About POja
It was a busy September afternoon in 1996 and while working the counter I received a phone call from a longtime former WD salesperson George Taylor II. He and his sons had opened a jobber store in South Jersey just a couple years back and were going through the same pains that most small and medium size jobbers were going through and still are. George asked me to meet him and a few other jobber storeowners, some I knew and others I knew of, for dinner and to discuss the current state of the local distribution scene. More specifically, we were to discuss the blatant disregard and lack of respect a particular manufacturer had for us as three step customers. A two stepping multi store operation with a small warehouse and a common competitor of most of us had been sold a line of product on a direct basis, a line that had been one that all of us had worked hard at getting out on the street promoting and getting stocking dealers. Now our competitor was not only going to be selling the same line, but was also buying it direct. We knew this meant losing some of the business and creating pressure downward on pricing and causing shrinking margins. We needed to do something to command the attention of the manufacturers so that we were not taken for granted or dictated to. Our WD's did not seem to either have the influence, or chose not to use it in our defense. They were selling most of our two-step competition at the same pricing they were selling us, their stocking jobbers. Collective volume apparently had power.
Ten business owners of fourteen stores met later that month, Tuesday September 24th 6:30 PM at Laurel Inn in Mt. Laurel New Jersey for dinner and we began to put together a plan on ensuring the longevity of our businesses. Some questions were posed. Was there a problem in the differential in acquisition costs between three and two step distribution? Were we getting the marketing support from manufacturers we deserved in terms of both man power and coop dollars? Could we put aside our fears far enough of being each other's competitors to allow us to share some information to help our businesses grow individually? Could we act as a unified group so that we could command the influence needed to negotiate effectively? On a personal level, were we team players? My Franklin Planner tells me that it cost me $30.00 that night for dinner as we split the bill. What a bargain, pay for my own dinner and get the advice and guidance of others that walked in my shoes. Some of the business owners that met that night are no longer in business. Some sold out, some liquidated, and some decided for various reasons not to continue their association with the group. For those that stayed, and those that joined subsequently and stayed, it has made all the difference between just surviving and really thriving.
We set a date for the next month to meet again, and have been meeting every month since then, not one missed. We began to do marketing together immediately. Sharing the responsibilities and spreading out the work amongst ourselves was a division of labor that allowed us to retire some of the hats we wore while putting those with the right expertise and talent in charge of those areas they excelled. We also began to open discussions with our manufacturers about our collective needs. Working with our warehouse friends and manufacturers, we have been able to stay relevant in the market as well as profitable in our businesses. We also shared with each other our successes and failures so that we could accelerate our learning curves in all aspects of our business.
During some of the initial meetings, many gripes and complaints were aired and sometimes solutions were not evident. It was during this time that our name came to be. We jokingly called ourselves the “Pi**ed Off Jobbers of America”, or POJA for short. To this day, we get at least a chuckle from every jobber and rep in this business, as the truth is funny often times, and the jobber has been pushed around quite a bit. We needed to level the playing field. Solutions and ideas started to emerge and over the years, a business plan was developed. The name remains POJA, but now it is not an acronym.
Marketing, buying, professionalism, and sharing are all cornerstones for our collective businesses and group. As a group, we have several ASE Blue Seal Recognized Businesses. An initiative in professionalism of one of our members that has caught on, Today our member stores represent 25% of the parts distributors nationwide with this nationally recognized credential. This is a distinction that only twenty distributors nationwide have. A commitment to excellence in our industry is common; doing the actual work involved to achieve it is not. We congratulate our members for this achievement.
In the early years, a few members started attending the AAPEX show together, looking for niche lines where our local WD's were not allowing us to be competitive in certain categories. They would come back and try out a line, and if it worked out for them, we would then split future orders, selling each other at cost or near cost. The manufacturers would send the product to one member and the member would bring it to the next meeting where at the end of the meeting we split up orders in the parking lot. This continued to grow and expand to the point that it was like a Chinese fire drill in the parking lot of the restaurant every month. We were wondering if the DEA was watching us. Several of us were going to have to buy bigger vehicles just to be able to pick up the monthly load. Getting replenishment once a month was not optimal either, we needed to get a truck to run these incoming orders around to each other.
