SIPS UP-DATE, March 28, 2018

Well, it’s been more than 45 years since I landed my first job in the auto parts business, 20 years since I went to work for Jose’ Meyer in the import auto parts business, and nearly 18 years since the first meeting of our SIPS members and still, to this day, something can happen that just stops me in my tracks asking, “What the heck just happened?” That was the case again last week.

When an organization as large as The Network invests thousands of dollars in bringing to Memphis as a potential prospective member, the representatives of a smaller, but important organization, then again, brings all the members of that group together for a formal presentation, cocktails and a dinner, you would have to believe that they are in it to see their efforts through. Almost as soon as the meeting was over, we presented The Network with a list of concerns and questions as a part of our members discovery process, seeking answers to previously unanswered questions, specifically addressing discount and rebate structures that had never been outlined for anyone before.

The response to those questions came the very next day in the form of advising us that all conversations between The Network and SIPS were ending. This was because The Network felt like the nature of some of our questions indicated that we wanted to start some kind of a bidding war between The Network and A.P.A., which The Network wanted no part of, so they were ending our discussions. Period.

With this action on the part of The Network, Marty and I have now concluded that we will no longer seek any additional national buying group options, or opportunities for the SIPS members again. We can tell you that for the last two years, our efforts in this arena have been completely transparent and we have worked diligently, with the utmost integrity, to try to identify the very best long-term national buying group opportunity for the members of the SIPS group. We would not trade the education and experience that we have both gained through this process, but it is now time for all the SIPS members to learn for themselves if a better national buying group opportunity exists for their business. Marty’s and my time will be better spent on other endeavors to promote the welfare of the SIPS members in the future.

If any of you have further questions about anything that has transpired in our discussions with The Network and how this situation concluded, please give either one of us a call and we will be happy to try to answer your questions, or to address your concerns. Unfortunately, the explanation on the first page of this letter pretty well sums it up.

OK, so now let’s get back to the primary purpose of this UP-DATE letter and let you know what else happened at our most recent membership meeting in Orlando, Florida on Wednesday, March 7th.

After welcoming the 20 participants of our 14 members represented at this meeting, and with time being short, we immediately launched into an around-the-room discussion of what was on our member’s minds.

Tom and Adam Glaser were thrilled with the weather that they have experienced this year in Vermont, as it has boosted their business tremendously. Another very helpful action was O’Reilly’s purchase of their biggest competitor. This eliminated the “back door” money that the previous owner was filtering to their customers and O’Reilly’s poor inventory offering and service to the customers in the area has really helped as well.

Mike Millsap from Washington told us that NAPA’s Altrom import parts division had closed all of their D.C.’s in his area. Centric brake distributors are only available in limited areas now and that is good, because it was being sold very cheaply and was difficult for Mike’s company to compete against.

Luke Wright and Rotem Gill have been working with Luke’s son, Kyle, to develop their own in-house parts catalog. This catalog is O.E. number based. It is a long tunnel, but there is a light at the end of it now that they can see. It will be in the test stage for a while yet. Their move to the different building is fully complete now and most of the dust is starting to settle. They have experienced some positive employee changes lately and hope to have one more in place soon. AutoZone is now purchasing quite a lot from them and they have been getting a 20-30% G.P. on these purchases. Rotem also mentioned that their e-tail business is going crazy and they can barely keep up with it. They are launching a second (anonymous) eBay store. This is a company that has almost “0” walk-in business. They are looking ahead to a good year.

Swede Farling from Mechanicsburg has also experienced the affects of weather, but not all good. A pipe broke and soaked a lot of product. Business has still been slower. His father, Mike, has still not decided when he may retire.

Ray Lettini from Sacramento went live on their new Autologue computer on February 1st. To date, it has been a trying, but good experience and he is just very grateful for all of the work that Justin has done on this extensive project. Their business has been busy. A challenge has been the crime in their area, which has been hard to understand, because it is not that bad of an area where they are located. Unfortunately, the homeless population is significant and contributing to the problem.

Suzanne in North Hollywood reports that they have been in a state of transition. John is slowly winding down and spending a little less time in the business. They have hired a new manager and there have been changes with their salespeople. Their retail business is coming along and they are looking at the addition of a new PartsWatch computer from Autologue. Their export business has also been picking up, but it has been difficult to maintain decent margins on this business. It is just too competitive. Suzanne asked for input from the members regarding the + / - ‘s of hot-shot and scheduled deliveries. The members had lots of experiences to share with her, but very few decisive conclusions about it all. The one common denominator for most of the members is to always ask the customer to honesty state the priority of their delivery. This tactic seems to be one of the only things that can help clear up some of the delivery stress.

