Jeff Gilkinson of AUVECO

(upbeat music) - Welcome to Built in the Bluegrass, a podcast dedicated to cool stuff made in Kentucky. We wanna share with you how it was made, why it was made, and the story behind it. And now, here's your host. - Hello everybody, and welcome to another recording of Built in the Bluegrass. I'm Griffin Meredith, and today we have Jeff Gilkinson from Aviko, aka Auto Vehicle Parks Company, we'll let him explain a little bit more about that later. So just wanna do a quick introduction. Today it's a little different take on things, we talk a lot about people who take something from a raw material, turned into a product that we use today, and Jeff doesn't exactly fit that mode his company does more with taking the actual parts that exist from many, many, many different people putting them together. He's gonna explain a little more about that, but getting it out to the end user, which is the consumer that uses his products. Nonetheless, let's go ahead and get started today. So Jeff, just tell us a little bit about who you are, what you do every day, why it continues to be successful and produce, awesome products that you'll produce. Tell us a little bit about what you do and how you do it. - Sure, so Aviko, which is also known as Auto Vehicle Parks, it's based in Cold Spring, Kentucky, and we're a master distributor, specialty clips and fasteners that are used in the automotive collision aftermarket. So what we do is we work with a network of manufacturers that manufacture for us all the clips and fasteners that hold your cars together, essentially. And we bring them into our facility in Kentucky in very large quantities. We typically buy things in lots of a hundred thousand up to five million at a time, depending on the piece. And then we break those down under our brand and sell them in packaged quantities that somebody in the collision shop would need. Like they may need 10 screws or 15 clips, they don't need to buy five million at a time. So our value proposition is being in the middle there to source product, to get it manufactured accurately, and then to sell it in the quantities that people need it for in the end-use space in the collision market. - Cool, so without using the simple term of middleman, tell a little bit about why that is important. Like how come we are not just taking the parts from the actual widget maker to the actual person who needs to put it on their car, whatever it may be? - That's a great question. So there are over 200,000 collision shops in the United States and manufacturers that make all of these parts. When they set up to run a screw or a clip or a fastener, they're typically running hundreds of thousands or a million of them at a time. And they don't want to then deal with a customer that may only need a hundred at a time. And so they have distributors in between the manufacturer and the ultimate end user to help get the product from very large runs down into package quantities that make sense for an individual in those 200,000 shops that are scattered around the United States. - So then that does sound a little bit like a middleman. So is there a way to, could somebody go around you? I mean, could a manufacturer who is just distributing to Ford or to Toyota and correct me if I don't know exactly how those supply chains work? But what is the value proposition that you bring to put in the middle besides the quantity aspect of things? What are some other things you do that you hold more, you're able to get them there quicker? Tell us a little bit about why that matters because the manufacturers, that's one thing we often find is the actual widget maker is not always good at getting their product out. So a lot of times they're getting their product out is a dilemma, especially whenever they're starting out. So tell us a little bit about why that isn't just a superfluous part of this process. - Great question. So most of the manufacturers that we work with that make these parts make anywhere from maybe five to 50 skews. They have a very narrow group of products that they manufacture. And the value we bring is that we sell 27,000 skews. So we're able to work with all these different manufacturers to aggregate a product portfolio that actually serves roughly 35 years worth of makes and models that are on the road today. So we're able to pretty much have anything that anybody would need or a vehicle that is in service on the road today. And at the collision shop level or at the manufacturing level, there's really no way to replicate that with trying to buy from all the different manufacturers that you would have to be able to get all those parts and from the manufacturer to actually manufacture all those parts. It takes a number of manufacturers to be able to deliver all those different products to market. - Got it, that painted a picture for me because whatever you're dealing with, we've got some old printers or old different, different anything you've got that is some are old, some are new. You're just saying in under no circumstance, it takes a certain scale for this to even be a viable business whatsoever. So, okay, cool. So let's talk a little bit about why either you're founder, tell us a little bit about you, how you got involved because what we find a lot of times with manufacturing companies in Kentucky is, you know, there's a reason why they're here and it's never what we thought. You know, obviously with bourbon, sometimes it's limestone or you know, different things, you know, have to do with the weather, the temperature of this or you know, there's certain things that have to do with the river town. There's all these different aspects of why you're here, to talk a little bit is it geographical? Is it, you know, political education? Social economic? What are the reasons that you're in Kentucky originally and how come since you've been with them this state? - Sure, sure. So the company was actually founded in 1916 in Kentucky. I have family, the original