System Allows Consumers to Buy Salvage-Yard Auto Parts from New-Parts Dealers

From Richmond Times-Dispatch

RICHMOND, VA — Joseph “Joey” Woodfin IV seized an opportunity.

He noticed how automotive salvage yards, such as his Woodfin Auto Parts business in Chesterfield County, Va., had been looking for ways to sell more used car parts to consumers.

Also, national auto-parts retailers wanted to be able to offer different merchandise to keep shoppers coming back.

Woodfin decided to merge the needs, creating a budding national business that links auto recyclers with car parts retailers.

“They were all clamoring for something like this,” he said.

His new EverDrive LLC serves as a conduit for auto parts retailers to have access to a vast supply of used parts through a network of more than 200 auto recyclers across the country.

AutoZone, the nation’s biggest auto-parts chain, has jumped on board. And EverDrive has signed agreements or is about ready to ink deals to test its concept with others.

“The response has been good so far,” said Woodfin, EverDrive’s founder, president and CEO.

EverDrive began testing its business concept in 10 Baltimore-area AutoZone stores in July of last year. After five weeks, and with no advertising or promotions, sales of used auto parts at those locations far exceeded EverDrive’s and AutoZone’s expectations, he said.

“The numbers were just staggering,” Woodfin said.

As a result, AutoZone decided to make EverDrive’s network available in all of its 3,300-plus stores by the end of the year, he said. About 360 stores recently began using the system, with several hundred more set to go online this month.

Richmond-area stores should be on the network by early fall.

This month, another large auto-parts retailer should begin testing EverDrive’s system, Woodfin said. He would not say which chain, but industry experts believe Roanoke-based Advance Auto Parts Inc. is the likely candidate.

Woodfin hopes Richmond-based EverDrive will revolutionize the used-auto-parts industry. The system allows consumers for the first time to buy thousands of recycled auto parts for all makes, models and years directly from a national retailer.

Most used-car parts had been available only from salvage yards, stores operated by a recycler (such as Woodfin Auto Parts) or via the Internet.

The parts sold via EverDrive, such as engines, transmissions, doors or window glass, are not stored with the retailer. Rather, the retailer orders the merchandise for the customer on its computers, which are integrated into EverDrive’s network. EverDrive then finds an auto recycler that has the product, which is shipped directly to the consumer.

“The auto recyclers sell more parts than they ever had been able to sell before,” Woodfin said. “For the retailers, it opens up such a bigger market out there for them.”

The EverDrive business model is intriguing, said Ron Sturgeon, founder of Autosalvageconsultant.com, a Texas-based company that helps auto recyclers improve their businesses.

Many auto salvage yards have logged their inventory into computers for years, he said. Computer software is even available to allow one recycler to check the inventory of another to find a used part. And some recyclers sell items directly to consumers via the Internet.

“But he’s taken the idea to the next level,” Sturgeon said of Woodfin’s EverDrive.

“Others have often thought about selling recycled parts to auto parts stores, but the packaging and logistics and guarantees have made it difficult to do,” he said. “It sounds like [Woodfin] has come up with an innovative way to do it.”

The opportunity for growth is vast. The estimated $8 billion to $10 billion auto recycling business is highly fragmented, with more than 6,000 salvage yards operating in the country, Sturgeon said. LKQ Corp., the industry leader with 41 locations, commands about 3 to 7 percent in sales.

EverDrive was smart by banding hundreds of recyclers together into its network, Sturgeon said.

There also are benefits for consumers, said George Eliades, executive vice president of the Automotive Recyclers Association, a trade organization based in Washington. Consumers, he said, want an easy way to buy used parts, and EverDrive is a solution.

“There is a market for these products, but people don’t want the hassle,” Eliades said. “Sounds like [Woodfin] has worked out a deal that is good for everybody – his company, the recyclers, the retailers and the consumer.”

But EverDrive continues to lose money as it sets up its business, said Stan Maupin, the company’s CFO.

The company expects to post its first monthly profit in December if all of the AutoZone stores are linked to its network and if sales are at levels achieved during the Baltimore test in 2003, Maupin said. EverDrive expects to generate its first annual profit in 2005.

“The economics of this business are great for us,” said Woodfin, who declined to provide specifics. “All three of us – the retailer, recycler and EverDrive – are happy with the revenue sharing.

Besides, he said, the retailers are not having to carry any inventory in their stores, so the cost to them is minimal. The risk for the auto recyclers is minimal since there is not a special cost for them to participate.

Mike Nalepa worked on a plan to integrate the inventory of auto recyclers with auto-parts retailers when he was the chief information officer and vice president at CCI/Triad, which operated the Checkmate salvage-yard management system.

The concept never came to fruition because the company was sold three times in 10 years.

“We saw this as an opportunity … to tie together the auto recyclers with the inventory-management systems at the auto stores,” said Nalepa, now a regional vice president for Greenleaf Auto Recyclers LLC, which owns 26 auto salvage yards.

For retailers, Nalepa said, it opens a second completely different line of products to sell. “It is a another way to satisfy customers and be the one-stop shop.”

That is one reason that Woodfin approached AutoZone and the four other top auto-parts chains in early 2002 about his idea.

“I sort of expected them to laugh at me or throw me out,” Woodfin said. “But the amount of calls I got back right away was unbelievable.”

Woodfin has spent years working on his idea.

He has owned the Woodfin Auto Parts recycling business for more than 20 years. (He is a distant relative of the family that owns Woodfin Oil.) His salvage yard was among the first to specialize in recycling parts from one car model – Honda – and to create an inventory-management system.

“For years, we kept playing with various ideas and trying to figure out the mass delivery of used parts,” Woodfin said. “When the Internet came about, the vision was clear. This is how I can get into a retailer and be a store within a store all over America.”

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