From The Detroit News via MEMA Industry News
DEARBORN, MI — A California company has found gold under the hood of America’s older vehicles – with a little help from Visteon Corp.
In a little more than a decade, Radiator.com/1-800-Radiator has grown from a $2.5 million local business into a $60 million company with 34 locations nationwide.
About 30 percent of Radiator.com’s sales are radiators made by Visteon, which makes the Dearborn, Mich.-based company Radiator.com’s biggest supplier.
“They’re a very strong customer for us,” said John Sturgis, western regional sales manager for Visteon’s replacement parts operation. “Their focus today is more quality, not just price, which is where we fit in.”
The automotive parts and accessories market is expected to grow from $183 billion in sales annually to $206 billion by 2006, according to the Automotive Aftermarket Industry Association in Bethesda, Md. Many parts makers see the segment as a lucrative opportunity to supplement direct sales to automakers.
Sturgis estimated that Radiator.com/1-800-Radiator accounts for about 7 percent of Visteon’s total replacement radiator business.
More than half of Visteon’s $992 million in annual spare parts sales are to independent auto repair operations, which is the focus of Radiator.com’s marketing effort.
Still, San Francisco-area entrepreneur Mike Rippey has yet to make a profit from Radiator.com, which carried little overhead and was making a lot of money when he bought it 12 years ago from Radiator Express for $700,000.
“My goal was to grow it,” Rippey said. “So we put together a computer program that would run the company and opened a call center that would take all the calls rather than taking them at the various locations.”
Rippey poured profits back into the business to keep it growing. This year, he finally expects sales gains to outpace the expense of expansion and finish in the black.
In the meantime, business is brisk.
Four years ago, Radiator.com started selling radiators to do-it-yourself mechanics via the Internet. Now, Web sales account for 20 percent of Rippey’s revenues.
Radiator.com/1-800-Radiator generated $48.5 million in sales in 2003 and expects to get close to $60 million this year. Radiators sell for between $110 and $150.
The call center Rippey created when he bought the company has become not only a facility where 80 people field 7,000 calls each day, but the basis of the company’s market research.
His computer system saves all the information gathered during sales calls and the data is analyzed to track customer preferences and trends.
“The data that we get, which is basically live and instant market data, is more valid than any other kind of research we could buy,” he said.
Radiator.com/1-800-Radiator’s 34 warehouse locations are strategically located around the country so the company can promise overnight delivery to all customers.
A warehouse in Middleburg, Ohio, serves the Detroit area.
“If a customer happens to be in an area where we can’t do it overnight by ground,” Rippey said, “we’ll send it by air.”
Click here to view the rest of today’s headlines.