SEMA News - November 2009 

With Steve Campbell

A Conversation With the SEMA Chairman and the PWA President-Elect

 SEMA NEWS-NOVEMBER 2009-BUSINESS 
  
The Specialty Equipment Market Association (SEMA) was established in 1963. It serves the industry with market research, as a legislative watchdog, as an educational outlet and as an advocate for the opening of international markets. Its membership has grown to include more than 7,300 companies, including manufacturers, warehouse distributors (WDs), jobbers and retailers serving every automotive niche.

The Performance Warehouse Association (PWA) was founded in 1971 with goals very similar to those of SEMA. Its membership includes specialty automotive parts wholesalers who have banded together to deal with management, financial and legislative issues. It has also expanded its reach to offer premier jobber/retailer support programs. The association’s mission statement reflects the PWA’s total outreach to industry segments: “To assist the specialty automotive WDs in their efforts to expand, maintain and promote the profitable distribution of specialty automotive products through the manufacturer/warehouse distributor/retailer/consumer channel.” 

The associations also offer two of the most widely attended and beneficial events available to the automotive industry, the SEMA Show, held annually in Las Vegas, and the annual PWA Conference, which takes place in Phoenix, Arizona.

Each of the associations has either just installed or is about to install new leadership. Rick Rollins has assumed the chairmanship of the SEMA Board of Directors, and Donnie Eatherly will take the reins of PWA as its new president beginning in January. Both are industry veterans who share the unique perspective of years of volunteer experience in both associations.

Rick Rollins is the president of Rollins Performance Marketing/Consulting, director of sales and marketing for Percy’s High Performance and vice president of sales and marketing for Parts-Grabber.com and also serves on the board of directors for Arrington Engines. His 39 years in the automotive aftermarket include stints as a mechanic, a store counterman, a WD buyer, a regional and national sales manager, and sales and marketing vice presidencies for two manufacturers. His industry honors include induction into the SEMA Hall of Fame in 2006, PWA Person of the Year twice, Manufacturer of the Year with Superchips and the Vanguard Award from the Young Executives Network.

Donnie Eatherly is the president and co-owner of P&E Distributors Inc., a Tennessee warehouse distributor with three locations. Eatherly grew up in the WD business that his father started in the mid-’50s. He is the president-elect and a three-term board member of the PWA, but he is also in his second term as a member of the SEMA Board of Directors and has worked on a number of committees and task forces. He is one of the first graduates of the SEMA Best Board Practices Education Program and is currently working on the SEMA Data Pool initiative. Eatherly was recently appointed to the SEMA Executive Committee.

Recently, SEMA News had the opportunity to speak with the two executives about how SEMA and PWA might work together.


SEMA News:
What do you see as the greatest challenges for the automotive specialty-equipment industry, especially the challenges that overlap for members of both SEMA and PWA?


Rick Rollins: Right now, it’s the fight for the consumer’s discretionary dollar. Everyone is spending less and only on what they really must have. Down the road, it will be more negative regulation and legislation, which both associations need to stay vigilant about. 

Donnie Eatherly: Other than the economy getting back up to speed, I also see three things that overlap: education, legislation and technology. Each of us as business leaders and owners need to get our heads around those three things, because they affect our daily lives all the way down to the counter level. We need organizations, such as PWA and SEMA, to work together on far-reaching programs to help our members in those areas because we can’t afford to do these things individually.


SN: How can the two organizations work together to improve the industry in general and the role of WDs specifically?

Rick Rollins: It’s funny you asked, because at the last SEMA Board of Directors meeting, we decided to put together a task force to do just that—look at how the two associations can work together for the betterment of the industry as a whole. We also talked about other opportunities for the two boards and the two associations to
work together.

Donnie Eatherly: PWA and its leadership are very excited about SEMA’s formation of a task force to work more closely together. I believe that the two organizations have proven over the years that they bring tremendous value to the industry. With the economy the way it is, it’s important to look at what each organization provides for its membership and see what we can do to energize the base to not only get involved—which, by the way, is very important—but to utilize the programs that are in place, such as the SEMA Educational Institute (SEI), PWA University (PWAU) and other programs that most members may not be aware of. As far as the role of warehouse distribution, the memberships overlap a great deal, and the core of PWA member warehouses are companies that have been in business for many years.

