Denver -- Over the last few years, consolidation has affected nearly every corner of the aftermarket. Program distribution, arguably the backbone of the aftermarket, is not immune to that trend. Star Automotive Warehouse of Denver has emerged from a storm of change for the better, said Star General Manager Dennis Smit, who manages the full-service parts warehouse that is now a part of the Automotive Distribution Network (ADN).
The network is a result of several mergers that started with Uni-Select USA and Middle Atlantic Warehouse Distributor Inc. (MAWDI) in 2004, Smit said. That merger was the catalyst for another the following year--Independent Auto Parts of America (IAPA) and Parts Plus--which created what is now known as ADN, which includes 47 members with 242 WD locations and more than $2 billion in annual sales, he said.
This year, Star Automotive Warehouse is making the final transition under Uni-Select USA by changing its name to Auto Plus, Smit said, adding that some will continue to do business as Parts Plus, and other warehouses across the country will also shed the Star and MAWDI names.
Smit pointed out that Colorado is highly competitive market for wholesale parts. But he said he applies in his daily operations a rule he once learned from Pete Kornafel of CARQUEST, who authored "Inventory Management and Purchasing: Tales and Techniques from the Automotive Aftermarket."
That rule: When servicing a customer there are three points of emphasis--quality, price, and service, Smit said. "You can choose any two, but you can't have all three. Our main emphasis is trying to provide quality parts with excellent service and not get in the pricing game. If you need parts that are cheap, then the service or the quality of the counterman will suffer.
"We have a strong emphasis on serving independent jobbers," Smit said. "The ones that are left are strong. Today we're doing more volume with fewer customers." In addition to serving jobbers in southern Wyoming, western Nebraska, western Kansas, and Colorado, he said he runs two company-owned jobber stores, one at the Denver warehouse and a second in Eagle.
Selling to the installer is something that Smit said he knows well, having started his career as a technician. "We allow (independent jobbers) to maintain their own identity and bring the advantage of a group buying program to them," he said. "We offer store signage programs but promote their name before ours."
Smit said he believes the industry has made it through the worst of its consolidation and that the repair shops and jobbers that continue to do business are strong. "The people that are left are the survivors," he said.
"In most markets, a strong independent can compete with corporate-owned stores," Smit said. "The advantage is that owners have the ability to do what you need to do to service the market." However, he added, those stores must have quality counterpeople, access to inventory, and a quick reaction to market conditions. "If you want to grow your business, you have to take it away from somebody else."
Uni-Select's installer program, Auto Service Professional (ASP), adopted from IAPA, allows repair shop owners to select a number of services from their menu, including training, credit card programs, emergency roadside assistance, and a coast-to-coast warranty. "The uniqueness is that the majority of services are on a menu-based program," he said, letting owners select the ones that apply to their business.
Smit said his mix of inventory is composed, in part, of the brand preferences in his region. In Colorado, for example, Gates is the right brand to carry for rubber belts and hoses, he said. Many people in the aftermarket have a relative or someone they know who worked or works for the Denver-based company.
Brand preferences carry equal weight with the installer and counterman, Smit said. "In certain instances, installers have faith in a counterman and take their word for it," he said. "Brand preference by the tech usually trumps that.
"The line is being blurred between OE and aftermarket parts," he said, because of all the private labeling that occurs with some program distributors. "It's causing some misconceptions. Our emphasis is to handle brand-name products from reputable aftermarket manufacturers. There is no question who the manufacturer is. We promote their brand."
In addition to carrying the right brands, jobbers must have knowledgeable counter personnel to stay competitive, Smit said.
Counter training is the biggest factor that separates independent jobbers from big-box retailers, Smit said. With a traditional jobber, if you bring in a problem, the knowledge of the counterperson is part of the solution. "It's what separates the professionals from order takers."
The role of the counterperson is becoming more vital to the do-it-yourself and professional markets as vehicle technology advances, Smit said. Traditionally, aftermarket manufacturers have bridged that gap, which, he said, is still happening today.
A good example is with Standard Motor Products, which can flash GM computers with a vehicle's software, Smit said. "The manufacturers will continue to drive technology down the channel."
"Market demand drove us to create a better product, and we did it," he said, referring to vehicle components and technology. "The market will point us in the right direction we need to go.
"It's a challenging time," Smit said. "Our world is changing, and you have to accept it." Regardless of hybrid, electric, or hydrogen vehicles, there will still be a need for replacement parts on future vehicle, such as bearings and wipers, he said.