Success for one Jacksonville, Fla., -based WD stems from three primary beliefs: a willingness to service any type of customer, having enough flexibility to service them appropriately, and maintaining internal financial accountability.
According to David Honig, president/CEO of The Parts House, his company’s ability to be flexible is partly due to its purchase of its computer system’s source code. This allows the company to write programs, specifically geared to a customer’s particular needs — for instance, allowing customers to see vehicle numbers, what parts they’re buying and how many they’re using, or helping them adopt a particular billing format.
“We bought the source code so we can modify it as we deem necessary,” Honig says. “We do this for larger chains, fleets and folks who want control over their purchases or who want to be able to see what they’re purchasing in some different formats. You could buy computer systems geared towards automotive parts businesses, and they’re very functional. Because we felt we had some specific needs that were a little bit different, we wanted to have control.
“We feel like it really does help [in getting and retaining customers], and our sales folks have confidence that if a customer has a specific request, we can typically honor it.”
For the most part, The Parts House, which has 18 wholesale warehouse locations in Florida, southern Georgia and Puerto Rico, sells traditional hard parts to new car dealers, fleets, multi-store tire and retail chains, telephone companies, export companies, and even to airlines for their ground service equipment. The company also will occasionally source inventory for certain contract customers.
“There isn’t a whole lot of business out there that we haven’t tried to sell or have sold to in one aspect or another over the years, and we feel this broad experience has helped us,” says Honig. “The business was always like this — willing to get new customers. We’ve never really been a traditional WD selling to jobbers. We’ve always been a niche marketer and still take pride in being able to do that and in being open-minded enough about potential customers other than the traditional auto parts store.”
Another area the business now thrives in is its financial finesse. Though The Parts House has many times changed owners, these experiences have strengthened the company in as far as fiscal responsibility.
Honig explains that the previous two owners, in particular, were very corporate-oriented — much larger businesses that instilled a certain amount of financial discipline that the company may not have had otherwise.
“Having been part of bigger corporations, we’ve had the advantage of seeing what they do and some of the benefits of some of the things they do,” Honig says. “There is some value to good financial reporting and discipline.”
Prior to large company ownership from 1989 to 1997, The Parts House was a family-run business and the owners were less financially focused. But when larger entities took over, the business then had to adhere to strict financial reporting requirements and discipline.
Honig says his team closely monitors its financials by location. “We very closely monitor our payroll as it relates to revenues and gross profit by location and we really believe in as much financial data as we can possibly get for each location. We run financials for every location every month and really manage those reports.”
Honig says particular attention is paid to payroll, which has to stay within a certain range relative to gross profit “or you’ve got to make changes,” he explains. “A lot of times with organized growth, you don’t necessarily keep up with accounting requirements.”
Honig also adds that employee longevity has been a benefit, especially since his company has been through so many changes in the past.
Honig, who’s been with The Parts House since 1982, started out by working in the warehouse while working on his master’s degree. He says the owner at that time told him to learn the business. The owner also liked to promote from within.
“I never thought that 22 years later I’d still be in the parts business,” he says. “And there are a half dozen or more people in the company who can tell you similar stories.” And he means people like the chief operating officer and the top salesman, who also began at the bottom level of the business and worked their way up.
“We’re very proud of the fact we have a number of people who have been with the company for a long time and who’ve been with us through all these different owners,” says Honig. “There’s some stability that comes with that that I think can be advantageous to our customers.”
The Vital Stats
Years in business: Since 1970
Revenue: About $100 million per year
Growth plans: “We think we have great opportunities to grow. We’re lucky to be in a market like Florida, and the southeast in general has so much growth. We’ll continue to open locations geared toward our installer customer base in an effort to service our customers better.”
Number of warehouses: 18
Snapshot of The Parts House’s history: From 1970 to 1984, it was owned by the founder and was primarily a car-dealer expeditor. In 1981, the company joined the Parts Plus association and began to service Goodyear stores near Jacksonville, Fla., out of its one warehouse. In the early ’80s, The Parts House had four retail stores, which were sold to Discount Auto Parts. In 1984, the founder sold the company to a local investor, who opened the business’ first branch location in Miami in 1985. From 1985 to 1989, the company grew, having opened about five Florida locations. In 1989, The Parts House was bought by an investment group owned by a large Chicago-based company. The business continued its growth by making some acquisitions in Florida. In 1997, The Parts House was sold to the Parts Plus Group. It continued to grow by opening various locations; and finally, in 2002, the management team of The Parts House purchased the company from the Parts Plus Group.
Number of employees: About 320
Wholesale/retail ratio: 100 percent wholesale
Competition: NAPA, Tropical International, Cold Air, FAD
Affiliation: Parts Plus and ACDelco Dedicated Distribution Group (DDG)
Facility size/locations: From 5,000 to 80,000 sq. ft./18 warehouses.
