An epiphany leads to wholesale success

Jan. 1, 2020
If you can?t beat ?em, join ?em ? but do ?em one better. Loop Road Auto Parts in Garner, N.C., took a cue from the big-box retailers springing up all over the Raleigh metropolitan area and decided to change the way it offers service.

If you can’t beat ’em, join ’em — but do ’em one better. Loop Road Auto Parts in Garner, N.C., took a cue from the big-box retailers springing up all over the Raleigh metropolitan area and decided to change the way it offers service.

First and foremost, according to co-founder Ed Chappell, was to go from “putting stuff on the shelf and expecting people to buy it, to finding out what people want and putting it on the shelf.”

Another element of the renewed commitment to putting customers first was a lifetime warranty program, similar to the purchased service plans Best Buy and other national retailers offer. Chappell notes the program is available for purchase on parts $10 and up, for a percentage of the sales price. However, unlike major retailers that put finite expiration dates on service agreements or offer only one-time replacement, the parts are truly guaranteed for life. It’s a program that stands alone in Loop Road’s market.

“It is a purchased program, not something we just offer across the board,” Chappell stresses. “But as long as you have the ticket, you have the warranty.”

Back to basics

The “epiphany,” as Chappell terms the change in business approach for Loop Road, occurred about six years ago, after he and partners Don Topps and brother Scot Chappell noticed some recurring themes in discussions with colleagues at industry trade shows. At the time, they were running a strictly retail business.

“We listened to some other people who were doing things with their service dealers, your garages and service stations, and we realized there was a big untapped market there,” he says. “We decided we wanted a piece of that market because cars were getting more complex and the do-it-yourselfer wasn’t going to be able to do much beyond a simple brake job. When we came back and tried to put a wholesale program together, we didn’t know what we were doing, quite frankly.

“So we started talking to people, and listening,” he continues. “That’s when we decided to change our whole philosophy from filling up a warehouse of stuff to go out and sell, to filling up a warehouse of stuff people want. And how do you find out what people want? You ask them.”

Loop Road’s outside sales force developed surveys to find out customer needs in the area. A typical survey sample size is about 15 people. It gives them a true picture of the market without breaking the bank.

“It goes above and beyond what most people do, which is buy a line, put it in and then tell people about what they have,” Chappell says.

“What we have found is there is a lot of stuff out there that we sell that we would have never thought about selling.”

Chappell notes there’s no standardized form but gives two examples of how surveying directly benefited his business.

1. Hydraulics: “We sent our salesmen and our hydraulics factory rep out into the field to do a survey, and what we found is that most people these days don’t have John Deere or Caterpillar agricultural equipment. They have Komatsus and Kubotas — that’s all metric, not standard. Having a large contingent of metric fittings available is not something we necessarily would have thought of otherwise.”

2. New vs. rebuilt: “We also found that in the area of rotating electrical, people wanted new, not rebuilt. We had to search for a new line that was competitive in the marketplace.”

Surveying has also helped grow the wholesale side of Loop Road’s business, because the outside sales team visits local garages in person.

“We find out what they need, be it business training, ASE mechanical training, technical training, and we try to fill those needs,” Chappell explains. “Ultimately, part sales come later.”

Most of Loop Road’s advertising has been word-of-mouth, thanks to its longtime presence in the community. Chappell believes that the listening-to-the-market approach the business has taken in recent years only enhances its reputation.

“You build your customers one at a time. You build relationships first, and then you have customers. People don’t believe that, and I used to think it was hokey, too,” he admits. “But it’s the truth. You know the guy’s car, you know his kids, you know his wife, you know where he lives. You build the relationship and then you sell the car parts.”

Today, Loop Road is nearly evenly split among retail and wholesale, which Chappell notes gives both the benefit of good cash flow on the retail side and a solid future on the wholesale side.

When Topps and the Chappell brothers were working for CARQUEST in high school and college in the 1970s, Chappell says just about anyone could “hang a shingle and proclaim they were in the auto parts business.”

Today, both car owners and mechanics are more sophisticated, and Chappell says independents need a niche to survive in the market. In fact, it’s probably the biggest change he’s seen in the industry over the years.

“Pick a niche and go after it, be it foreign cars, heavy equipment, agricultural, filters, brakes, whatever,” he says. Loop Road’s niche, he adds, is to know and to stock the parts other outlets simply don’t have at the ready.

“People say if you can’t find it at Loop Road, you’d better just go to the dealer,” he says. And as for being “a stone’s throw” from several franchised competitors, not to mention CARQUEST’s corporate headquarters, Chappell says he sticks with his niche: “We don’t sell seat covers, and they don’t sell engine bearings.”

The Vital Stats

Years in business: 25

Number of employees: 18

Wholesale/retail ratio: 50/50

Snapshot of Loop Road Auto Parts: Don Topps and brothers Ed and Scot Chappell established Wedgewood Auto Parts in 1978. Loop Road, opened in 1980, was their first satellite store. Four additional stores followed, but the most profitable store is Loop Road.

Affiliation: Bumper to Bumper (The Alliance)

Competition: Advance, AutoZone,

CARQUEST, NAPA, Pep Boys

Facility size: 10,000 sq. feet, including the 2,600-sq.-foot store and a 1,000-sq.-foot machine shop on the premises.