A major acquisition has taken place over the past few weeks. Zip’s, a significant provider of tow trucks and parts, has taken over accessories company AW Direct.
The merger ensures that a single supplier now exists for almost all of the hardware that towing companies could require. These are companies that not only have a big presence in the United States, but also supply to Canada and other countries.
AW Direct and Zip
Zip’s has moved to ensure customers they should not see any significant changes to the way they are able to buy and receive items through either company. What they have managed to do is get all of the items that AW Direct sells to their warehouse. It ensures an even more seamless experience for towing companies when ordering parts or accessories.
Is the Acquisition a Positive?
There are many ways to look at mergers and acquisitions. Of course, there are certain industries where having one massive company can seem a bit dangerous. The company has total control over what they are selling. But in the case of the towing industry, such a move is being seen as a positive one.
The reason why most experts believe it is a positive change is because Zip’s is now in a position to have a direct supply line to towing companies for all the hardware, parts and vehicles they need.
Many towing companies would complain that if they needed to order many different items, going through multiple companies was a hassle. And it often meant losing out on discounts due to the volume or purchase price of the entire transaction. Now such problems will be eliminated.
Not only do towing companies have one place where they can buy what they need, but they can likely take advantage of the bulk and high total price discounts that Zip’s offers.
State of the Towing Industry
Experts believe that Zip’s has moved at the right moment with this acquisition. While the company is already in a very strong position in the industry, they have now made their position stronger.
Zip’s is now the official and main supplier for towing companies in much of North America. And that means it is almost in a position where failure is not possible. Towing companies will always exist, they will always require vehicles, parts and hardware. And Zip’s will be able to provide these products to towing companies.
It is an expensive move, ensuring the merger was completed. But it is an expense that Zip’s assumes will be covered during the next few years of sales through products that AW Direct would sell.
Towing Companies Embrace Technology
Part of the reason why Zip’s has moved ahead with this merger is because it sees the trendline. More towing companies are beginning to embrace technology. The are beginning to see that tech can not only make their job easier, but it will result in a better customer experience too.
For instance, towing companies are investing in newer and more accurate GPS tracking solutions, which ensure that all cars and drivers are trackable in real time. They are also investing in technology to improve the payment process for customers. All these investments require additional hardware, which companies such as Zip’s will supply.
The acquisition is big news for the towing industry. The complete ramifications will be seen in a few months, when the dust settles. But the consensus for right now is that it is a positive move for Zip’s and the industry in general.
The details of how the acquisition will be handled are still unclear. For instance, there is no news on whether Zip’s will keep AW Direct’s employees or hire their own to fill necessary positions.Read More