 SEMA NEWS-NOVEMBER 2009-BUSINESS 
 ”We need organizations, such as PWA and SEMA, to work together on far-reaching programs to help our members.”   - Donnie Eatherly  
PWA has been slow to react to changes in the distribution network over the years and becoming a member has become difficult. That is starting to affect the PWA Conference.

With consolidation and some warehouses failing, we needed to look to the future and open up the Conference and bring more value back to our manufacturer members. An organization as large as SEMA—the councils, in particular—could work with PWA in making members aware of the Conference program, especially opening the 2010 Conference for non-members, which will bring in more meeting partners and help the manufacturers and SEMA council members grow their businesses.

The role of warehouse distribution in the industry is as strong as it’s ever been, and we as distributors need to embrace the educational programs, SEI and PWAU, to educate our employees to make them better and more knowledgeable sales people. We need to work together on industry-standardized data so that we can wring out more efficiencies up and down the distribution channel, which will help with such things as websites, B2B, B2C, electronic cataloging, current pricing, lost sales and on and on. I think that there is a tremendous opportunity for the warehouses to work with SEMA when the official rollout of the ProPledge program is ready. I can see immediate results from the warehouses going to their installers and expediters and getting folks signed up.


SN: As you pointed out, both organizations have placed greater emphasis on education in the past few years—PWA with PWAU and SEMA with SEI. Can those efforts be combined or otherwise offer cooperative curricula?

Rick Rollins: I think that we can work together and/or offer cooperative curricula. Again, we don’t know what will come out of the task force that might allow us to work together. Education has been a big topic for more years than I want to remember and working together on it should do nothing but make it better for all of our industry and maybe even other industries.

Donnie Eatherly: Being on the Board of SEMA and president-elect of PWA, seeing how PWA and SEMA could work more closely together on issues such as these has been one of my main missions in life. You have to keep in mind that both organizations are creating and producing programs that they feel bring value back to their members. That being said, I think that PWA felt its role in the education process was to bring comprehensive product training to its membership so that it could educate the warehouse phone staffs and then bring education down to the jobber, speed shop, truck accessory and mass retailer levels.

If there was a way to let SEI continue to build its very robust business training suite with all aspects of running a profitable and successful business and somehow link it to PWAU, members could go to either site and reap the benefits of what both organizations have so painstakingly put together.


SN: Some manufacturers have begun to sell directly to consumers. Is there a way for WDs to offer services that might help to reclaim that part of the business or otherwise offer a solution that allows those manufacturers to continue doing business using traditional distribution methods?

Donnie Eatherly: Wow, that is a great question, and the answer, without a shadow of a doubt, is yes. Let’s face it: The Internet came along at a time when most long-standing traditional WDs had grown their businesses to the point where we could not move fast enough and implement this revolutionary way of doing business. It was very easy for people to create websites at home or at small shops that focused on a category, such as diesel, or one product and market it to the world. Therefore, the channel shifted. We needed to figure out how we as warehouses could harness the power of the Internet for our complex inventory and business-management software. It’s a very expensive and complex proposition, depending on the size of your company.

Most warehouses have resolved these problems, and the next step as an industry is to figure out the data problem to make it easier to shift it back through traditional distribution and not make UPS and other carriers rich shipping products across the country when, in most cases, they’re already in the consumers’ or their local retail outlet’s backyard. It is more efficient for a manufacturer to make one big shipment to an area for distribution than it is to make many, many shipments every day all over the country. Distribution groups have stepped up to the challenges and have put fulfillment systems in place for wholesale customers and retail customers alike. I don’t know of any other industry where you can get a product for a vehicle as complex as a car or truck, where the part the customer is inquiring about might be for a 30-year-old vehicle and get it within one day, in most cases. That’s phenomenal! Look at how many different parts are produced in the aftermarket and how quickly and efficiently distribution gets them into the consumer’s hands.

Rick Rollins: Some WDs have also begun to sell directly to consumers! Look, distribution is changing, and it will be different five years from now from what it is today. Exactly how different, I wish I knew because I could make a whole lot more money than I’m making today if I could tell you now. But as I see it, warehouses stock parts so that the manufacturer doesn’t have to, and the WD gets those parts to the businesses that make the final sales. There are two things that will never change: the manufacturer who makes the part and the consumer who puts it—or has it put—on his car. Everything in between will change, and the distribution chain needs to be on top of those changes and how they can be effective with whatever the changes may be.


