Capricorn is bigger than you think

News Extra

Capricorn is bigger than you think

The quietly powerful Capricorn Society Limited has been around since 1974 when 12 Perth Golden Fleece service station owners banded together as a co-operative to get a better deal. Now Capricorn reaches into three countries. Its 10,000 members include 1000 Australian smash repairers - and growing.
Any organisation to which 1000 Australian smash repairers belong is significant, but when that organisation has attracted 1100 suppliers, all prepared to give discounts, and turns over $460 million annually, it demands attention. Business Review Weekly magazine ranks Capricorn Society as one of Australia top 100 private companies.
The Capricorn Society is an automotive parts buying cooperative. Its 10,000 members are in Australia, New Zealand and South Africa. They are automotive mechanical repairers, smash repairers, auto electricians and service station proprietors.
South Africa and New Zealand account for less than 12 per cent of the membership, meaning that Capricorn is predominantly Australian. Victoria and Tasmania account for 27 per cent of members, Western Australia 22 per cent, South Australia and NT 15 per cent, NSW 13 per cent and Queensland 12 per cent.
Membership begins with an applicant member purchasing $500 worth of shares, after which a personal Capricorn account number is issued which gives access to instant credit with Capricorn suppliers. Members are also given a directory, 'the purple pages', which details the suppliers with whom members can use their Capricorn account. The members' credit is guaranteed when they purchase from any of Capricorn's suppliers ? which saves having to fill in account applications. Members don't have to buy from Capricorn suppliers, but when they do, all their invoices are consolidated into one monthly statement payable to Capricorn.
Members can increase their shareholding in the cooperative if they choose. They earn a dividend of between seven and nine per cent.
Besides simplified accounting and better prices, Capricorn members enjoy other benefits. Capricorn owns Abernethy Travel, which organises very attractive travel deals for the annual convention ? as well as other travel. Capricorn members also receive a share of the surplus of the cooperative based on their individual annual turnover figures. In addition, purchases earn reward points which can be redeemed in various ways.
If members, with at least six months membership, are buying equipment as distinct from consumables they can apply for extended credit.
The latest member benefit to be added is the availability of Capricorn Mutual Limited ? where they can get insurance coverage for buildings, contents, public liability, professional indemnity, motor vehicles, personal household and personal motor vehicles.
This aspect of Capricorn's business has been attacked by some regular insurance companies on the grounds that Capricorn is not bound by the rules applying to insurance companies and therefore should not be relied upon to pay claims. Capricorn Mutual counters that by saying that it is underwritten by one of the world's leading re-insurance companies. In its first year, Capricorn attracted 2500 policy holders from its membership ranks and met claims totalling more than two million dollars.
Although Capricorn's motor insurance is in its infancy, it has already established clear differences in the way it does business compared to other insurance companies. It out-sources assessing and favours its own members when deciding where a car is to be repaired. Producing a top grade repair is more important to Capricorn than cutting quotes to ribbons ? because there are no public shareholders to satisfy.
One may well question why purple pages suppliers are willing to give discounted prices to Capricorn members and then give another substantial settlement discount when their bills are paid by Capricorn. The answer is in the volume that being a Capricorn supplier brings, and the fact that suppliers can bank on being paid in 30 days ? rather than an extended delay sometimes suffered when invoicing panel shops directly. Rather than searching out suppliers, Capricorn has a waiting list.
The way the co-operative works makes Capricorn highly profitable. It is able to support over 100 staff and still have money left over for substantial rebates and benefits to members. The major advantage of the structure is that it does not exist to return dividends to shareholders, but instead to its members. All profits automatically go to the members in one form or another.

The society is headed up by Trent Bartlett. He joined as CEO in 2001 after 25 years executive experience in retail. His strengths lie in strategic planning, marketing, and supply chain management.
Of the six members who comprise the top management team, Bob Jenkinson has the closest links to the smash repair industry. As membership development manager, he joined Capricorn in 1992 after 35 years in panel shops. He is responsible for the marketing and promotion of Capricorn Society to members throughout Australia, New Zealand and South Africa.
Management communicates with its members through a high quality monthly newsletter called "Ignition".