A legacy of 'independents'

Not only is Philadelphia the land of independence based on its role in American history, it is also the land of independents within the aftermarket. In most Battleground cities, businesses without a program group affiliation are hard to find and getting scarcer by the day — but within the Cradle of Liberty, independent stores, repair shops, warehouse distributors and jobbers play prominent roles.

Nationwide disconnected telephones tell the sad story of operations that have come and gone. However, numerous Philly independents are thriving based on their ability to seek out appropriate niches and marketing strategies amid a marketplace with an expanding population base. They line up fleet accounts with car-leasing companies, municipalities and private businesses. Or they provide machine work and other specialized services — including rapid delivery of hard-to-find parts.

Two-bay “gas stations” offering full service are common. Many of these were staples of sleepy rural settlements, known locally as boroughs, which suddenly became neighbors to a shopping mall or corporate campus.

Aftermarket insiders suggest that installer opportunities in Philly are best achieved by erecting repair facilities with a minimum of 10 bays. The best spots can be determined by charting concentric circles from areas of new commercial and residential development.

There does not appear to be a shortage of parts stores in the region, and the fight is on to grab do-it-yourselfer market share.

Philadelphia literally means “city of brotherly love,” yet sibling rivalries are evident within a highly competitive automotive marketplace. This Battleground encompasses parts of Pennsylvania, New Jersey and Delaware. It ranks high in spirit, as people here display a real zest for marketing parts and services with a fiercely independent mindset.

“We have a lot of great people with great attitudes,” reports CEO Gary Hunt as he sizes up the 155 employees at Auto Craft Automotive Products, Inc. “We have a lot of fun and a lot of great customers.” Hunt’s operation based in King of Prussia, Pa., consists of 12 stores selling to retail and wholesale customers.

It’s a general consensus within the Philadelphia marketplace that the wounds suffered by failing businesses are largely self-inflicted. Either management failed to move quickly enough when making strategic adjustments based on changes within the competitive arena, or they simply fell short in offering basic customer service standards desired by an increasingly upscale population demographic.

This marketplace could be receptive to business management courses. Most, if not all, of the training programs offered by WDs and jobbers to installers consist of technical content only — little ownership-oriented instruction is provided.

The lines between progressive aftermarket entrepreneurs and those who seem to be asleep at the wheel are rather sharply defined. This trend is perhaps illustrated by a disturbingly high number of hang-ups experienced during a random telephone survey of the marketplace. Presented with the same introductory greeting, most proprietors were pleasant and forthcoming. Yet others — way too many — vigorously hung up the phone amid nasty remarks. (At least they didn’t shout obscenities like they did in Buffalo.)

The five independent McCabe Auto Supply stores have taken this rudeness factor and turned it into a competitive advantage.

“We’re kindly and friendly to all the salesmen who come to visit us,” explains William Ussler Jr., McCabe’s president. The operation, based in Pottstown, Pa., specializes in selling the latest innovations in parts, accessories and shop equipment. By being nice when people come calling, even if a purchase is not immediately made, “they tell us first” when a potentially hot item is being rolled out.

“We read everything we can get our hands on” to locate the latest offerings, he reports. “We’ll introduce a new product, and we’ll do a bang-up job selling it.”

Ussler doesn’t want to get too specific, fearing competitors will copy his ideas, but his two outside salesmen glean considerable success with their ever-shifting lines of debut products, especially electronic diagnostic gear.

“We sell tons of tools because we get them first,” according to Ussler, a former executive with General Electric who entered the auto parts business by way of an estate sale. “We constantly look for innovation.”

By focusing on the latest items to hit the marketplace, “we do end up with a few bombs,” Ussler concedes. The operation succeeds by being able to make rapid shifts while nurturing a strong word-of-mouth reputation.

“We try to service our customers (better than the competition) because we’re friends,” says Ussler. “We go to the same diner.”

By not belonging to a program group, “It’s tougher price-wise, but it’s not as tough (as one might think) because we have flexibility,” he observes. “We’re very nimble. Nimbility — I’ve invented a new word — is the key to this marketplace. You have to be a tiger.”

