APA sends core message that shareholders, suppliers need each other
Shareholders and suppliers need each other. That’s the message conveyed by Doug Squires, Chairman of the Automotive Parts Associates (APA) Board of Directors, during the opening session at this week’s 38th Annual Shareholder and Supplier Conference held in Dallas.
“Suppliers need shareholders to support their product lines in order to achieve success and to grow, just as our shareholders equally need supportive partners as an advocate for our success,” Squires told the crowd at the Renaissance Dallas Hotel.
Part of that support, he noted, has to come in the buying process -- utilizing preferred vendors in order for all shareholders and APA to benefit.
“Over the past number of months we have focused our attention back to the basics – that APA is a group of likeminded business owners pooling their purchases and working together for the mutual benefit of all,” said Squires. “This is a great concept but there is a key element missing, the suppliers. Once suppliers are added to this mix there is a potential formula for great success, provided we never lose sight of the necessary interconnection between shareholders and supplier partners.”
Automotive Parts Associates, Inc. is a member-owned cooperative made up of over 70 shareholders of independent auto parts distributors with 400 plus warehouse and company store locations throughout North America. This year’s conference featured a new format for one-on-one meetings allowing APA shareholders the opportunity to meet with more suppliers and get more time learning about new products and services.
Squires said one of the best elements of APA is that there are no compliance requirements. However, this is a double-edge sword from a rebate program perspective and it’s a challenge for APA HQ’s relationships with suppliers when negotiating programs.
“Currently shareholder purchases are spread out amongst too many suppliers and as an organization we are not maximizing our benefit with any one supplier,” said Squires. One strategy to overcome this is for shareholders to agree to consolidate purchases into a reduced supplier pool. Concentrating the volume to fewer suppliers would drastically increase the level of support which would in turn lead to better discounts, back-end rebates and higher volume thresholds, while fostering and growing important supplier partnerships to carry us into the uncertain future.
“This is not a forced or required compliance rather it just makes sense, it’s Business Fundamentals 101,” he said. “The whole point of belonging to a buying group is to pool as much business with supplier partners who will then give the best price and the best support. Rather than forced compliance, we should be looking to economic compliance where shareholders are free to choose whichever supplier they prefer, but the best financial deal would be to support the supplier that most shareholders are supporting.”
“He will meet with those shareholders who are interested, discuss lines being supported, review how these lines tie into APA’s program offering and even review and develop creative ways to try and access lines which may not currently be available to you,” said Squires.
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