|First it's Price Increases, Now it's Allocation
Following last month’s barrage of letters from the
majors announcing price increases for finished
lubricants, lubricant marketers are now seeing what
could be the start of a new letter writing campaign.
Specifically one advising them that their supply of
finished lubricants will be allocated.
The first of these letters were penned on February
28 by Shell. That letter advised marketers that
effective March 1, 2006; Shell would be limiting
purchases of heavy duty engine oil, passenger car
engine oil, tractor hydraulic fluid, and natural gas
engine oil to 95% of a customer’s 2005 average
The next letter came from ConocoPhillips, and the
cuts were even deeper.
|Castrol Industrial Implements “Fit for Future”
Castrol Industrial North America Inc. (“Castrol
Industrial”), will implement a transformation of its US
and Canadian industrial lubricants and services
business in the first quarter of 2006, to deliver
greater growth, improved customer focus, reduced
complexity and long-term business sustainability.
The company says segmentation work at Castrol
Industrial has created
clear space for its distributor and direct channels to
grow by complementing each other. Direct sales will
serve certain industries and certain accounts while
the indirect channel will serve all other customers.
|Buy-back Fees Ain’t What They Used to Be!
In less then a year the world of buy back fees has
begun a transformation like non other seen in the
industry before. Whereas buy back fees have
traditional been a flat fee paid to marketers
based on the number of gallons they delivered to
national accounts, that simple and often "unfair"
model is being revamped by some suppliers.
ExxonMobil and Chevron have moved their fees to a
progressive formulaic model. These models
consider a number of variables that truly do influence
the profitability of buyback fees and service
requirments. Moreover, they provide majors
and marketers with a better chance of making
buyback business a win-win for both.
Get all the details of these new buy-back models by
subscribing to the FULL PRINT VERSION OF JOBBERS
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