Spicing up the market

As with the national trend, more and more women here are handling repair and maintenance scheduling for their vehicles. Busy motorists pressed for time want customer-friendly hours, polite service, clean facilities and reasonable pricing. These factors are compounded by an influx of corporate campuses and a strong consumer desire for convenience related to workplace proximity.

“If they live here and work somewhere else, the other place gets the business,” says Ussler. “The garage owners that are left think they are the king, and they won’t stay open.” Evening and weekend hours are almost a necessity nowadays. “Pep Boys is jammed on Saturdays and Sundays,” Ussler points out, “and these other guys won’t listen.”

Pep Boys has a powerful presence in the Philadelphia marketplace, with 59 stores within a 50-mile radius. In 1921, Emanuel “Manny” Rosenfeld, Maurice “Moe” Strauss, Moe Radavitz and Graham “Jack” Jackson pooled $200 a piece to open the first store at 63rd and Market streets in downtown Philly.

The founders wanted a short, peppy name to fit on the narrow shop’s overhead sign. A shipment of Pep Valve Grinding Compound inspired “Pep Auto Supplies.” The Boys moniker came from a cop pounding the beat at 63rd and Market. Each time he stopped a car at night for not having an oil wick burning, he would tell the driver to go see the “boys” at Pep for a replacement.

Over the years Pep Boys grew into a $2.2 billion company with national stature, and it remains a measuring stick of sorts within its hometown aftermarket.

Other chains are here too, of course, and the high-profile operations compete — and do business with — the independents. NAPA has 31 locations within 50 miles of the city’s center, compared to 15 for CARQUEST. AutoZone has close to 50 stores; Advance Auto Parts has slightly more than 30. Goodyear markets through 200 outlets, followed by Firestone’s 194 sales and service centers. Midas has 74 locations, Meineke 61.

The smaller parts enterprises sell plenty of merchandise to their bigger-named brethren while attempting to avoid direct competition on pricing. “Pep Boys, AutoZone and Advance are our customers, and the customer is No. 1,” says Hunt at Auto Craft, which belongs to the Aftermarket Auto Parts Alliance program group.

Generally the market for “fuzzy dice” (appearance accessories) is ceded to the discounters, as are DIY “easy parts” efficiently obtained with a single computer lookup or do-it-for-me components routinely installed without requiring advanced diagnostic efforts.

Many business owners share Ussler’s independent attitude regarding the chains, pointing to the war of radio, TV and newspaper ads among larger players. “One guy will have a part for $1, another has it for $1.10 and I pay $1.98 for it,” he observes. “The $1 guy gets the business.”

They really know how to market to the retail segment, says Hunt of the discounters. Their entrance into the WD and jobber realm is a different matter, however. “None of them understand the thoroughness that you need for the installer business,” he contends.

Providing prime service is a key goal of WDs and jobbers faced with pricing pressure. “If we can’t take care of them quickly and competently, they can’t take care of their customers,” explains Hunt.

Thus, big and small operations co-exist within their niches. “They may be on the popular corner, but we may be located behind the building,” Hunt muses.

Making a presence

From Boston to Washington, D.C., the Eastern Seaboard is rather densely developed. Pennsylvania is known as the Keystone State based both on its central location and its central role in the Revolution. (A keystone is the top piece of an arch that holds it together.) Philadelphia’s region, called the Delaware Valley, is certainly a key aspect of the nation’s economy and culture.

The metropolitan area includes portions of Delaware and New Jersey. Some people in Pennsylvania claim most of southern New Jersey as a Philly suburb. The Jersey Shore is an hour’s drive and New York City can be reached in less than two hours.

According to U.S. census figures, the Philadelphia region has the third-highest commute times of any American city; the average journey to work exceeds a half-hour in travel time.

At Valley Forge in Chester County, 2,000 of Gen. George Washington’s soldiers died of exposure or disease during the brutal winter of 1777-1778. Wicked weather conditions remain, and the freezing-thawing cycles wreak havoc on the region’s roads — resulting in a steady flow of vehicle repairs due to run-ins with potholes.

