This starts with your technicians clocking in and out of work orders. Yes, there are other numbers you should be looking at, but everything is built on your technicians’ time.
Parts: As you think about parts, start with your margins. Your target margin will vary based upon the equipment you carry, but all the targets should be at or above MSRP unless you have handpicked them as lost leaders so you can draw people in who will then buy more expensive parts. Don’t forget that MSRP is a suggestion and determined by turning a part four times a year. If a part is turning less than four times, the part’s price should be above MSRP.
Sales: Stability in sales begins by measuring the activity of your salespeople. We require every salesperson to make a minimum of twenty touches a day. This could be a phone call, email, or someone walking in your door.
Now, as you look at your paper, identify which department has the potential for growth. For sustained growth to occur, the department needs to be stable first. Yes, you can have growth in a department, but a lack of stability will make it a never-ending nightmare for you. So, which departments are ready for growth? Here are suggestions, by department, that can help you generate growth.
Service: Growth often happens when the people you have are being utilized to their full potential. This can happen if you bring on a service coordinator or roll out a compensation plan based upon efficiency for your technicians.
Parts: Growth in parts occurs by providing training for your parts people, helping them to become parts salespeople, and teaching them skills such as upselling and cross-selling. By implementing upselling and cross-selling, this alone can produce growth up to 35 percent in the parts department!
Sales: The key to growth in whole goods is having a marketing plan that mimics how and when you need increased sales. If you know that 20 percent of whole goods sales happen in April, you need to be spending 20 percent of your marketing budget four to six weeks before you expect to see the sales occur.
The last category is “Accountability.” Look at the departments you’ve listed and ask yourself, “Are there any departments that have achieved stability and growth?” If the answer is yes, it’s time to set accountability goals for the department.
Service: For the service department you might begin by having regular meetings with your team to share numbers and financials. When your entire team is aware of the common goals and what needs to happen in order to achieve them, it creates accountability for both them and you.
Parts: In this area, you may need to develop a plan to burn down your parts inventory at the peak of season. This accountability frees up cash flow during the slow season but also gives you the ability to place orders with your manufacturers in a way that gives you the best possible discounts.
Sales: For many of our dealers, a goal of sales accountability is an intense focus on the little things. This can be as simple as making sure all customer information is inputted into your CRM. This is often one of the things that salespeople can get lazy on, and its effects are wide-reaching.
While each one of your departments may be at a different point of maturity in your dealership, it’s important to keep in mind that you must start with one thing. Your first focus should be to get each department to a place of stability, and from there you can determine a plan for growth and accountability.
A healthy and profitable business is powered by healthy and profitable departments. Taking a one-hour challenge every day will allow you to move your dealership to a place of you running it instead of it running you.
For more information about improving your trailer dealership, visit www.bobclements.com.
This article is an excerpt from the new book, You’re the Problem (and the Solution), by Bob Clements and Sara Hey of Bob Clements International, Inc. For more information, visit www.bobclements.com