Tag Archive | "parts suppliers"

Parts Providers Speak Out


When it comes to the parts market, there is no shortage of ideas about how it should be run, but there are some common threads that run through the whole industry. The companies that supply parts to vehicle service contract providers and administrators have built their reputations on delivering the right part in good working order,quickly, and that’s something that doesn’t change no matter who you talk to.

However, the technology that drives that process is constantly changing, and parts providers are adapting. This month, P&A asked several of those providers to offer some insights on the segment and where they think it’s going.

All-Import Auto Inc. is a family-owned business in Texas that has been around since the late 1980s. It has built it’s reputation on providing parts for higher-end vehicles, a niche it has found very profitable. Big “D” Auto Parts is also family-owned and operated, and has been since it was founded in the 1960s. It has chosen to specialize in the VSC market, with an emphasis on being a one-stop shop for all it’s customers’ needs. C&K Auto Parts also serves the VSC market, but it puts a strong emphasis on service. And VRG Automotive LLC is actually a group of recyclers across the country who share a call center, which allows them to route everything to a central location, then ship parts out from the closest facility.

While each company has a slightly different perspective on the industry, there is one common theme that runs through them – technology. The Internet and all of the automated and online processes it brought with it have radically changed the way the parts industry works on every level. And those changes are still happening. All four companies stressed that technology allows them to fulfill orders faster and more accurately, which equates to happier customers.

And the Internet has changed the business in other ways as well – it makes parts available from anywhere in the world, and makes it easy for potential customers to compare prices across a wide range of options. Some parts companies are taking advantage of that shift, looking to become the first place a customer looks, no matter where they’re located in the world; others have chosen to emphasize what else they bring to the relationship beyond price, building relationships based on service and speed. But whichever way they go, all the companies we interviewed are finding success in this new world of parts ordering and management.

To read how each company views the industry and what’s to come, click on their profile below.

Parts Provider Roundup

All-Import Auto Inc.

All-Import Auto Inc.
Keith Sturgeon, owner

Tell us about your company and the products you offer.

All Import Auto Inc. is a seller of used auto parts based in Fort Worth, Texas. We buy and dismantle vehicles and sell parts to auto repair shops and retail customers.

Auto salvage is a family business and I grew up helping out my father, Ron Sturgeon, in his auto salvage company before I started my own as a junior in high school in 1989. I have always been more comfortable working on foreign cars, so I gradually came to specialize in parts for imports.

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Big D Auto Parts

Big “D” Auto Parts
Hugh Pettigrew Jr., owner

Tell us about your company and the products that you offer.

Big “D” Auto Parts was established in Dallas, Texas, in 1963 and has been continuously owned and operated by the same family. We were a full-service auto recycler. Then, in the 1980s, an extended warranty company contacted us looking for a reliable source of alternative parts. Supplying parts to VSC companies is now our largest market. We specialize in used (like, kind and quality) and remanufactured major drive-line components. We also offer most smaller parts.

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C&K Auto Parts

C&K Auto Parts
Mitch Rand, president

Tell us about your company and the products that you offer.

C&K Auto Parts has focused on serving the VSC industry for more than 18 years. Over the years, our product offerings have grown to include a full line of both remanufactured and used powertrain assemblies, the most comprehensive selection of OEM parts (over 21 million unique part numbers) in the industry, as well as a line of aftermarket remanufactured small parts (electronics, brake components, steering components, axles, etc.).

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VRG Automotive

VRG Automotive LLC
Don Partin, president/CEO

Tell us about your company and the products that you offer.

The executive group of Vehicle Recycling Group (VRG) Automotive LLC consists of four owners of some the finest recycling facilities in the country: Nordstrom’s Automotive in Garretson, S.D., G&R Auto Parts in Oklahoma City, Okla., Spalding Auto Parts in Spokane, Wash., and Stricker Auto Parts in Batavia, Ohio. Collectively, they employ over 400 employees and they represent over 200 years in business under the same family names.

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Big “D” Auto Parts


Tell us about your company and the products that you offer.

Big “D” Auto Parts was established in Dallas, Texas, in 1963 and has been continuously owned and operated by the same family. We were a full-service auto recycler. Then, in the 1980s, an extended warranty company contacted us looking for a reliable source of alternative parts. Supplying parts to VSC companies is now our largest market. We specialize in used (like, kind and quality) and remanufactured major drive-line components. We also offer most smaller parts.

How does your service work and how is it different from other parts providers?

