FLIP THE SCRIPT
Building Retail First, Propelled Benzeen Auto Parts Forward
Thirty percent growth for a company for one year is pretty good. Thirty percent growth year-after-year is outstanding. When George Trunyan started his auto recycling facility, Benzeen Auto Parts (formerly TLS Auto Recycling) in Rancho Cordova, Calif., in 2010 it made $600,000 the first year. Today, Trunyan expects to close with $4.4 million. The growth is due to Trunyan’s experience with finance and his willingness to take some risks.
Trunyan started out in auto recycling purely by circumstance. He and his family came to the United States from Armenia when he was just five. Trunyan said they had no money for a formal education, so he went into banking.
“I thought it was the best to get into an industry that I could go up in,” he explained.
He started out at 18 as a bank teller, moved to personal banker after four months, then was promoted to a business banker and held a vice president position by the time he was 24.
“I would pinpoint my business expertise to that,” he said of his experience as a business banker. “Being promoted to manager taught me managerial skills as well.”
Unfortunately Trunyan was a victim of the 2008 banking crisis and lost his position. He took the next eight months to really research his next venture.
“I have a couple uncles in the auto recycling industry and my dad pushed me on its potential,” he said.
Trunyan ultimately made his decision to go into auto recycling while visiting a successful yard to better understand the process. He said he witnessed the owner having a dispute with a customer over $10. He remembered the owner telling the customer, “I’d rather break this part then sell it to you for $10 less.” Trunyan said the owner did break the part.
“I saw him driving this expensive car and I thought, ‘if he can treat his customers like this and still be successful, then I can be even more successful with my skills.’”
Trunyan leased a half-acre facility with a 5,000-square-foot warehouse in 2010. The business came with a salesperson, inventory person and dismantler - who are all still with the business.
“I was really able to fast-forward my auto recycling knowledge with these guys,” Trunyan admitted.
The first thing Trunyan did was offer a one-year warranty on parts. He also focused his attention on putting parts online to sell to retail customers.
Trunyan explained that space is at a premium in California. Most yards are leased and the land’s owner isn’t selling. Yards usually only specialize in one or two makes since they don’t have the space to warehouse enough parts from multiple makes to be competitive in the wholesale market. That’s why Trunyan made retail sales his first priority.
“A lot of yards don’t care about retail,” he said. “But we’ve always been too small to compete with wholesale.
“We were the first yard to start taking pictures of our parts,” he added. “If you’re going into retail, you need to have an image.”
Trunyan hired a technology company to build software to accommodate photos of the parts. Ninety percent of his inventory is photographed today. The company also helped push his parts to the top of Google searches.
“I’ve spent a lot of money to gather part numbers and to put pictures on the website,” he admitted.
Benzeen Auto Parts also posts YouTube videos on every vehicle to show customers that the engines run, etc.
In 2013 the business moved to a bigger yard, one with three acres and a 10,000-square-foot warehouse.
“I’ve always taken risks, but this was a big one because of the build out,” said Trunyan. “When you’re growing, your costs grow too.”
Trunyan invested in more technology for his salespeople, which he hired from outside the auto recycling industry.
“I’ve hired from call centers and the banking industry,” he said. “I’ve given them the tools so they don’t have to know what a part looks like, because it’s pictured.”
Trunyan said he has a great staff that is focused on customer service. The business now has 26 employees, with very low turnover.
Back: (From Left To Right) John Trunyan, Arthur Mirzoyan, Vito Mirzoyan,
George Trunyan, Sachin Satarkar, Jose Hernandez, Aram Karagadyan
Front: (From Left To Right) Daniel Manukyan, Ivan Fedykiv, Dimitri Moscaliuc
Trunyan said they’ve grown so much with retail, that he now has the ability to focus more on wholesale. The company just added its ninth make to its inventory. Trunyan buys mostly foreign vehicles, Asian and European, but is planning to move to domestics.
In 2014 the business was 60 to 65 percent retail, now it’s more 50 / 50.
In fact, it’s this growth that prompted a name change for the company. The original name, TLS Auto Recycling, stood for Toyota, Lexus and Scion. As the company’s makes grew, the name didn’t fit. Plus, Trunyan said there were other auto recycling companies with similar letters. So he decided to change the name to Benzeen Auto Parts. Benzeen is German for petrol. It was a name he heard his dad use over the years. It was also easy to remember, but not common.
“Our storyline is we’re changing the name because we’re doing more makes and models,” he said. “We’re really trying to sell the part, not the company.”
Trunyan is looking to move the business to an even bigger property with 10 acres in 2017. He also is relaunching the company’s website, www.benzeenautoparts.com. His website can track customer information and push parts to Google. It also allows users to check out on one screen, something Trunyan said is important to his younger customers.
Trunyan predicts in five years the industry will see fewer recyclers, but the ones who are left will be bigger. He wants Benzeen Auto Parts to be one of those companies.
“We’ve grown to become the second largest - in volume - in Northern California. Most of our wholesale clients call us second,” he said. And although he wants to be first, he’s happy with how far the company has come.
“We’ve proved everyone wrong. Everyone thought I was going to fail. That didn’t happen.”