The POJA Shuttle emerged six years ago. With lots of planning and test runs, we began to run a cube truck from member to member every week. With weekly delivery now possible, we decided we could change our ordering and stocking processes. Members split up the niche lines we were buying direct and began to build up warehouse inventories of those lines so that they could fill weekly stock orders for the other members from their inventory. Simultaneously they could reduce their stocking levels on the other lines since they would be getting weekly replenishment instead of monthly. We split the cost of the truck and drivers equally, and continued to sell at a 2% markup to each other since we were all sharing the workload. The Shuttle allowed these lines to flourish and allowed us to take on additional lines and members. There were logistical limits to the capacity of the shuttle and so as things got cramped and difficult to manage inside the truck, the decision to explore the option of starting up our own WD by acquiring a building was necessary.
As we explored the costs that we would incur in running a facility, we also explored joining already existing cooperatives. Our observations after several visits and calculations were that the existing cooperatives were not offering the services needed by our members, and the acquisition costs of the members were not going to improve over what they could buy at some larger WDs in the marketplace. These cooperatives did not make deliveries, and were not intending to share a computer system, something that we had just started and had realized great benefits. One of our members joined a buying group, APA, and we began to fly the Professional's Choice flag. We were able to tap into some nationally negotiated discounts and rebates as well as network with some savvy business owners.
Buildings were looked at and geographic areas were analyzed. Budgets were made and spreadsheets with proforma were developed and redeveloped. Staffing considerations and management personnel were critical. It took a couple years, and some intestinal fortitude, but finally moving forward on identifying a building occurred. We knew we would need more members and volume to support the upstart, so we began to prospect for new additional members through various networking opportunities. With the market place full of two steppers and vendors that were becoming competitors, it was easy to find jobbers that needed what we had and were going to have and were looking for options if not at least open to them. Several new members joined and the search for a building began in earnest. While the building search was on, the formation of an official entity was necessary.
The members who put up equity to start up the new warehousing business formed POJA Warehouse LP (Limited Partnership). A law firm who had formed a similar cooperative in the past, and that had experience putting these together advised us. POJA Warehouse LP breathed life in January 2008 after sacrificing many trees in legal paperwork.
A building was finally contracted on in October of 2007 and was settled upon January 23rd, 2008. It is still a work in progress. It services its members with delivery, has its inventory online for its members to see and order from, and has WD level inventories in the categories it stocks.
The current members still meet once a month for dinner and to discuss the future of their businesses and now their own warehouse operations as well. Other initiatives that are not mandatory to participate in but in the process of being implemented are a shared central call center and a shared central office. These initiatives are to enable the independent jobber to stay independent while giving them the ability to reduce their overhead and operate efficiently as a multi store operation does.
Our business model continuously changes, as does the market around us. We adapt as necessary, for if we do not, we become another statistic in the long list of closed stores. Instead, we choose to be vibrant innovators that lead the market and that others must react to. George Taylor II, may you rest in peace.
POJA has been very busy these last 6 years since we opened the warehouse. There has been continued consolidation in the industry both nationally and locally in retail and wholesale, thus making our competitors bigger, but not necessarily better. The options for the independent jobber continue to dwindle. In most regions, jobbers are now forced to support a direct or indirect competitor. Several members have successfully sold their business as they retired, some decided to close. For those that sold, they credit their membership in POJA for keeping them profitable and in business leading to an acceptable offer. The difference between selling and liquidating was well worth their investment in POJA!
POJA has grown to more than 20 employees and over 50 product lines with more coming. Incredibly, the warehouse has grown and operated with no bank debt. There are trained staff doing stock orders, returns, buying, stock adjustments, payables, delivery, pricing… all the typical functions a WD needs to do. The centralized call center was put in place with investments of technology and infrastructure. It has been operational since March 2009 handling the incoming calls for jobbers that are ready to centralize that part of their businesses as well as separate their retail counter service from their wholesale delivery business. Those that invested in the same phone system at their locations are able to have quick access to extensions at the warehouse for even quicker responses to questions, as well as between member locations for counter professionals and dispatchers dealing with inter store transfers.
The centralized office was also experimented with and was shown to be an effective way to reduce the dependency on a single bookkeeper at the jobber store. Efficiencies were gained, expenses shared, and buying power was increased. Best practices were shared and the best of those were adopted.
A first rate experienced buyer was hired to manage the warehouse inventory as well as manage some of the store inventories.
