By Larry Northup, AAP, Executive Director, AWDA, Senior Director, Community Engagement, Auto Care Association
Customers make AAPEX successful. Without the people and companies that purchase the products on display, there would be no reason for exhibitors to attend the show.
Fortunately, AAPEX draws a huge number of buyers to Las Vegas each fall. Arguably, among the most important are the hundreds of warehouse distributors that attend. These companies are at the center of a supply chain that begins at the manufacturing plant and ends with hundreds of thousands of vehicle repair facilities worldwide.
For nearly 20 years, the Automotive Warehouse Distributors Association (AWDA) has held its annual conference in conjunction with AAPEX. The conference is a key feature of Automotive Aftermarket Industry Week (AAIW) and a major draw for top warehouse distributors. In fact, as exhibitors prepare their show booths and automotive executives arrive in Las Vegas from around the globe, many of North America’s leading warehouse distributors are already meeting with suppliers large and small. New products are introduced, new plans are made and old commitments are reaffirmed. This is the AWDA Annual Business Conference.
Central to AWDA’s Conference are the nearly 2,100 unique one-on-one business meetings that take place between distributors and their closest vendor partners on Sunday and Monday, immediately prior to AAPEX. AWDA pioneered these pre-scheduled sessions to facilitate high-level business discussions in a personal and confidential setting. Participants are top decision-makers from member distributors, manufacturers and other supporting companies. AWDA’s one-on-ones present possibly the most efficient way to conduct serious business during Industry Week, but certainly they’re not the only way.
Approximately 100 top warehouse distribution companies attend the AWDA Conference and nearly all of them spend time on the AAPEX Show floor following the Conference. This represents a tremendous opportunity for exhibitors to tap into the growing market for DIFM parts.
Although wholesalers’ share of the DIFM parts market has remained steady for several years, gross sales for this sector has expanded by nearly 4.5% annually. This is indicative of the overall trend toward greater DIFM vs. DIY service and repair in the passenger car and light truck marketplace. The heavy duty market has long been dominated by professional repairers, also largely supplied by distributors.
This “traditional” distribution model involves warehouse distributors and their networks of parts stores, which in turn feed the independent repair market. A central feature of this integrated supply chain are perhaps a dozen so-called “Program Marketing Groups” whose shareholder-members collectively distribute parts and supplies to approximately 30,000 individual parts stores.
With around $100 Billion in total sales (at retail prices), these Program Groups assume immense importance within the auto care industry. Most of them participate in the AWDA Conference and all have personnel on the AAPEX show floor during Industry Week.
Manufacturers and other suppliers that sell to – or through – the traditional market are well-advised to study up on the major Groups; understand their structures, their product approval and purchasing processes and volumes of the various lines their shareholder-members cover.
Such an investigation takes time and energy, as these Groups often keep their sales data close to the vest. Finding an “in” with one or more of the Program Groups can be a long and arduous process that requires diligence and creativity on the part of manufacturers. Clues to the Groups purchasing habits can come from a variety of sources such as publications, trade associations, independent parts stores, manufacturers rep firms, repair shop customers and the Groups’ shareholder-members themselves.
Patience is also a major virtue when it comes to penetrating a Group’s product purchasing process. Line changes are not taken lightly by Program Groups where millions of dollars in sales and inventory could be at stake … not to mention the logistical hassle of changing over lines at the warehouse, parts store and repair shop levels.
Still, changes can and do happen. Opportunities arise every year and the rewards can be immense for manufacturers who receive the coveted “approval” to sell the products through one or more of the major Program Marketing Groups.
AWDA’s Conference is intended specifically for channel partners that enjoy an existing business relationship. In fact, participating manufacturers must, at the time of registration, currently sell product direct to seven (7) or more AWDA warehouse distributor members or be approved to sell through at least one (1) of the major Program Groups. AWDA’s Conference is not for casual buyers or sellers and does not lend itself to companies that are new to the traditional marketplace and simply want to introduce themselves to a few distributors.
If existing business relationships do not currently exist, AAPEX is without question the best place to begin the process of creating them. With approximately two months to go before Industry Week, now is the time to make contact with Program Marketing Groups and/or their distributor shareholder-members. Attempt to line up meetings on the AAPEX Show floor or, if you are an Auto Care Association member, in the Auto Care Member Center located adjacent to the show floor in the Sands Expo Center.
With billions of dollars in purchasing power at stake, traditional distribution can be an extremely lucrative market for the sale of parts and supplies. The distributor members of AWDA and the Program Groups to which they belong will be in Las Vegas on the AAPEX Show floor this fall. It will be up to the individual exhibitors to find them, understand their needs and convince them that their products are worth considering and ultimately purchasing.