Rick Clark from El Paso always looks forward to tax refund time each year. He notices a distinct uptake in business when the Federal tax returns start flowing back to his customers. They did experience a drop in their retail sales last year, especially in their BMW parts. AutoZone seems to have more parts applications these days and parts available on the internet are always an issue. CRP drop-shipping into his area customers is not helping at all. He has also noticed Amazon’s Chinese vendors popping up on the internet independently, half the cost of Amazon. Rick is expanding their inventories as necessary and prudent.

Mick Mohrlant in St. Paul stated that everything in their area is going along pretty much the same right now. Nothing too exciting to report.

The weather has been very good to Gene Bochinski in Chicago and his first quarter is way up from last year. There seems to be more and more kinks in WorldPac’s armor lately and it is apparent that the melting of Advance and CarQuest is not going so hot. Catalog errors are an on-going problem and just the same as everyone else in the group, G & H competes with everyone. Gene has a lot of competitors who buy from him and they have established the common practice of being assholes about competitors returns. They take them, but they never leave the transaction with a good feeling for the returning party. No smiles in this process! They DO NOT deliver to any chain store operations and this business is done at a healthy gross profit margin. Gene has had to abandon delivery to a few very dangerous areas that they used to serve. He recommends that the City of Chicago quit worrying about gun control and start offering free target practice for all criminals, so they start hitting each other with their gun shots instead of the good citizens.

Mike Brown officially retired from Olympus Imported Auto Parts on January 31, 2018. Congratulations Mike!! Mike wanted to note that he feels that the people that he has come to know from Genuine Parts Company are good guys, working for a good company. G.P.C. NAPA’ized Altrom and ruined it in the process, so they are leaving the strong business practices of Olympus alone. Mike said that in his time as the owner of Olympus, the number one priority was always the customer. The number one priority of G.P.C. is to not get sued. Very different strategies . . .

Bill Guinard is just trying to keep the wheels from falling off the operation since Mike retired. Advance and WorldPac seem to be less effective. Their Euro business is up, BMW up a ton at more than +40% and in general, business is really OK.

Alan’s business in Hawaii is definitely better than last year. He had a counterman of many years retire, so replacements like those are always challenging. Bad roads make for good business and Honolulu has lots of bad roads. The new lite rail system for the island is way behind and way over budget. (No doubt a government project, right?) Everyone is talking about it and the delays just help prolong its use and force people to keep driving their cars and going through parts.

Kenny Ho’s business in San Jose is very steady right now. In his area, a real consideration must be given to the advancing of the electric vehicle population and the effects of that on parts inventories of gas powered vehicles in the future. Kenny is already trying to source the few replacement parts that these vehicles have, like brake pads. There are also sensors galore on these vehicles! After the government subsidies for purchasing these vehicles end, the costs will be significantly higher, but the salaries in his area are high as well. Tesla’s customer satisfaction ratings are out of this world. People will continue buying these. We, as SIPS members, need to continue to address issues of the future like this.

After our around-the-room comments we took a break and when we came back, we started a discussion of the differences between A.P.A. and The Network in advance of our meeting with representatives of The Network later that afternoon. In light of everything that has taken place since our meeting, I am not going to waste this space, or your time, revisiting these discussions.

Summer meeting plans were a priority for discussion during this meeting and we did find time to nail those plans down. Our summer meeting will be held in Detroit, Michigan on Thursday, Friday, and Saturday morning, June 7, 8 and 9, 2018. That’s all we have for now, but as we develop the plans for this, we will keep you advised.

Mick brought along copies of a “Permanent Injunction and Dismissal With Prejudice” in the matter of Bosch -v- SIC Auto Parts, LLC, essentially dismissing the case against Danny at SIC for claiming he sold counterfeit Bosch auto parts. Let this still be a lesson for all of us . . . this must have been an extremely painful process for Danny at SIC even though the final result was in his favor. Don’t get caught in a mess like this.

The first of two presentations to our group started at 11:00 in the morning with Hengst, the company that you voted for as your number one (#1) pick for a presentation during this meeting. Representing Hengst was regional sales manager, Jamie Griffin, regional sales manager, Bill Perlmutter, systems manager, Brandi Vincent and Michael Padover.