Advanced technology continued to be implemented in other aspects of warehouse and store operations. The phone system expense was shared with the call center. A wireless network was set up all across the warehouse for barcode pulling and order check in to make the processes more efficient and accurate. 30 security cameras were installed with DVRs hooked to the internet. Members can see their warehouse operations from their PC’s and even their smart phones. Dispatchers can see when their drivers pull up, or if they are just standing at the pickup counter so they can keep them moving delivering parts even faster to their customers.
Epart was adopted so that members that are not on the shared computing system could see inventory at the warehouse and at other member’s locations and could place orders from them electronically. Items bought from other members were either picked up directly at those stores or are shuttled back to the warehouse and back out to the ordering member location.
A secure member only website (intranet) was created to allow a place for members to retrieve price sheets and share monthly member promotions and other types of documents needed to run their businesses. Having a creative block for a promo? No problem, members can look through the files for ideas to use that other members ran programs successfully.
Our association with APA has continued to strengthen as our treasurer/CFO Ben Yelowitz from Crest Auto Stores was elected to the APA board and has served nearly 6 years on many committees including product and technology. He has served as their treasurer and currently holds the office of Vice President. He has traveled quite a bit networking with many of the members nationwide and has recently visited China on a 2 week tour of factories. President of POJA and owner of Morris Auto Parts Harris Steinberg serves on the APA isuccess committee that explores technology solutions for the members. Over the last several years APA has created a Data Warehouse and POJA has been a major contributor of data as well as given much input to the programming. This has given our buyer access to the movement of part numbers allowing him to put new numbers into our inventory a lot sooner preventing lost sales and creating positive impressions on our members and member customers by being able to quickly source items at the warehouse.
Several members have ventured into the online sales to both wholesale accounts, online retail business and ebay selling. Sharing their successes and failures and leveraging our collective buying power, our members have been able maximize profits, avoid pitfalls and flatten the learning curves of implementing and maintaining these customer service centers.
In addition to our monthly POJA member meetings, we instituted monthly warehouse management meetings where the key individuals in warehouse operations from inventory, IT, office, executive, purchasing, and returns meet to give updates on initiatives to smooth out rough spots, as well as discuss opportunities to improve and grow. Everyone has an action list and has to report back to the group every month so things get done quickly! Members are always welcome to attend to both observe as well as give direct input. Besides emailing members communications, a Notes in Totes flyer was created and distributed with stock orders to make sure pertinent information on warehouse news like new lines, promos, stock adjustments, new numbers and the like get to all staff members of all stores.
Over the past several years POJA has made some special buys in Freon, salt, antifreeze and other commodities where the pricing can only be truly competitive when buying in truck loads. Most of this was presold with some left at the warehouse to help fill in after the sale. With the volume of business that the POJA members generate, and the centralization of purchasing, the warehouse has been able to import some product categories and get container pricing allowing for pass through of additional profits to the members helping them to be profitable and competitive.
For the last 3 years a few customer accounts have been opened as the opportunities presented themselves, however POJA has not been actively seeking that business as there was much to accomplish before going out and prospecting. Pricing schedules and changeover programs and delivery logistics have all been reviewed and the rough edges smoothed where identified.
In early 2013 our warehouse turned 5 years old, our financials were rock solid and banks were eager to talk with us. Aggressive expansion plans were developed using bank financing while also leveraging our well established relationships with vendors. New lines and categories were identified and deals negotiated. A Business Development Manager position was established and aggressive interviewing took place into early 2014 when the best candidate was identified.
POJA looks ahead to continue to grow aggressively over the next two years in both its customer base and member base as the options for independent jobbers to remain independent dissolve. Being associated with POJA gives the ability for a jobber to buy from a vendor that first they don’t compete with, second that is owned and managed both by key employees and by jobbers, third that understands and caters to the jobber’s needs, and fourth the jobber customer/member actually has a real say and influence in all aspects of the operations of that vendor among many other benefits. The needs of the members and customers of POJA are not in direct conflict with POJA Warehouse’s financial motivations as they are with other vendors that have policies, pricing, procedures and operating hours to maximize their profits. As a cooperative effort, together we can and do make it happen.
Harris Steinberg
President
Morris Auto Parts Inc.
POJA Warehouse LP
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