WHOLESALE: Service ensures success
When it comes to competing against a national chain, Chuck McGee, sales manager for Town and Country Auto Parts in Lansdale, Pa., says it's worth it to know thy enemy.
"We first look at what the big-box store is offering," he explains. "Is it name-brand merchandise or more DIY items? Judging that can point you in a successful direction."
In Town and Country's case, the national retailer came to the area with literally the same products McGee's store has stocked for 27 years. He says there was an initial drop in business, about 15 percent, but things turned around quickly; the retailer didn't care whether it was selling to a consumer or a professional.
"The installers realized that we don't compete for the same customer as they do, so we are not a threat, but a partner," McGee says. To sweeten the pot, Town and Country went back to its manufacturer partners for additional discounts "that would get us into the ballpark with the big box," he says.
Eight months later, Town and Country's business is up 13 percent over its last-year sales, when the big store was not in town.
Scott Sapp, owner of Gorman Auto Parts in Tallahassee, Fla., notes that in his market, competition has intensified in recent years — but his company can take the heat.
The key is to have the right people in the right positions, he says, noting that knowledge and enthusiasm can go a long way in building customer loyalty.
"Once we get them in, they come back," he says. "We give them the best service possible."
For wholesalers, Sapp notes, the important issues are service and price. But a dash of fellowship never hurts; Gorman Auto recently hosted a luncheon for its wholesale customers.
Tom Bruyere, director of the Southeastern Michigan Accessory Center (SEMAC) in Troy, Mich., says having a lock as the accessory distributor installer (ADI) for 304 dealerships in Michigan and part of northern Indiana strengthens his company, but it hardly makes it immune to competition. In SEMAC's case, Bruyere sees four distinct competitive advantages: parts warranties that mimic GM's warranty; same day/next day parts delivery; validation, in that each part goes through a rigorous inspection before shipment; and indemnification, which means the dealer is held harmless should a part fail.
There are 41 GM ADIs across the country, Bruyere says, and his is among the fastest growing. In fact, 2006 sales were up 65 percent over 2005. That's especially remarkable, he says, given the economically depressed market in Michigan — although he concedes that it also may be because GM customers tend to be more loyal in its home territory.
Regardless, Bruyere knows he has to work to keep customers satisfied. This month, he's having what he hopes to be the first of several "SEMAC Dealership Accessory School" events. The half-day seminars will be available at no cost to dealers, which can send sales staff to SEMAC's headquarters to learn about new technologies and even overviews of the basics. In the evening, attendees will be treated to a professional sporting event.
"We need to get them out of their buildings so they're not distracted with phones ringing and work to do," Bruyere explains, adding that if salespeople learn more about aftermarket parts, they'll be more likely to convey the importance of regular service and maintenance.
Gorman Auto's Sapp agrees that conveying knowledge, expertise and, above all, a sense of caring about their businesses is essential to staying on top of the game.
"You have to stay loyal to your loyal customers, doing whatever it takes to be there for them," he adds.
Still, Sapp admits he doesn't know what the future holds: "It's a battle every day."
RETAIL: Roll with the punches
In 2005, Jim Preussner, owner of Southwest Automotive in tiny Lemitar, N.M., saw the handwriting on the wall almost as soon as the AutoZone set up shop in nearby Socorro. He had been in business since 1979, but noticed the sales exodus was quick. Today, he's in the process of liquidating the remainder of his inventory.
If there's a silver lining, however, it's that the situation offers Preussner the opportunity to semi-retire. He's currently transitioning to stocking antique motorcycle parts and doing restoration, and hopes to be able to pick and choose his hours of operation. Once the bulk of his auto inventory is gone, the store will be known as Southwest Vintage Cycle.
"The building's paid for and it has a good storefront, parts room and a warehouse in the back," he explains. "I bought out a guy's inventory of Indian Motorcycle parts and am just going to go from there.
"AutoZone hasn't cracked the antique motorcycle parts business — yet," he jokes.
At first, Preussner says, his warehouse distributor planned to buy back his inventory, but fell on hard times itself. "Independents are all going away," he laments, noting that his market's remote location and low population don't help the situation. "You can visually see where the business is going, just by looking at the cars in the parking lot at AutoZone, CARQUEST and NAPA."
Westwood Auto Parts' Barbara Parker notes that the local commercials her husband Donnie has created for their 16 stores have made a huge impact in staying competitive with the bigger chains over the years. By buying direct from manufacturers in many cases, Parker adds, they are able to back up their statement that they "specialize in hard-to-find parts."
"We try to be fair and honest, and that's what works," she says, noting that since Westwood's beginnings in 1962, four large chains have moved in around every one of their stores. "They knew we knew where the market was. But we were there first!" she jokes.
Jeff Hart, president of Auto Parts Unlimited (APU) in Lansing, Mich., says he believes knowledge is the key to competition. When AutoZone and Advance Auto Parts moved into his market about 10 years ago, his sales strategies evolved to keep up.
What helped, he notes, was the pricing program from his distributor, ACI Parts Warehousing.
"Their pricing program allows us to be competitive on approximately 85 percent of the parts we sell," Hart explains, noting that this percentage does not apply to individual lines, but the total number of parts sold. "I have discovered if the part is not an 'A' mover, the pricing is considerably higher. It would appear they buy big quantities of specific part numbers to get a better discount, or they are making up for lost margin on the fast-moving parts. We use the same percentage of markup across entire lines, with just a couple of exceptions."
Hart also keeps copies of ACI's limited lifetime warranties on hand to show customers, to prove their superiority over what other stores might offer.
"I tell customers on the phone to ask specifically what their warranty is," he adds. "A lot of times, they are surprised on how limited it is."
Westwood's Parker notes that even on the retail side, her stores sell at jobber rates to stay competitive. "We don't sell anything list. My husband says we should just sell enough to be here tomorrow," she teases. But on a more serious note, she says, "We also work one-on-one. We don't put out a lot of books and let the customer try to figure it out. We offer our experience."
In fact, Parker adds, employees who have left to work at a big-box chain often return to Westwood. She believes it's because the company promotes a feeling of respect for employees, which gets passed on to customers.
"We say our employees work with us, not for us," she says. "I think that attitude alone has contributed a lot to our success."
Hart believes independent owners have to be hands-on in all aspects of the business. That's what will set them apart from many of the chains, whose employees seem to be there "just for the paycheck," he says.
"Heaven forbid if their computers go down!" Hart says. "They will do nothing until the computers are operating again. The inability to adjust to the circumstances by using handwritten invoices and to look parts up in an actual catalog is very detrimental. I have watched approximately 75 people walk in and out of a chain store with nothing because their computer was down for a half-hour."
APU doesn't have a Web site or sponsor community events, but Hart does sponsor some local racecars during the season, which helps bring in new customers — "mostly the crew people and some other racers." Still, his passion for cars and his dedication to service sets him apart from the rest.
"We sell both wholesale and retail pretty equally, so I only make two sales calls per week and between 10 and 20 deliveries per day," he adds. "I know others in my position would say, 'I don't have time to do that.' To me, that means they don't have time to take care of the customer."
Among APU's three counter employees, there are 70 years of experience. Product knowledge and enthusiasm goes a long way, Hart believes. So does the support of a good warehouse, as ACI supports his store, he says.
"But overall, you need to have knowledge about all of your competitors, your customers and the vehicles they drive — or at least have the ability to find out quickly," he concludes. "To stay competitive, you need to know where to find parts, where to buy deals when you can without going overboard and about what is coming in the near future."
