Specialty parts sales continue to evolve

Jan. 1, 2020
WHOLESALE: Garages have options; Retail: Geography is key

WHOLESALE: Garages have options

How quickly performance parts and accessories are moving off your shelves may depend on your market — and your marketing.

That's about the only consensus among wholesalers interviewed for this article. Doyle Clay, general manager of Axle Plus Automotive in Stockton, Calif., for example, estimates that specialty parts account for less than 2 percent of his business. He attributes it to wholesale customers building separate relationships with specialty stores.

"In California especially, speed and specialty shops sell direct to garages — so our customers can get it from the same place we would get it from," he explains, noting that Axle Plus keeps a source on hand in case an existing customer looks for performance parts only on occasion. "Also, a lot of people get it online, like from Summit Racing."

His store is more than 90 percent wholesale, but Clay believes that should it ever shift focus onto retail, specialty parts would be a definite part of the plan.

"The way we are structured now, the time it entails to do the research, find the right products, get them and stock them means there's not a significant profit margin on the time and labor needed," he adds. "If we went more heavily into retail, though, I could see us going big that way."

Lee Pennell, vice president of Price Automotive in Lenoir, N.C., notes that specialty parts sales have been flat in recent years. He attributes still high fuel prices as the main factor.

"Of course we run specials and things, but basically since gas prices went up, sales went down in that segment," he says.

Another factor Pennell points to is a shift in demographics: "Our customers have been aging out a bit, and there are not many new people coming in."

While Price Automotive has established both an eBay store and a regular commerce Web site, Pennell says it's a similar story for specialty parts online.

"It does look like we may take off a bit more there, though," he says, noting that "high performance and racing" parts get their own Web page at PriceAutomotive.com. "We're starting to get more hits — I think we're on the threshold there."

Stu Malaney, inside sales representative for CRW Parts in Wilmington, Del., reports that he is seeing more sales in specialty parts, particularly in exhaust performance.

"We haven't changed the way we market or anything," he says. "It may be that the garages are recommending more performance parts or just that the customers are coming to the garages wanting these parts installed."

Either way, Malaney says, specialty sales have been consistently strong in his market.

Retail: Geography is key

Jeanine Butts oversees inventory control for Moosic, Pa.-based Cee-Kay Auto Supply. The holiday season usually is when she's most glued to her phone, trying to gather inventory for remote starters, bug shields, push bars and other novelties that are flying off her store's shelves. But this year was different, she says.

"It's very surprising that we didn't sell much during the Christmas season," she adds. "Usually during the winter months, I can't catch a break. But this year, we didn't sell out of anything, which was unusual."

Butts says she is not sure why the sales were slow, although she suspects either gas prices or the unusually warm winter made people forget the value of a remote starter on a chilly day. "I just hope it picks up in the spring."

Jaison Rich, assistant manager of Sigg's Auto Parts in Iola, Kan., jokes that performance sales are small in his store because "it's Iola, Kansas!" The mostly rural community, in which Sigg's counts only an AutoZone as competition, seems to be more interested in buying regular aftermarket parts — at least in person.

"The Internet really hurts us because they get all that stuff online and don't try us first," Rich says.

Tammy Hocking, manager of CARQUEST in Valley City, N.D., faces a similar challenge in her rural community. In fact, the recent poor growing season meant fewer dollars spent in town. However, Hocking points to the local vocational high school as her saving grace, at least for the performance parts.

"The kids there do a lot of high-performance work," she says. "However, they're on a two-year cycle of brakes and engines. Last year was engines, and I had a lot more sales than I do this year with brakes. Next year will be engines again."

Hocking does have other performance customers, of course, but this year she says sales were down slightly on both the retail and wholesale sides.

Jamie Hopper, secretary of Hoppers Automotive, points to specialty shop Internet sites and brick-and-mortar stores as siphoning off sales from her Tempe, Ariz.-based store. Because of the competition and low rate of sales, Hoppers Automotive just keeps a few items in stock and doesn't market the segment heavily.

Plus, Hopper adds, "Demand seems to be down in general for performance parts."

A specialty shop's perspective

Alan Kranse is vice president of Alamo Industries, which operates Alamo Auto Supply in El Paso, Texas. While vehicle performance and accessories are the company's focus today, it wasn't how it began 58 years ago — it was a gradual migration away from standard aftermarket parts.

Kranse points to diesel performance as one of his industry's growing areas, not only for car enthusiasts, but also for motorists who are simply interested in fuel economy.

"It's an ongoing issue," he says. "A lot of people are looking to improve gas mileage, and diesel prices haven't really come down. Wisely using performance products increases fuel economy."

Because of the increased demand, he says, other areas are growing, too, such as computer tuning, intakes and exhaust systems for diesel. But the increases come at a cost: More education is needed to effectively understand the technology.

"It's one of the biggest challenges we face in the industry," Kranse explains. "The accessory business is always challenging, but we are evolving toward more technically involved products."

For example, Kranse says, choosing one running board from a dozen models is easy for a consumer, who just has to compare features and aesthetics. But by comparison, choosing the right computer tuning for their diesel truck from among a dozen different programs is much more technically difficult.

Training and education is going to take center stage for years to come, he predicts, noting the role of organizations like the Specialty Equipment Market Association (SEMA) to serve as information clearinghouses, but it is a responsibility that starts from the bottom up.

"It's incumbent on individual retailers to develop new ways to find out about this new technology, and for suppliers to make the information available for them," Kranse says. "And really, the salespeople first have to have the interest and curiosity to learn about it."

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