SN: PWA has its yearly Conference a few weeks prior to the SEMA Show in Las Vegas. Do you foresee any greater linkage between the two events? Could there be benefits to linking them somehow?


Rick Rollins: Again I’ll bring up the task force. PWA has already proposed some changes for the 2010 Conference and more changes for beyond 2010. I think the proposed changes are very good for the industry, and we’ll have every opportunity for both associations to work together along with some of the SEMA councils. I think some of the ideas I’m hearing are great opportunities for SEMA council programs to work alongside of PWA membership, and it will be good for all concerned. But I don’t think actually “linking” them would work—maybe better synchronization of some fashion.

  
 SEMA NEWS-NOVEMBER 2009-BUSINESS 
 ”Education has been a big topic for more years than I want to remember and working together on it should do nothing but make it better for all of our industry and maybe even other industries.”       —Rick Rollins  


Donnie Eatherly: I’m not sure if you want to link those two in particular together, but I am very excited about discussing with the new task force the possibility of putting something together with SEMA and PWA, about some type of educational function and installation seminars in conjunction with the PWA Conference.

With this new open Conference format in 2010, the possibilities open up for new categories, such as tire and wheels, 12-volt and more to attend and have meetings. It also brings new opportunities to extend the Conference for those categories, to maybe do meetings in the first half and educational seminars and installation seminars in the second. In discussing these ideas with the PWA board and some of the SEMA council leadership and Board members, both seem to agree that it’s just a matter of the timing. You have one of the best industry one-on-one business functions happening, so why not take that opportunity when you have the manufacturers already there to do some hands-on training and education at the same time?


SN: Is there any limitation on who can take part in the PWA Conference?

Rick Rollins: Today, yes, the WD must be a PWA member. But what is being proposed for the future is where SEMA participation comes in. If you are registered as a SEMA-member distributor and a SEMA council member, you would be able to participate. The first step is that being a SEMA council member now qualifies you to go to the Conference. PWA is also looking at what the different SEMA councils represent within the industry that PWA isn’t presently getting to.

Donnie Eatherly: You are correct, Rick. The only thing I can add is that you can also be sponsored by three PWA manufacturer members. In the past, the only way that you could attend the Conference was to be a member of the PWA, whether as a manufacturer or as a warehouse distributor. We decided that it would be better for the future of the PWA and Conference to allow non-members to attend because the manufacturer members needed more meeting partners. This was a way to open it up and get them some opportunities to meet with new people in the industry.


SN: What should SEMA members know about PWA and what should PWA members know about SEMA regarding how the two associations might collaborate for the good of both associations?

Rick Rollins: We’re all in this together. There’s no bad guy, good guy or 800-lb. gorilla in the room. This industry has enough to worry about with the economy, harmful legislation, fuel prices and so on. We need to work together and pull in the same direction. We all need to make money. Our businesses and our associations won’t continue to exist without making money. It’s what puts food on our tables and what pays for all of the good programs that both SEMA and PWA offer. That’s what PWA and SEMA members need to know about each other: We’re all in this together.

Donnie Eatherly: In PWA’s case, I think that the board has heard the members’ voices, and we are making big strides in making this organization a more relevant trade association for our industry. As is the case with SEMA, PWA needs more membership participation at the board and leadership levels to bring in fresh ideas for the board to deliberate and act on. I have personally been blessed with a hard-working, dedicated staff and family at P&E that have allowed me to get involved in the industry, and there’s nothing as rewarding as being able to give back to this industry that I love and was raised in. Through the cross-pollinating of the SEMA councils and the PWA membership, we have great opportunities to bring new business, leadership and direction for both SEMA and PWA.

The current leadership in both associations is more motivated than ever to work closer than before. There have been numerous conversations in the past about PWA needing to merge with SEMA or become a SEMA council, but as I said previously, each association has its strengths, and one of the PWA’s is the fact that it can move much quicker than SEMA on its own agenda. Right now, PWA enjoys its autonomy and freedom to act independently too much for something like a merge to happen. But that should not get in the way of both associations working with this new task force to bring benefits and initiatives that continue to help the industry thrive and prosper. I am very excited about serving in the capacities that I am in both SEMA and PWA, and I look forward to discussing and implementing some of the ideas that we have talked about today.  

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