The Delaware Valley’s economy is extremely diverse, ranging from heavy industry to high technology. The manufacturing sector has been decimated by conditions seen throughout the Rust Belt. High tech and other skilled positions are driving considerable growth in a region containing both dense inner cities and rural wide-open spaces.

Camden, N.J., ranks sixth among Inc. magazine’s listings of the “Top 25 Cities to Do Business in America for Entrepreneurs.” (Oddly, the City of Philadelphia just across the river sits in the bottom 10 when compared to 277 communities.)

Sustained job growth is a key factor, as are low housing and commercial real estate costs, business-friendly city governments and an affordable cost of living, according to Inc.

Camden’s Riverfront is undergoing considerable re-development, which may present opportunities for the aftermarket, according to Ted Dorand, regional director of economic development for PECO Energy, an electric and gas utility heavily involved with the Positively Philadelphia association.

“Pep Boys and NAPA are already there,” says Dorand, adding that “more and more retailers are making a presence — it’s a very strong retail market.”

AutoZone is on the move here. Just recently the company purchased 12 ABC Discount Auto Parts stores headquartered in Camden County. Founded in 1957 and owned by Lou and Carla Fishman, the chain had locations throughout eastern Pennsylvania and southern New Jersey.

The area is under-penetrated, according to Michael Archbold, AutoZone’s chief financial officer. “This is a great opportunity for us to grow in the Philadelphia and New Jersey markets with the addition of these stores,” he says.

Another urban aftermarket opportunity may be unfolding in Northeast Philly. Five development teams have submitted proposals to turn the old 130-acre Byberry State Hospital grounds into a new residential and office development. A decision is due soon and planners say the project is going forward.

Located along well-traveled Roosevelt Boulevard, the property is designated as a Keystone Opportunity Zone, which gives companies that move there certain breaks on state and local taxes.

Already in place is Blatt Tire and Service, a Firestone dealer on Byberry Road. Sited within two to three miles of the old mental hospital grounds, manager Joe Ippolito says his seven bays are already busy, observing that “it certainly won’t hurt to have other people moving in here.”

Installers, WDs and jobbers may be able to obtain maintenance business through an initiative moving forward with the City of Philadelphia. Currently its municipal fleet of 6,000 vehicles is the largest among the nation’s cities, and just recently it has joined with PhillyCarShare in a pioneering program to eliminate 400 of them from the motor pool.

“This is the most comprehensive, constructive and progressive fleet reduction effort I’ve seen during my 30 years with the city,” says Robert Fox, administrative services director for the Office of Fleet Management.

“We’re very proud of the city’s groundbreaking efforts,” says Tanya Seaman, PhillyCarShare’s executive director. “Philadelphia will be a model for cities throughout the U.S.”

Under the program, municipal employees gain 24-hour access to PhillyCarShare’s fleet of hybrid gas-electric sedans and fuel-efficient wagons parked in 17 locations. Each worker receives a personalized “key fob.” Instead of being assigned a separate city car, employees reserve a fleet vehicle on an as-needed basis for as little as 15 minutes or up to several days. Usage is tracked via on-board computers.

A decent influx

Philly’s metro region is home to more than 80 colleges and universities. And as the manufacturing sector diminishes, businesses requiring advanced education are becoming prevalent. “Within the past several years we’ve seen a decent influx of more people moving into the area,” says Dorand. “The vast majority of these jobs are in excess of $50,000 annual salary.”

Biotechnology and pharmaceuticals have a significant presence. “We’re like America’s medicine chest,” says Kevin Adams, a planner/analyst with the Delaware Valley Regional Planning Commission.

Growth benefits are being seen in Delaware’s New Castle County along with New Jersey’s Camden and Gloucester counties. In Pennsylvania, Montgomery, Bucks and Chester counties are growing, with Lancaster County poised for major development within a decade or so.

Within the above areas, a farmer can earn more money by simply selling the land than he or she made throughout an entire agricultural career.

According to Adams, the Philly area does not have the types of “edge cities” seen in other metropolitan areas. Instead, corporate campuses, malls and assorted retail are dotted throughout small boroughs dating back to the 1600s.

