H & H ‘Backs In’ To Business Success
Zane Malcom understands the importance of running a smart and efficient “back side” to an auto recycling business .
PHOTO: KATIE ARNDT
Zane Malcom always knew the “front side” of the auto recycling business, how to core motors, dismantle vehicles and sell to customers. But the co-owner of H & H Auto Parts, LLC credits his focus on the “back side” for the company’s recent success.
“When my wife and I bought the business in 2010,” he said, “we hired Robert Counts of Counts Business Consulting, and together we really studied the numbers. As a result, we’re able to accurately buy vehicles based on sales. We don’t just buy a certain number of cars; we buy what is needed to generate a certain sales figure. For example, it might take 20 cars or it might take 35 cars to hit the goal and that’s what we’ll buy. We’ve gotten pretty good at calculating it.”
Zane knows the percentages for all departments at H & H Auto Parts and not just vehicle parts sales. He’s drilled it down to the basic level, core sales, scrap sales, freight percentages, etc. He even figures in wages and overtime. “The cost of salvage is too high, so running the back side of your business is really necessary in this economic climate,” he acknowledged.
H & H Auto Parts is a business close to Zane’s heart, and one he joined in the fifth grade - and never left. That’s because it’s a family legacy. “I’d help out after school and during the summer,” he remembered, “cleaning, coring motors, dismantling. I started selling at about age 15, and joined full-time after I graduated.”
Zane and Joscelyn Malcom are third-generation owners. Zane’s grandfather, Kirk Herrington, is the original founder, but he didn’t set out to start an auto recycling operation back in 1959 when it first opened. “He opened a body shop,” said Zane. “Of course, to get the parts that he needed to fix the cars, he’d start keeping some vehicles on hand. When it became a big enough collection, it became a salvage yard. Officially, we switched to full-time salvage around 1980.”
That’s about the time that Zane’s parents, Don and Gayla Malcom, took the helm. They’re still in the business; they work for their son now. It also won’t be long before there’s another generation involved. Zane and Joscelyn’s daughter Autym has also worked at the business since she was young. Now she’s studying accounting and business management at the University of Omaha with an eye on joining the company upon graduation.
These days, there are four businesses and three locations at H & H Auto Parts. The original location in Cozad, Neb. is the home base. The Malcoms bought the Grand Island, Neb. location in January 2012 and a location in Loveland, Colo. in July 2013. H & H Axle is a fourth business, but it’s based at the Cozad location. It’s about a 300-mile spread between locations, and Zane splits his time between each. He calls Loveland “the growth of the company” and spends a couple of days each week there. The remainder is mostly at headquarters in Cozad though he gets out to Grand Island once every two months or so. That’s a smaller operation with just three employees.
The sites are managed together, however, with meetings conducted via Skype or conference call. That’s not to say there are some differences.
“Loveland is a more demanding market,” Zane noted. “It took some getting used to. Customers in Nebraska would wait a day or two for their parts. In Loveland, they wanted them same day. You have to get good at your logistics.”
The business is diversified in that it sells used, remanufactured, OEM surplus and aftermarket parts. “I always felt we should be diverse in a small business,” said Zane. “If it’s slow in one area, we’d be busy in another, and more consistent overall.” Their website features a tool that focuses on differentials, the Differential Wizard. Customers enter the make and model, and get a list of differentials in stock. “The Differential Wizard is supported by Randy’s Ring and Pinion Service,” said Zane. “It’s an attempt to sell more parts.” An ecommerce site is in the future as well.
Through it all, the customer is the focus at H & H Auto Parts. “We’ve always taken really good care of our customers,” said Zane. “We’re even selling parts to some of the same customers that my grandfather had.”