family owned the business for 40 years and then sold it in 1956 to another family. That family owned the business from 1956 all the way up to 2018 when they wanted to retire from the business and ultimately sold the business to private equity. During the time that that family owned the business, they moved the location three times but all three times within the state of Kentucky. And that owner actually and his family lived in Ohio and they wanted to keep the business in Kentucky for really two primary reasons. Number one, they felt like the business climate was more favorable to businesses than Ohio was at the time. And they also felt that they were able to attract the type of worker that came to work every day that was reliable, dependable and worked very, very hard and was very loyal to the business. The facility that we're in today was built in 2000. It's a state-of-the-art facility and when the business was purchased in 2018, we never even considered relocating it out of Kentucky because we have a favorable aspect. Just being in the state of Kentucky, it's very favorable to manufacturers and distributors and it does. We are able to attract a very loyal workforce here. And so we've never even contemplated leaving the state. - Yeah, and you bring up an interesting aspect because whenever I first started working with businesses in Northern Kentucky, we're coming from central Kentucky or you're operated out of Frankfurt. And it's like how much of your world depends on the Ohio and Cincinnati market, but how much of your reality every day is controlled by people in Frankfurt and people that you don't necessarily see every day. What type of problems do you feel Kentucky has or what kind of benefits do you think Kentucky has when it comes to having that relationship with a major metropolitan area such as Cincinnati. And then right across the river is a major, I think manufacturing hub, distribution hub, many of that said the airport. So what is the pros and cons of being where you are in Kentucky whenever you're controlled, I control this not the right word, when a lot of dictation comes down from the market that's across the river. - Sure, sure. You know, I think one of the interesting things that we found in Kentucky is we tend to attract more of our workforce from south of our location than north of our location. And we actually find that there's a lot of folks that don't have any desire to cross the river in either direction. So when you look at our workforce, very few of them actually are from Ohio and it's not because we don't recruit there. But a lot of the folks that are in Kentucky like the idea of being able to come close to a metropolitan area, but not have to lead the state and go across into Ohio. So we kind of get the best of both worlds here. And we end up bringing a lot of employees that are actually from more rural parts of the state. And I think that speaks to just the work ethic and the loyalty and the dedication that we get as well. - Well, let's get a little spicier than that. What about from politics or culture? What are some things you mentioned the business climate? So tell us why. You would have a lot of people argue that Kentucky, you know, look at our sales tax. Look at what we have property taxes in certain metropolitan areas. You know, get a little more, I guess controversial about why you think Kentucky's better than Ohio in that regard. - Mom, you know, I think that. You know, the state in our, you know, for instance, in this state, it's a right to work state, first of all, and, you know, we have some, our businesses is unique in that part of our workforce is unionized and part of it is not. And, you know, just with the right to work laws in the state of Kentucky, it's made it very easy for us to work with the union that we work with and allow to coexist with the portion of our workforce that is non unionized. So that's been very beneficial to us. You know, from a, from a government standpoint, I mean, I think that the government in Kentucky is pro business and it's not to say that it's not, you know, Ohio as well, but we've, we've always felt like Kentucky does the right thing for its businesses and wants to keep strong businesses in its state. Well, let's shift gears ago a little because I, yeah, I wanted to get that opinion because you hear a little bit of everything when you're talking to different business leaders and different people that are in, you know, different sectors that have different opinions and oftentimes it is more politically motivated and truth motivated. But I just like to get different people's opinions, I'm not trying to put you on the spot, but just want to, you know, we don't, we don't want this to just be an info March, so we want to be a real conversation so somebody can get to know, you know, how it is, you do things, what it is you do and why you do them. So you've mentioned a couple of times about the culture people have shown up for work, people have been from, you know, the south of the river Morso, then, you know, where you all are, which is getting a little closer to the border. Someone times when we're discussing, you know, the successful businesses, it is, it does have to do with culture or a process or, you know, a philosophy that that works, you know, sometimes it's something as cheesy as we take care of our employees, you know, other times it's. Just the founders view or if you've ever read, you know, Simon Sinek start with why, you know, the reason behind things. So tell us a little bit about why, you know, I guess the why of your group or what makes from a culture perspective, you all maintain the trajectory that you've been on. Or have you, I guess for that matter. Yeah, great question. Now, I think our culture is all around serving our customers and, you know, when you think about it, our end consumer is a collision shop, their goal is to get a car repaired and back on the street as quickly as they possibly can. And, you know, we sell little