Our members see Hengst as well respected by their European installers, they offer great filters, good pricing on a lot of their products, and as an O.E.S. supplier with terrific customer service.

Hengst has been around since 1958. From their earliest beginnings, Hengst realized that using five (5) Eifel Towers of steel to produce canister oil filters each and every year was not a good thing. Their solution was the advancement and expansion of the use of cartridge oil filters.

Hengst has experienced steady growth since 1997 through their highway, off-road and industrial filtration divisions. A few of their O.E. customers include Audi, General Motors, Hyundai, Mercedes Benz, Volkswagen and Volvo. They also offer heavy-duty applications. Their line consists of 2500 part numbers in Europe and about 850 in the U.S. Presently, there are seven SIPS members supporting their product line; All Euro, FCP, FPS, G & H, Metric, Olympus and Rancho.

None of Hengst’s products void the warranties of any O.E. manufacturer. They are an ISO9001 and TS16949 approved manufacturer. Their U.S. operations are in Camden, South Carolina and Novi, Michigan. You can buy direct from their Camden distribution center for only $750.00 prepaid freight. They have all ACES and PIEs data available if you need it. Their bar code reading system is great, but their catalog sucks! (Their own words!) they are involved in G-commerce and Edi is available to those of you who use it. They also offer specialty flyers (advertising brochures) for high volume applications like Audi, etc. Their motto is “Right Oil, Right Filter, Right Now!” Their Sprinter program is booming and their BMW program has been terrific.

They do not offer EDM filters and you cannot combine automotive and industrial filters for your orders. The good news, is that their new product announcements are getting better and more regular.

Your Hengst Special for all SIPS members until the end of this year is . . . . .

30% off your first order!

20% off your second order!

10% off your third order!

That concluded the Hengst presentation and we headed off for lunch.

After lunch, our second presentation was your second most popular pick of the presentation opportunities – CRP.

The CRP presentation was made by Ole Wagenbach, their regional sales manager in the Southeast.

CRP’s product lines include Contitech, Rein, Ajusa, Pentosin and AAE. All of the contents of their kits are from the most reputable of suppliers. Their Black Series timing kits were specifically designed to be the most cost competitive and carry a 2-year, 24,000-mile warranty. Their Pro series kits have a 100,000-mile warranty.

Pentosin product comes from Germany. It was designed for the European market for O.E. fluid applications. It matches O.E. color and specifications exactly, because installers do not want universal anything. When dealing with fluids, be sure to review all of the current information that you can regarding DOT specs, and what can be used sometimes and what can never be substituted. Pentosin has a quality line of motor oils of different viscosities, ATF and hydraulic fluids.

Ajusa is a line of quality gaskets produced in Spain in a wide variety of applications including many import applications.

Rein is a dealer alternative for a variety of parts. Their coolant hoses offer great coverage, no cutting and have all new parts. They also offer power steering hoses. They are also adding Asian applications. The Rein European water pump program offers mechanical pumps, main electrical pumps and auxiliary pumps. They all come with a 4-year, 50,000-mile warranty.

A.A.E., Atlantic Automotive Enterprises, is their power steering division that they purchased several years ago. This offers you a U.S. remanufacturer, first-fit every time, quality re-engineered products, and the leader in electric power steering.

For more information, contact your local CRP representative.

Immediately following the CRP presentation, we boarded a bus that took us to the Dolphin Resort for The Network presentation and cocktails and dinner at Shula’s Restaurant sponsored by The Network. Since this opportunity is now behind us, I will not take your time to elaborate on what this may have meant to us, or your company individually. We regret that it ended up being a waste of our member’s time.

Because we accommodated The Network’s request for their presentation to be made to our members as soon as possible, we gave up our normal amount of meeting time in favor of their presentation. For this reason, we did not get to cover the following topics that should have been covered during our meeting...

SIPS logo and registration update

Results of the SIPS / DMA program for 2017

SIPS website news and update

Kenny’s discussion of a SIPS inventory exchange within our membership

A Trakmotive Axle discussion

The Parts Authority’s purchase of IMC and the potential impact on our members

AutoCare memberships due in April

...and anything else that you may have wanted to talk about.

Our good friend to the SIPS group, Jeff Kloeckner, has an excellent background in several different computer systems, tons of inventory experience and lots of general import parts knowledge. Jeff is available on a consulting basis for $2,000.00 a week, plus expenses and that will include extra long days and Saturday mornings. Contact Jeff at (702) 717-8520 to discuss how he might be able to help you get caught up.