Because it is impossible to stock all parts for all cars, we rely on select suppliers to supplement our inventory. Most of the remanufactured units are shipped direct from the factory. However, all of the used parts are processed through our facility. It is our belief that the first impression a repair facility gets when they open a crate goes a long way toward their acceptance and treatment of that part. We check, drain, clean and sometimes paint every part we ship. Since we do not require any action by the shop, we check and often replace seals, gaskets and timing belts. All of the parts we sell have a part-and-labor warranty on the entire unit and that warranty can be tailored to meet the customer’s demands.

Who are your customers? What message would you like to express to them?

We treat a contract holder and a repair facility as though they were our customer. We like to work with VSC companies that are just as interested in a satisfied customer, repair shop, and selling dealer as they are in buying the cheapest part. We are price competitive, but we are more focused on providing good parts and good service which reflect positively on the VSC company.

What channels do you use to sell your services?

We do both online and offline. We’ve done direct-mail campaigns and sent out postcards, and we have placed ads in newspapers and magazines. In addition, we’ve placed banners in online newspapers and magazines, including P&A, and have sent out emails.

But we still get the best results from building a personal relationship with our clients by calling them or by just going out and visiting potential customers and clients. Meeting clients, talking with them, trying to understand their needs and building a personal relationship with them gives us a chance to show them our service and products.

Looking back over the past five years, how has the parts industry changed and how do you see it changing in the future?

Only going back five years is tough, as I think most changes started more than five years ago. One is the increasing availability of aftermarket parts. Another is the reliance on electronics and computers, not only in the parts, but also on the repair side.

What technology or additional services do you believe will drive your future success?

I wish I had some kind of an idea of what was coming.

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C&K Auto Parts


Tell us about your company and the products that you offer.

C&K Auto Parts has focused on serving the VSC industry for more than 18 years. Over the years, our product offerings have grown to include a full line of both remanufactured and used powertrain assemblies, the most comprehensive selection of OEM parts (over 21 million unique part numbers) in the industry, as well as a line of aftermarket remanufactured small parts (electronics, brake components, steering components, axles, etc.).

How does your service work and how is it different from other parts providers?

Our business approach has always been to stress service over all else, from making it as easy to quote an order as it is to submit and complete a warranty claim. Our feeling is that anyone can have the cheapest price, but excellent service will keep the customer happier in the long term.

We have worked very hard, and invested significantly, in both technology and expanded warehousing. We’ve used technology to allow quicker, more accurate quoting to our customers, both when our in-house staff is interacting with the customer and through better websites and integration, which allows the customer to search for the part themselves in a variety of ways. And our expanded warehousing allows us to deliver a large percentage of our powertrain parts within one or two days, which improves customer service and saves our customers a significant amount of money by lowering their rental expenses.

Who are your customers? What message would you like to express to them?

Our target market has always been the VSC administrator. The message might seem clichéd, but it’s true in our view: The customer is always right. From the beginning, we’ve structured C&K to customize as much of our service as possible to the needs and requests of each individual customer. Our warranties are designed to mimic the exact legal language in our customers’ contracts with the vehicle owners, and the warranty lengths are flexible to the point of being as long as the administrator needs them to be. Our IT department can integrate with whichever computer system is being used by the administrator. And since our product offerings are so varied, we can essentially be a one-stop shop, which also saves our customers time in locating the right part.

What channels do you use to sell your services?

We market our services directly to VSC administrators, and try to maintain a visible presence at VSC industry functions and conventions.

Looking back over the past five years, how has the parts industry changed and how do you see it changing in the future?

As the automotive industry was hit by the recession, the bankruptcies of GM and Chrysler, and the slow recovery, the parts industry has become much more competitive. In addition, the VSC industry has matured in its approach to procedures and processes, and technology has come to the foreground.

Providing parts to this industry requires a few key steps, once you have made the list of acceptable suppliers that are able to provide quality parts and stand behind warranties: quickly and accurately quoting both a price and availability, delivering the part quickly to the repair facility (which can be anywhere in the U.S. or Canada), and making sure that the part is correct. Five years ago, it was a time-consuming process that involved handling each quote request individually and numerous phone calls to verify both inventory and shipping times.

Through our use of technology, we are now able to do more than 35 times more daily quotes, and they are much more accurate. In the future, we see more of the same. Technology is simply becoming more pervasive, and every new general advance can be targeted and customized even more.

What technology or additional services do you believe will drive your future success?

Integration and automation go hand-in-hand with our vision of C&K’s place in the industry. The more that can be done by a computer behind the scenes, the faster and easier it will be for the claims adjusters on the front lines to get their jobs done quickly and accurately. Focusing on this has become one of our major goals, and our IT department is growing very quickly.

Expanding our product offerings is our other focus. Advertising and marketing are industries unto themselves, because getting a new customer is one of the most difficult things to do in business. Once you have a customer calling you, it makes sense to make sure you have the product that they want or need. They are calling you to spend money — you better have the product to make the sale.

