Buying Power

Bestbuy Distributors Limited

BestBuy


Bestbuy Distributors Limited delivers unbeatable value and service. The independent buying group and warehouse distributor provides automotive aftermarket products to independent distributors, supplying quality solutions at an affordable price.
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The company’s secret to success is its buying power, which allows its member shareholders to compete more profitably – and pass these cost savings on to the end user.

After profiling Bestbuy last July, Business in Focus checked back in with President Jeff Van de Sande to catch up on the latest developments. Over the past 12 months, the company has undergone an exciting expansion of its Mississauga, Ontario warehouse, creating new opportunities for both the company and its members. The expansion was born of necessity; Bestbuy needed more space to store its ever-growing inventory. “There are so many parts we supply – parts to all makes and all models, not just to a specific brand,” Mr. Van de Sande explains. “And every year the car manufacturers are coming out with new models.”

To complicate things even further, a single automobile model will actually utilize different parts depending on what year it was produced. This means that Bestbuy must endlessly add to its inventory, while continuing to stock older parts as well. “If the model year is different, often the parts are different. So every year you get a new car coming out or a new design. You’ve got new parts on it, and therefore you’ve got to carry those parts as well as all the parts from the previous years. We call that parts proliferation.”

Keeping up with all those parts can be a herculean task. “You have to stock more and more and more of any given product line to make sure that you are covering the car parts that are in the marketplace. We put about 100 new part numbers a week into our inventory.”

To accommodate this tsunami of inventory, Bestbuy just added more than 35,000 square feet to its already sizable warehouse. The company also extended its mezzanine system, which expanded the storage space in the existing portion of the facility. “We needed to bring in some new inventory, but we had gotten into a position that made that extremely difficult because of the limited space,” Mr. Van de Sande explains. “We have been able to make up for some significant space shortages that we have had in the past.”

The addition is large enough to enable Bestbuy to expand its current scope and prepare for the future. “We are looking at new opportunities as far as new lines or suppliers that are in the marketplace. [We can] bring new product lines in and look at future growth and expansion, enabling us to further support all of our members that are in the field.” Supporting members is crucial, particularly since each member has a stake in the business as a shareholder. “They actually own the company. So we want to make sure that the ownership base is constantly growing and they are supporting the buying group as much as possible,” Mr. Van de Sande points out. “So the addition was a necessary investment we had to make, and it is already starting to pay off because, once again, we are looking at some great growth this year.”

Bestbuy stocks a wide range of national brands as well as a private label brand; Quality AUTOMOTIVE Products™. As Bestbuy’s in-house brand, the selection of Quality AUTOMOTIVE Products is steered by member demand. Products under this label include everything from batteries, brake parts, chassis parts and CV boots to filters, hub bearings, ignition wires, oil, and strut mounts.

Whatever the specific product, members can count on the quality; every private label product that Bestbuy carries meets Original Equipment Manufacturer (OEM) specifications. “Our private label product is a very high quality product; we don’t want to do any damage to the quality brand that we have established and built.”

Despite the proven quality, the public at large has been slow to trust aftermarket parts in general, so the Bestbuy team works hard to reassure end users that most aftermarket parts meet OEM specifications. “An aftermarket part can be as good as if not better than what you get with an Original Equipment supplied product,” Mr. Van de Sande states. “The challenge is getting that [information] out to the public when you are dealing with the massive marketing machines that they have on the Original Equipment side. Those companies are massive, with huge budgets for marketing their products.” These companies use their generous marketing budgets to convince consumers to return to the dealership for maintenance and repairs.

Consumers shoulder the cost of all that marketing. “You do pay a premium because they’ve got some massive overheads,” Mr. Van de Sande points out. Bestbuy’s private label brands, on the other hand, “don’t have the same type of marketing and extensive overhead that you get with one of the big brands. So the part could be just as good – it could even come off the same production line as the branded parts – but it doesn’t have all the costs built into it that you have from the brand.” As a result, Bestbuy members enjoy the advantages of both quality and savings.

In addition to understanding the advantages of aftermarket parts, Mr. Van de Sande wants to be sure that consumers recognize the importance of regular automobile maintenance. “Getting your vehicle maintained is a grudge purchase,” he admits. “People don’t like to go and get their oil changed. When they are told that they need to spend a couple hundred dollars on new brakes, it is painful.” But, painful as it may be, spending time and money on upkeep can prevent a much more costly and time-consuming problem down the road. “If you take care of your vehicle it is going to last much longer than if you don’t.”

Unfortunately, there is an estimated $12 billion worth of unperformed automobile maintenance in Canada each year. “People aren’t getting the work done on their vehicles that they should be getting done.” If automobile owners aren’t motivated by long term savings, they may want to consider that a well maintained car is greener. “A vehicle that is maintained is running cleaner. Think about the environmental effects.”

To help get the word out about the importance of vehicle maintenance, Bestbuy is a sponsor of the “Be Car Care Aware” campaign. Operated by the Automotive Industries Association (AIA) of Canada, the education campaign gives drivers the information they need to make knowledgeable decisions on regular vehicle care, maintenance and repairs during all four seasons.

Bestbuy supports local charities in addition to public awareness campaigns. With the generous support of its suppliers and shareholders, the company has raised over $700,000 for the Labatt Family Heart Centre at Toronto’s Hospital for Sick Children (SickKids) over the last two decades.

Launched in 1953 and officially incorporated in 1955, Bestbuy has been serving its members for over 60 years. With countless automobiles on the road, every day – and new models being introduced every year – Bestbuy will have the opportunity to serve its members for many more years to come. “There is still a lot of market share for to go after.”

October 20, 2017, 2:04 PM EDT

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