That pretty much wraps up this edition of the SIPS Spring Meeting Recap UP-DATE. We hope that you are not too disappointed in the way that The Network situation turned out. Marty and I certainly did not plan it that way. We are just going to focus on going forward and continuing to do our best for the members of SIPS. Thanks for reading.

Take care,

Gary





SIPS UP-DATE, November 6, 2017

Well, it was great seeing so many of you here in Las Vegas last week. We had a terrific turnout for the 17th annual membership meeting of the SIPS group. Anytime that an organization can get more than 60% of their members together these days is definitely noteworthy. Thank you to all of you who came to Las Vegas for the shows and for our meeting. You all helped with the Vegas Strong effort.

As usual, our meeting opened with a welcome and everyone introducing themselves to the rest of group. We especially want to mention that our newest member participated, Rick Schreiber from Import Parts Specialists, Inc., in Boise, Idaho. Welcome Rick! Marty’s brother, Ken Gold, and his son, Scott Gold, also joined us.

Because there has been a lot of concern about what has been going on at A.P.A. / Professional’s Choice in recent weeks, we asked our member on the A.P.A. board, Joseph Koudsi, to enlighten us as to what has actually taken place and why and how things stand currently. Joseph did so gratefully.

He explained the departure of president and CEO, Gary Martin, as a positive thing for A.P.A., their members and their vendors. Gary’s abrasive attitudes and actions towards many had become challenging for the A.P.A. staff and board of directors to overcome.

Caprice had also become discouraged with the way things were going and sought out an employment opportunity with a former employer. That former employer actually created a new position just for the opportunity to bring Caprice back into their company.

She had been that valuable to them and they wanted to be sure to get her back. Once it was announced that Gary was leaving, it was too late for Caprice to reverse her action to leave.

Gary’s departure “settled” many who had become distraught, encouraged the remaining staff to pull together and provided an opportunity for others to step up and to find some new blood to assist with their efforts going forward. Caprice’s responsibilities are now performed by Inga and Sara, both who we had a chance to meet in the A.P.A. rooms during the shows. Paul will continue to fulfill his role with the A.P.A. organization and at this time, there are no plans to rush to find a replacement for Gary Martin.

Financially, A.P.A. is stronger than it has been in years and all of the present and new staff, as well as all of the members of their board of directors are looking forward to a bright and successful future. Everyone there is very excited about the plans for their annual conference in Orlando, Florida in March of next year. Joseph also mentioned that there will be a “participation bonus” for early registration for this event, a $2,000.00 rebate check, instead of the usual $1,500.00. This makes it even more appealing for their members to sign up early and make plans to be there.

From my personal perspective, everything related to the breakfasts, lunches, and especially our meeting in the A.P.A. rooms during the shows, went off without a hitch.

Both Inga and Sara seemed to have a good handle on all of the details and the SIPS members were served exceptionally. As always, we thank A.P.A. for their support of SIPS and we thank Inga and Sara for their efforts to make our meeting a success.

Kyle Wright from All European Auto Supply, our member in Royal Oak, Michigan, updated all of us on the current status of the SIPS website, sipsteam.com. Again he offered everyone the opportunity to get their inventories uploaded on the website, so everyone could get access, but the response was still lukewarm. When all the members were asked if they had visited the sipsteam.com website recently, very few hands were raised. We’re going to fix that. To read this letter, all of you will be provided a link that will take you to the sipsteam.com website and this letter that from now on, will be posted to that site. The only place that you will find it! It’s about time for all of us to become familiar with this website and we are going to make it happen. Thanks Kyle!

Ever since our meeting in Minnesota last summer, Adam Glaser has been following up on our interests to create a uniform e-catalog that would serve our members and attempt to get us something that was a little closer to the WorldPac Dial-Up catalog.

The bottom line, is that we really are no closer at this time. Adam’s work with Autologue has not produced the results that he and we had hoped. All of this does not mean that we are giving up, but only that our quest for this continues. If you would like to know more of the nitty-gritty pertaining to his efforts, please contact Adam directly.

Former SIPS member, Baker Imported Auto Parts in Atlanta, Georgia, contacted all of you through our Google Group portal offering their inventory at greatly reduced prices. If any of you missed that and need more information, contact James Godfrey at (770) 998-8584.

During our summer meeting in Bloomington, Minnesota, representatives from DMA / SenSen proposed a program to the SIPS members that was very good, but it depended on a minimum of ten (10) members signing up for the program. As of now, we are just a couple of members short. This really is a great opportunity, so if you have not signed up and need more information, please contact Mark Harritan at (910) 641-7524, or mharritan@dm-access.com. We need your support.