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All Import Auto Inc.


Tell us about your company and the products you offer.

All Import Auto Inc. is a seller of used auto parts based in Fort Worth, Texas. We buy and dismantle vehicles and sell parts to auto repair shops and retail customers.

Auto salvage is a family business and I grew up helping out my father, Ron Sturgeon, in his auto salvage company before I started my own as a junior in high school in 1989. I have always been more comfortable working on foreign cars, so I gradually came to specialize in parts for imports.

By trial and error and by carefully measuring my cost of goods and sales, I figured out that parts for higher-end cars like Mercedes and BMW were the right niche. Higher-end parts now make up about half of our sales.

How does your service work, and how is it different from other providers?

All-Import Auto is different because we specialize in parts for luxury European autos and because of the service that we provide. We have a zero-hassle return policy on all the parts that we sell and we offer warranties on all the parts as well.

Who are your customers? What message would you like to express to them?

We wholesale used parts to repair shops and retail to individuals making their own repairs. We sell to walk-up clients, deliver parts locally to shops around Dallas and Fort Worth and sell lots of used auto parts on Craigslist and eBay to buyers throughout the world.

The marketing messages are not as different as you might think. We want all of our clients to know that we deserve our reputation for excellent service because we will handle any issues that arise. We also want our target customers to know that we are a reliable supplier of good quality used parts.

What channels do you use to sell your services?

We are part of a nationwide network of 550 auto salvage yards that share inventory information. We broker some parts to other salvage yards through this network, although wholesaling to shops and retailing to people fixing their own vehicles is the bulk of our business.

We also subscribe to part locater services like CarPart.com and fill the requests that are profitable from them. Finally, we have a very active program to sell parts on Craigslist and on eBay. This channel is the fastest-growing part of our business.

Looking back over the past five years, how has the parts industry changed and how do you see it changing in the future?

The parts industry has changed dramatically. The arrival of LKQ has significantly increased competition and the cost of buying salvage vehicles. The companies that dispose of salvage vehicles for insurance companies are eager to get as much as they can for cars. They have made it much simpler for anyone to bid at salvage auctions. As a result, prices for salvage vehicles have increased greatly over the last few years.

The Internet has lowered prices by giving consumers the opportunity to buy parts from many more vendors, but it has also made it much easier for smaller and efficiently run salvage operations to bring niche parts that are economical to ship to a global market. I see tremendous opportunities for growth in online sales of used auto parts.

I think that the industry will continue to consolidate and that online sales will become an increasingly important part of the used parts business.

What technologies or additional services do you believe will drive your future success?

I believe strongly in knowing the metrics that drive my business. I can predict the amount of revenue that the parts from a salvaged vehicle will produce and how fast that revenue will come.
I know exactly what it costs me to fill a parts order so I can focus on the requests from parts locators that I can fill profitably.

Because I am selling more parts online, I am very interested in tools to measure and improve my e-commerce results.Technologies that improve my ability to measure All Import Auto’s performance in key metrics will drive our future success.

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Vehicle Recycling Group Automotive LLC


Tell us about your company and the products that you offer.

The executive group of Vehicle Recycling Group (VRG) Automotive LLC consists of four owners of some the finest recycling facilities in the country: Nordstrom’s Automotive in Garretson, S.D., G&R Auto Parts in Oklahoma City, Okla., Spalding Auto Parts in Spokane, Wash., and Stricker Auto Parts in Batavia, Ohio. Collectively, they employ over 400 employees and they represent over 200 years in business under the same family names.

Each of these facilities provide some of the best recycled, aftermarket, and remanufactured parts in the country. All parts have warranties associated with the various parts, and extended parts and labor warranties are also available.

How does your service work and how is it different from other parts providers?

VRG has created a call center, located in Batavia, where quotes can be obtained via telephone or email. Our goal is to respond to any request within 15 minutes. However, we normally respond on an average of eight minutes. The inventories at the four primary locations are readily available to the call center, plus various other inventory locations of parts suppliers all over the country. This makes it easy for us to quote and ship parts from the closest source to its final destination.

All orders are launched via an electronic order entry system, without having to pick up a telephone. Most small parts are delivered next day, and larger parts such as engines and transmissions are usually delivered within three days.

Regardless of any issues or questions, the call center handles all inquiries. Where the parts are sourced from makes no difference.

Who are your customers? What message would you like to express to them?

Warranty companies, repair shops, new-car dealerships, used-car sales and collision repair shops. We also deal with various inspection services.

What channels do you use to sell your services?

We have an outside sales force, [ads in] various publications and Internet exposure.