Lancaster, the oldest American non-coastal community, is Pennsylvania Dutch country. Because the Amish and related sects practice a simple life devoid of automobiles and other modern conveniences, significant numbers are selling their lands to move elsewhere. (Car-buggy accidents are especially horrific.) At the same time, Philadelphia is expanding westward. Look to Lancaster for future expansion.

“It’s been growing and growing for the past 15 years,” says Tom Hendrickson, parts specialist at Nolt’s Auto Parts, which has eight stores throughout the county. A member of Parts Plus, the operation has three salesmen on the road and a speedy force of five delivery drivers. They sell to other retailers, Goodyear, Sears and a bevy of independent shops.

“We took over a dying business,” Hendrickson reports, referring to the store’s previous family ownership. “We took over what they lost, to put it politely. We’re still trying to rebuild that market.”

The anticipated influx of development is welcomed. Currently, Lancaster’s parts scene is tight and tough. “They’re (Pep Boys, AutoZone and Advance) new school, ‘If it’s not in the computer, we can’t get it,’ and we’re old school. We go the extra mile to help people find their parts,” he says.

Government bodies throughout the Philly region are offering economic enticements to attract more private-sector growth. A recently approved Pennsylvania economic-stimulus package with $2 billion in grants, loans and guarantees is designed to start new businesses and help existing companies expand.

Montgomery County

nPopulation: 750,097n Median household income: $60,829

During the 1990s, Montgomery had the highest population growth rate in Pennsylvania. It leads the state in per-capita income at $42,431, based on 1998 figures.

The country’s second-largest shopping mall is in King of Prussia, and pockets of big box discounters and corporate office parks are spread throughout suburban housing and small-town quaintness.

As an example, an astute aftermarket insider sizes up the activity surrounding Quakertown. “If you go into Quakertown they’ll eat you alive with auto parts, but if you go out six to eight miles there’s new development.”

Much of Montgomery is DIFM-oriented, with spots of high DIY activity, according to R.L. Polk & Co.

With some 100 people moving into the area around the community of Glenside each month, “we do moving targets” with mailed advertising circulars sent to each newcomer, says Kevin Fitzgerald, vice president and general manager of Fitzgerald’s Tire and Auto, Inc. Founded in 1945, the store on North Easton Road has 13 bays serving a customer mix of 90 percent retail and 10 percent wholesale. “It’s a healthy and very competitive market,” Fitzgerald says.

“Good managers are making out well here,” says Ussler at McCabe’s in Pottstown. The chain came with an estate that Ussler purchased at about the same time his employer, General Electric, was encouraging him to relocate from the region to another management position. He wanted to stay in Philly.

The McCabe family let Ussler keep the name and he instantly found himself in a new career. “It was a total culture shock, and it took me a couple of years to calm down,” he recounts. “Financially, it’s a draw; emotionally, I’m far ahead. If you’re high-up in an organization you spend too much time covering your rear-end. I was spending too much time covering my rear-end. Here, all I have to do is fight with the competition.”

In keeping with Ussler’s aforementioned “nimbility” factor, he reacted to newer neighborhoods of $400,000 homes by actively pursuing vehicle maintenance needs of auto sales and leasing outlets.

“We do a fair amount of business with new car dealers,” says Ussler. “That’s a gold mine! If you do the new car dealer right — or any fleet — you’ll do well.”

DIFM service centers are another sales target, especially those in the commercial clusters. “If you have a gas station next to an industrial building you’ll have five mechanics working all day,” Ussler explains.

Also, Ussler senses an upsurge of DIYer interest among younger Montgomery motorists annoyed with high prices charged by some of the independent shops. “This is a whole new generation,” he points out. “They’ll get stung with a $1,000 brake job and they’ll say, ‘Forget it.’ It might take them a week to figure it out, but they’ll do it. Everyone going through school now can operate a computer, and they’ll buy a hand-held instrument to tune their car and think nothing of it.”

Diagnostics and marketing conditions are posing a threat to smaller operations, according to Dan Schwartz, co-owner of Liberty Auto Parts in the county seat of Norristown. Within a decade, “the independent parts store is going to go by the wayside, and the independent garage is not going to be able to afford the equipment to work on their cars,” he predicts. “I see less and less being done in independent garages. I see cars as being more and more unrepairable — they force you to go to the dealer.”