We encountered a snag when trying to register and trademark our new logo. The trademark justice determined that we should seek the approval and permission of every country whose flag appears in the world globe beside our name before they could approve it. However, we were provided a second chance to plead our case from another perspective before our application was rejected. With that, we pointed out that this image was found on the public offering of Google Images and since it appears there, we should be able to use it without the consent of all of the countries represented. To date, we have not received a second ruling, so we will just have to wait to see what is determined. With or without the approval and ultimately the registration and trademark, we will continue using this logo in its entirety into the future. We should also note, that the name, Society of Import Parts Specialists, Inc., is already registered and cannot be used by anyone else, so we are pretty safe going forward. We highly doubt that one of the foreign countries will pursue us legally.

Mitsuboshi became a less friendly vendor when they began requiring a minimum of ten (10) of any part number when placing stock orders. Many of our members who were supporting this company have gone other directions because of this. Several members will stop in at their booth and try convincing them to reverse this requirement.

Once again, the SIPS group is being pursued by a competitive group to A.P.A. / Professional’s Choice. The Network, headquartered in Memphis, Tennessee, contacted Marty and both he and I met with them on Monday, before the shows started. It only made sense to listen to them, especially with all of the turmoil that A.P.A. has experienced recently. We met with three people from The Network and we were immediately impressed with how important acquiring our members was to them.

These are also people who do not drag their feet like some of the individuals that we encountered previously with other program groups. We found these folks to be honest, straight forward and willing to do what is necessary to make something happen – soon.

With the consent and approval of our board and then with the approval of the majority of our membership, the decision to pursue this going forward was in motion. With that, Gary and Marty will prepare an updated “wish list” of everything that we asked for in previous program group negotiations and that list will be presented to key individuals at The Network in Memphis in late February, when they invited us to fly there at their expense to try to put something together for our members. Obviously, no guarantees.

What we can share with you, is that The Network is much larger than A.P.A., their programs, discounts and rebates are competitive, their annual dues for members are less, they do have a co-man warehouse up and running right now and they really do seek our input and involvement in growing their enterprise. These guys are hungry and they realize the benefit of moving all of the SIPS members into their customer base, especially with our import expertise.

At this time, all we can do is keep you posted on our progress until some of the fine points of everything can be worked out and agreed upon. If any of you have specific requests that you would like included in our demand list, do not be shy about getting those to us and do so as soon as possible.

Our next meeting will be held in Orlando, Florida at the Disney Contemporary Resort on Wednesday, March 7th, 2018, as part of the A.P.A. / Professional’s Choice Annual Conference. All SIPS members are encouraged to participate, whether or not you are a member of A.P.A. This gives every SIPS member the opportunity to experience what program groups are all about and what a spectacular event they can put on for their members. Please put this date on your calendars now and plan to participate. We will keep you posted on the details when we get a little closer to the date of the event.

During our meeting last week, our members all submitted suggestions for who they would like to make presentations at the March meeting. Here are the “Top 5” suggestions . . . .

  1. Hengst
  2. CRP
  3. Facet
  4. Total
  5. TRW

There were 25 additional suggestions that only received a single request. We will begin pursuing these vendors real soon, so if anyone who was not at the meeting has additional ideas, please let us know as soon as possible. Thanks!

Counterfeit parts are not experiencing any less attention from manufacturers and companies like SIC, Northside and North Shore have paid the price. Please be ever vigilant about all of the parts you offer and if you ever discover anything “fishy”, notify the manufacturer of origin immediately. Honesty is the best policy here.

If you are looking for a good axle line alternative, some of our members suggest ProTech. Experienced owners, quality product and dependable order fill at competitive costs. Something to consider.

OK, winding down . . . Once again, Marty provided all non-Import Vehicle Community members with passes to the Fabulous Networking Reception, FNR. That’s great, but it DOES NOT HELP SUPPORT THEIR CAUSE. Please consider joining the Import Vehicle Community who regularly fights for all of your businesses behind the scenes. SIPS is a member and you should be too!

Your annual SIPS dues are due now. If you have not already paid your $500.00 annual SIPS dues like a dozen members already have, please send your check today. This is the best value your business can get for the minimal investment you make. Don’t delay, send your check in today. THANKS!

That’s all for now folks. Hope you had a great time while you visited. Take care.

Gary