Stadium Auto Parts celebrates 70 years
Denver—When Hyman Wright opened his automotive recycling business in the Mile High City, the Colorado Rockies and Denver Broncos didn’t exist. Wright, who opened his business at West 18th Avenue and Federal Boulevard in 1945, named his yard Stadium Auto Parts after his then-neighbor, the Denver Bears’ baseball stadium.
The minor-league franchise and its home ballpark, later known as the famed Mile High Stadium, no longer exist. But the business’ moniker remains viable — with the Denver Broncos’ Invesco Field at Mile High located just across Interstate 25 — and so does second-generation owner Norman Wright’s role as a leader in the automotive recycling industry.
In addition to operating a second yard in Westminster that he opened in 1974, three years after purchasing the business from his father, Wright finds the time to serve on the national board of Premium Recycled Parts (PRP), as chairman of government affairs for the Automotive Recyclers Association (ARA), and as treasurer of Colorado Auto Recyclers (CAR).
“If you don’t have a seat at the table, you’ll likely end up on the menu,” Wright quipped, explaining why he actively promotes the auto recycling industry externally to city, state, and national officials.
Wright said he’s witnessed several major changes in the industry during his 44-year tenure, most notably the importance of accurate data for online procurement, the types of parts being sold, and a shift from retail to wholesale customers.
Several automakers are moving their wholesale parts pricing to dynamic structures that will make pricing aftermarket and used parts difficult, Wright said, since most aftermarket and used pricing on collision parts is based on the OEM.
“We have to have correct data in order to compete,” he said, “and that’s why we need to push CCC, Mitchell, and Audatex.”
Another major factor that’s changed the dynamics of the industry is Fortune 500 competitor, LKQ Corp.
They have forced many smaller yards to close in Colorado, Wright said, adding that their market presence demands that yards operate more efficiently to maintain profitability. The two most important areas for inventory efficiency are data for vehicle acquisition and point-of-sale information.
Having data on which cars and parts are in demand helps stem the trend of parts being sold for less and the high prices of inventory acquisition, Wright said. Parts request information obtained from salesmen aids in weighing what vehicles are in demand, he said.
At any given point, Wright’s yards hold approximately 1,200 total vehicles, with about 130-150 being purchased each month. It typically takes between 18 and 23 days to dismantle a car, Wright said. Vehicles selected to be purged from inventory are crushed on-site and picked up on Thursdays, he added.
Pinnacle and Bid Buddy software help Wright and his crew track how many requests are made for a part, how many are currently in stock, the closing ratio for the requested part, and the gross profit margin.
Such information helps his salesmen provide accurate price quotes over the phone, Wright said.
Since all auto auctions are performed online, the pool of bidders has opened up to an international audience, he said, driving up the prices of totaled vehicles. Some buying pools are also charging double-digit commission fees on the sale price, he pointed out.
“You have to make sure you get volume up and watch costs,” Wright said.
Advancements in vehicle technology, and the cost of tools required to work on them, have virtually eliminated the DIY market, Wright said, adding that the majority of his parts sales are wholesale, weighing in at 85 percent.
Once popular parts, such as brake rotors, drums, axles, and glass, have become so inexpensive at big-box parts stores that the demand for used is no longer there, Wright said. As a result, a major focus for his business is selling engines and transmissions, both used and remanufactured.
Through Stadium’s status as a Team PRP member, Wright said he’s able to sell remanufactured Advanced Powertrain Solutions engines and transmissions, backed by a three-year, unlimited parts and labor warranty. For used engines or transmissions, which often come from a low-mileage late-model vehicle, extended warranties can be purchased, he said, adding that a used unit could be up to 60 percent less than a remanufactured one.
Being one of the 130 Team PRP member yards in the U.S. also has its benefits, Wright said.
“We’re able to offer the same warranties, same shipping packaging, and clean parts the same way,” he said, referring to Team PRP member yards. Inventory access makes buying and selling among members easy as well, he added.
Without quality employees, Wright said he would not be able to operate his two yards, which together employ 30 people, smoothly. Robert Nichols serves as general manager for the Denver location, while son-in-law, Joe Carrigan, oversees the Westminster yard. Daughter Nikki Wright handles collections, marketing, and vendor relations.
A key to motivating employees is offering performance-based pay plans, he said, rather than hourly rates. Salesmen are more motivated to make commissions, managers keep a closer eye on profit margins, dismantlers get paid by the car, and warehouse pullers by the volume of orders.