An independent itself, Liberty fights the fight by focusing on antique and specialty parts, plus they service tractors, forklifts and other industrial engines.

“If you need ’57 Buick parts we find them,” says Schwartz. “We offer our know-how and machine shop service.”

Long hours and careful management are top strategies at the two-store Bob’s Auto Parts, based in Conshohocken. “We offer hot-shot delivery and we’re here weekends and nights,” says Deborah Ferri, office manager at the family business.

The company, with an 80 percent wholesale trade, belongs to the AIM program group and the Philly-area Professional Organization of Jobbers Association, which has 16 members. At Bob’s they consider themselves independent following the demise of Big A. “We said, ‘Let’s see what the independent side is like,’” Ferri recounts.

The purchasing requirements under their longtime Big A association had presented competitive problems for them. “With AIM, you don’t have to buy every single line,” she explains. “We have to buy better. With this, you can pick and choose.”

Third-generation owner Dana Albitz at Albitz Garage, Inc. of Pottstown aggressively seeks fleet accounts. Established in 1930, the seven-bay ACDelco installer has accounts with government bodies, prisons, corporations, leasing companies and contractors. “I go out and drive around looking for spots that are developing or starting to grow,” he says.

The company specializes in electronics and transmissions, and DIFM retail is garnered through word-of-mouth and a consistent cable TV ads featuring Albitz and service writer Michelle Berkey.

“My shop sits on the 422 corridor, which is growing by leaps and bounds,” adds Albitz, who concludes that high quality work and attentive customer service are the real drivers of the business’ success.

Bucks County

nPopulation: 597,635nMedian Household Income: $59,727

Bucks County has bucks. As a hotbed of invention and entrepreneurial might during the industrial revolution, there are old-money families here dating back to Colonial days. They are being joined by developments of “McMansions” housing a population influx that’s expected to increase 25 percent by 2025.

Many of residents make the hour-and-a-half commute in leased cars to high-paying jobs in New York City. Bucks County was hit especially hard by the 9/11 attacks.

The distribution of wealth roughly follows the names applied to the county’s three sections: Upper Bucks, Middle Bucks and Lower Bucks. Lower Bucks is more densely populated and aligned more with the city. Upper Bucks has big country estates and Middle Bucks houses the upper middle class on disappearing farmlands.

“It’s booming all over the place,” says Bob Back, owner of South Main Tire & Auto of Doylestown, the county seat. “We’re in Middle Bucks,” he notes while explaining that his repair and retail parts business is up 20 percent over the past two years. The operation includes an attached Performance Unlimited speed shop.

According to Polk, much of this area is solid DIFM. The Yellow Pages list close to 40 operations offering installations.

First call at South Main, actually now located in a newer facility on Old Easton Road by the airport, goes to Eastern Auto Parts Warehouse, which has three locations in the county — Doylestown, Bensalem and Langhorne.

Chester County

nPopulation: 433,501nMedian Household Income: $65,295

Like Montgomery and Bucks, Chester is a hotbed of development. The diverse economy includes agriculture, manufacturing, financial services, pharmaceuticals, technology and other types of business.

“There’s plenty of work here for everybody,” says Rob Richardson, owner of Rob’s Auto Repair on South Hanover Street in Pottstown, which is across the Schuylkill River from Montgomery’s Pottstown.

Within the aftermarket, “it’s strictly do-it-for-me,” he reports.

As an ACDelco certified installer, Rob’s benefits from the company’s radio ad campaigns that mention all the Philly outlets on a rotating basis. The impact of the spots “is hard to say because we’re busy all the time,” Richardson says.

Rob’s has a mailing four times a year and a customer newsletter. Early pickup and drop-off is provided, and rides are given within a ten-mile radius.

The business was previously located in Montgomery County, but a bigger site beckoned in Chester. First call goes to the Colonial Auto Supply Co. of Fort Washington, followed by Gilbertsville Auto Supply, both in Montgomery.

Air conditioning and electronic accessories are the focus of Banghart Distributors on South Bolmar Street. Tom Banghart, owner and president, says competition is held at bay “by doing a better job than they do.”