By Larry Northup, senior director, community engagement, Auto Care Association
Everyone knows it’s been a tough spring season for the motor vehicle aftermarket. By early April, business was down more than 35% in many areas, with the declines extending up and down the supply chain.
Due to their position at the center of the chain, warehouse distributors felt the squeeze of COVID-19 on all sides; with dramatic reductions in miles-driven leading to an inevitable slowdown in vehicle repairs and maintenance by shop customers. In addition, distributors endured disruptions in parts supply, the result of mandatory shutdowns by many manufacturers.
Fortunately, a turning point arrived in late April. States began opening up, people started driving again and business volume began to turn positive in nearly all sectors.
Warehouse distributors represent a direct link between parts manufacturers and their repair shop customers. A single warehouse can supply dozens of local parts stores and hundreds of repair shops. Moreover, they can be customers themselves to dozens of manufacturers of parts and supplies. Distributors’ value to the supply chain is multi-faceted; from stocking an incredible range of parts and supplies – all available in hours or even minutes – to providing training, warranty service, marketing support and much more.
Distributors’ reach, leverage and value were critically important factors at the federal, state and local level for decision-makers when the time came to determine their status as “essential” or “non-essential” businesses during the COVID-19 lockdowns. It was readily apparent to government authorities that without the parts supply and delivery expertise provided by distributors throughout North America, fleets of emergency vehicles would have ground to a halt. Medical personnel might not have reached their healthcare destinations due to lack of vehicle maintenance and employees of other essential businesses might have been stranded if their vehicle was in need of repair.
Still, despite being deemed “essential,” the business drop-off for distributors this spring was precipitous. The return to normalcy will take longer, but the process is now well underway and by this fall, it is expected that most, if not all, warehouse distributors will once again be enjoying a healthy revenue stream.
Part and parcel to this recovery will be robust inventories and smart but aggressive parts purchasing. And that’s where AAPEX and the Automotive Warehouse Distributors Association (AWDA) come in.
Each fall, AAPEX draws a large number of warehouse distributors to Las Vegas and for over 20 years, AWDA’s conference has been a perfect complement to the AAPEX Show.
Seventy-three years ago, long before its affiliation with AAPEX, AWDA established an annual conference with the goal of creating a productive and confidential environment for distributors and their supplier partners to interact and conduct real business. That goal remains intact to this day.
Central to AWDA’s Conference are approximately 2,000 unique one-on-one business meetings that take place between top warehouse distribution companies and their most important vendor partners. AWDA’s one-on-ones represent perhaps the most efficient way to conduct serious business during the week in Las Vegas.
What sets AWDA’s Conference apart can be summarized in two parts: 1) the high level of participating company executives and 2) the expectation that AWDA’s one-on-one meetings are intended specifically for channel partners that enjoy existing business relationships. In fact, participating manufacturers must, at the time of registration, currently be selling direct to seven (7) or more AWDA warehouse distributor members or be approved to sell through at least one (1) of the major Program Marketing 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 or who simply want to introduce themselves to a few distributors. Preparation for the meetings is intense and often involves multiple divisions and personnel within each participating company.
At the same time, near all distributors that attend the AWDA Conference also visit the AAPEX Show floor. This represents a tremendous opportunity for exhibitors to showcase new products or services and tap into the growing market for DIFM parts. It also allows distributors to follow-up on conversations initiated in the one-on-one meetings.
With billions of dollars in purchasing power, traditional distribution can be an extremely lucrative market for the sale of motor vehicle parts and supplies. The distributor members of AWDA and the Program Groups to which they belong are strong and getting stronger. As the economy returns to normal, AWDA’s members will be at the center of the action. Many will be in Las Vegas this fall, ready to meet with vendors to discuss and assess new products and programs. They will be looking to re-establish relationships with existing vendors that have been put on “pause” for too long.
There is no doubt that AAPEX and AWDA will evolve to meet the needs of our new world this fall. How could they not be after all our industry has been though? However, some things will never change, like the need and desire to work with channel partners to quickly return to the booming market that we were all forced to put on hold this spring.
Larry Northup is senior director, community engagement at the Auto Care Association. In his role, Northup is responsible for evolving Auto Care’s 12 volunteer communities to increase volunteer engagement, add value for volunteer leaders and increase community effectiveness to best support the association’s long-term vision. Northup also serves as executive director of the Automotive Warehouse Distributors Association (AWDA).