Rusty Bishop began his career in the automotive aftermarket 38 years ago when he joined Fisher Auto Parts, where he held a number of positions in warehouse and jobber store management and also served as a director of the company. In 1985, Bishop co-founded Federated Auto Parts Distributors, a program marketing group for major warehouse distributors. Through the years, Bishop’s leadership allowed Federated to grow to become one of the leading program groups in the industry. He currently holds the position of CEO of Federated, which is headquartered in Staunton, Va.

Bishop’s long history of service to the automotive aftermarket includes: the Board of Directors of ASIA 1991-1993; AWDA Membership and Marketing Committee Chairman 1999-2002; AWDA Board of Governors 2000 – 2003 and 2005-present. Bishop serves on the University of the Aftermarket Board of Trustees and has also served several years on AWDA’s Annual Business Conference Task Force.

In this exclusive AMN Executive Interview, Bishop reflects on Federated’s 25th anniversary and the changes he has witnessed in the distribution sector during that time. He also shares his expectations for the future of the industry.

This is a significant year for Federated as the company celebrates 25 years in business. You co-founded the business with the late Art Fisher in 1985. How does it feel to see Federated continue to grow and thrive a quarter of a century later?

I have to admit that it is very gratifying to see our group, established 25 years ago, continue to grow and prosper today. When I think back on the founding principles and vision of family-owned businesses working together with quality suppliers and a dedication to serving customers, it probably shouldn’t be a surprise that our business model continues to work well 25 years later. We are blessed with a terrific group of members. They have tremendous passion for the business and a great dedication to their customers. With such a solid foundation and strong vision from our leadership, Federated delivers value to the members and to the industry as a whole. That is what I am most proud of.

Speaking of growth, Federated saw notable growth within its member ranks in recent months. Do you anticipate more growth, either at Federated or at the member level, this year?

Our members have had great success and growth in the last two to three years, and we are seeing a number of expansions and acquisitions. We have had many members open or acquire new stores, expand stores and warehouses, and build or move into new distribution centers in the past couple of years alone. It is exciting for me to see the continued investment that the majority of our members are making in their businesses to position themselves for the future. Federated is fortunate to have a large number of ‘next generation’ management in place among our owners and we believe that we are uniquely positioned for the future. With the financial strength of our membership, I would expect to see continued investment and growth going forward.

Federated kicked off its anniversary celebration in April by revealing a new commemorative logo during the group’s annual meeting. Any other celebrations planned?

While we are all very proud of this milestone, we had a celebration with our members at our national meeting and now it is back to work. We’re pretty frugal and try not to waste a nickel of our members’ money, so we won’t be doing any more celebrating. One of the things we learned in the past 25 years is that, as a group, we need to look through the windshield and not the rearview mirror, so we are focused on the next 25 years.

In your opinion, what have been some of the most significant changes to impact the distribution segment in the past 25 years?

Wow, where should I start? There have been so many. Certainly, the impact that computers have had on our business at every level in the past 25 years has been huge, offering both opportunities and challenges. Electronic cataloging and the move toward e-commerce as a strategic tool have also been major changes to our business. The changes in the supplier community and growth of off-shore product have certainly had an impact and that impact will continue going forward. The growth and consolidation of the retail competitors has and will continue to have a significant effect on our industry. Car dealer consolidation, service station changes, import vehicle growth, the Internet, gas prices, the list goes on and on. One of the great things about our industry is that it is constantly changing and companies have to be flexible and able to adapt their strategies quickly. This is a key to our survival and future success.

Do you feel that the industry is cyclical in any way, or should we expect more, new changes going forward?

Even flipping a coin can be cyclical in the short term. Over time, the cycles in our industry tend to flatten out and, while there certainly are cycles, it is our job to manage through them. There is no doubt that we are in a period of uncertainty and change. Vehicles last longer and there is tremendous competition for consumers’ dollars. We have to work harder to make sure that repair and maintenance stay top-of-mind and ensure that shops are communicating effectively with motorists about the importance of maintaining their vehicles. That’s why we are putting so much effort into our Federated Car Care Center program. It is essential to improve the marketing and merchandising of our best customers to the consumer. We increased our support for the Car Care program by more than 25 percent this year, providing shops with programs like roadside assistance and their own website because we know that they have to compete for consumers’ business. There are going to be vehicles that need repaired for a long time to come, but the real questions are: how often, how well and where. Ultimately, that is our challenge.
 
What do you expect the next five to 10 years to look like for the distribution segment?

I expect there will continue to be great opportunities for companies that have vision for the future and focus on their customers. Many things change and require parts distributors to adapt their businesses, but as long as we help our customers and suppliers provide the best overall value possible, we can be successful. I expect it will get more difficult over time and that every part of the value chain will have to improve. That means we will all have to work even harder, but that is what has made this industry great for decades.

I also believe that a focus on customer needs may require dedication to a customer segment and being the best in that area. While there are a lot of people that are trying to supply parts to everyone, certain customers may require a different quality level, more training, better service, more information, greater technical assistance, faster delivery and more overall support than the “average” parts store can provide today. This will create opportunities for Federated members who are working hard to deliver more value now with a sound strategy for the future.

What do you foresee as the biggest challenges, and biggest opportunities, going forward?

The biggest challenge will be using technology in an effective manner, and technology will also be our biggest opportunity. There are so many areas impacted by technology: technical data and electronic catalog information for the technician; telematics and e-commerce for business and consumers; Internet and social marketing; data warehousing; and everything in between. We are on the edge of so many breakthroughs in many of these areas and there is little doubt that technology will be a game changer in the future. We have never had so much data and information available as we do today. The challenge is to make it work for us in an effective and efficient manner going forward. It is going to be fun and I am looking forward to being part of it.