Looking back over the past five years, how has the parts industry changed and how do you see it changing in the future?

In the past five years, aftermarket parts for all types of replacement parts have become more available. Like all other types of parts, some are better than others. Our goal has always been to supply the best recycled part in the industry and, when that is not available, to supply the best replacement part available, for a reasonable price. Technological advances in automobiles are definitely creating change in the types of parts sold and the expertise needed to repair them.

What technology or additional services do you believe will drive your future success?

Being able to provide a customer the ability to select and purchase a part without having to pick up a telephone or send an e-mail will be our challenge for the future. The paper catalogs of the past are evolving into the electronic catalogs of the present and future. Creating services to support that type of business transactions will be our challenge as well as our future.

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New Year, New Options: The Benefits of Third Party Parts Sourcing for Claims Administrators


As we quickly approach the end of another year, it’s time for those of us in the Vehicle Service Contract (VSC) industry to embrace the idea of getting “out with the old, and in with the new.” While this phrase can mean many different things to many different people, there is a clear way we can apply the idea of “newness” within our industry—by embracing third party parts distributors. Why limit your claims department to only purchasing auto parts from dealerships, when there are numerous options for purchasing various types of automotive parts (both OEM and Aftermarket) that are available to your customers via a third party parts distributor?

Currently, many claims administrators are only purchasing engines and transmissions from parts distributors and buying all other parts directly from dealerships. While this practice may have been the old standard within the industry 10 years ago, it’s time to start getting the most bang for your buck by taking advantage of new options. These options are created by incorporating parts purchasing from third party companies, like Meridian Auto Parts, into your claims routine. Not only can parts purchased from parts distributors cost substantially less than those purchased directly from the dealership, but you can positively impact your cost-per-claim bottom line.

As veterans in the automotive industry, we have a lot of experience working with claims administrators to help fill their needs for quality automotive parts. Recently, we spoke with a group of administrators, and asked them to provide us with an estimation of how much they were spending on parts purchased strictly from dealerships. While we can’t share any of the hard numbers with you, we can tell you that claims filled solely with parts purchased from dealerships generally cost up to 30 percent more than purchasing from parts procured from our company. We understand that there is a large amount of work that goes into opening and closing each VSC claim. We also understand that your time is valuable. As administrators, it’s often easy to lose sight of the big picture— to increase profit without sacrificing the quality of customer service. With 30 percent or more of savings available, sourcing and purchasing from a parts distributor is well worth a quick phone call.

Today, auto manufacturers are integrating advanced automotive parts into the production of their vehicles. It is predicted that the cost of these parts will increase in the future. Fortunately, there are alternatives to purchasing parts directly from dealerships. While dealerships typically offer only new OEM parts, part distributors can offer a tier of part options. Many can provide you with: new OEM, OEM remanufactured, new aftermarket and aftermarket remanufactured parts. Each individual claim may require a certain level of quality part; this is why it is important to remember that purchasing parts solely from dealerships is not your only option.

From electronically controlled air suspension components, to integrated navigation or information units, one can see that there can be a high cost associated with incorporating technology into automotive part production. Below is a comparison of some of the parts that administrators are consistently purchasing for four popular vehicles.

Vehicle Parts Description Dealer List Ave. 3rd Party Cost Savings
2008 Toyota Camry A/C Compressor $2,200.00 $665.00 $1,535.00
Navigation Unit $3,900.00 $1,495.00 $2,405.00
2008 Mercedes Benz R-350 Steering Rack $2,800.00 $725.00 $2,075.00
Suspension Strut $1,120.00 $600.00 $520.00
2006 Land Rover Range Rover Alternator $1,545.00 $565.00 $980.00
Suspension Strut $1,108.00 $625.00 $483.00
2005 Chevrolet Trailblazer Wheel Hub $452.00 $150.00 $302.00
Fan Clutch $497.00 $225.00 $272.00

 

From the example provided, it is obvious that claims can quickly become very expensive. To keep costs manageable, administrators should source more parts from parts distributors. The old idea of sourcing only engines and transmissions from parts distributors is outdated.

Whether it’s the dealerships raising their prices on parts or auto manufactures incorporating technologically advanced parts into their vehicle production, there is a need for more variety when sourcing parts. The way of the future is sourcing quality parts at a lower cost. It’s time to stop “partying like its 1999” and adhering to the old standards of parts sourcing. It’s time to start making the best decisions for your company in 2012. You can increase your profit and positively affect your bottom line by sourcing parts from parts distributors. So when you’re making those New Year resolutions this year, don’t forget to resolve to make changes both professionally and personally. Start setting the new standard within your organization by sourcing your automotive parts from third party parts distributors.

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