tiny clips and fasteners that at the end of the day are an ancillary part of a collision repair, but they're very important. They can't complete the repair without it. And so our goal as a business is to get our parts to our customers on time and accurately every single day. And that's been the rallying cry at this business. I know for the last 65 years in the time that I've been here and the time that the family that owned the business before it. And really everything that our employees do every single day, they take a lot of pride in making sure that we serve our customers and help be a piece to helping a collision shop get a car back on the road. So a lot of times we say that you know, people don't realize. And I would say a clip and a faster is the perfect example of something that nobody cares to talk about unless it's actually in your business. A lot of times we talk about that nobody just takes everybody takes for granted the chair they're sitting in was, you know, was manufactured the car their driving's got all these million pieces to it or ever what the number is. Where is something or sorry, where would we typically see your products is it just every car, where would we have heard of any of your brands. How would we feel this in regular culture, I guess or in our everyday lives like how do I know that Jeff company affects me. Sure. So, so our brand is very well known with the professionals within the industry, but in the retail space to do it yourself market. Our brand is not very well known. Not all the shelves at advanced auto parts or something like that. It is on the shelves in advanced auto parts, but it's in advanced auto parts packaging, not not in a vehicle packaging. So talk a little bit on that while you're at it, too. Yeah, so, so we serve customers like Napa auto parts advanced auto parts and but the companies like that that are selling to, you know, in the retail environment, they want their brand on the package, not, not our brand. So, so we package in in their packaging in our facility and and ship that to them as if it's if it's their product. That's that's one of the value and services that we provide. We've got about 12 companies that we work with where we private label for them and and our goods are sold in in their packaging. Got it. So, back to the how would I see you. I mean, I guess I'm not going to see your name then if I'm shopping at advanced or if I take, you know, I get an accident that somebody from state farm that hit me and I take it to the repair shop to get. I'm not going to see your price. It's just going to be like, hey, did you notice this little clip on my car was actually made here. You would never feel see it would only be just y'all behind the scenes. Sure. Sure. Our our our logo is not on the individual parts that we sell typically what's on the parts of the cell is the is the OEM number, which allow somebody to identify what that what that part is. But our parts are are also somewhat hidden in a lot of respects on the car. So they may be used to hold your door panel on. They may be used to hold the rocker panel onto the wheel well. And today's cars, you go to do an oil change. A lot of cars, you open the hood. It's got like a plastic cover over the top of it. And that plastic cover is is held down all around the perimeter using our our clips and fasteners. Same thing on the on the undercarriage of the car where you have skipped plates and things like that. So the passengers are what holds that to the vehicle. So they're parts that people don't necessarily think about unless they get in situation where they have to re attach something to to the vehicle. Got it. So if so then that's it. There's the consumer. What if I am the auto body shopper on the manufacturer across the street that, you know, do you feel like there's any way that you could grow from access to a certain community, meaning do you know everyone around you that could benefit from the stuff that you do. How, I guess how can we get your, you know, your product out there better and who do you need, who do you need access to who do you work with, who makes, you know, your life easier, who makes your sales go up, who makes, you know, I'll vehicle a stronger company. Sure, sure. So we work with a nationwide network of distribution partners. So, so our distributors cover all the collision shops across the United States. And so we work through them to get the product ultimately into the collision. Shops that that are using the products. Just like a U line catalog that I get sent in the mail every quarter that tells you all the things that I can order. Very much so. So yeah, we have we have a catalog catalogs known as the encyclopedia in the industry with our 30,000 skews in it, but. But yeah, I think, you know, one of the biggest things is just awareness is that, you know, sometimes we find that people just don't know where to go to get some of the parts that we have. And so making our product more widely known is something we're constantly working on. And this day of of e commerce and websites where we've been making a lot of heavy investments in trying to drive more people to our website that that haven't need for these kind of products. So that when someone is doing searches, they can find they can find us so that we can hopefully help them get what they need. So the, you know, your catalog your master distributed that's more than the e commerce arm or do you even have an e commerce arm? We do have an e commerce arm as well. Yes, we do about 40% of our business through our e commerce channel. But again, that's ultimately that's our district distribution partners that are purchasing through the e commerce channel, but, but we have lots of their customers that actually use our site identify what they need and then they ultimately purchase through the distributor through our e commerce channel. So on any given day, so I presume part of your service to your clients, a lot of that has to do with speed, you know, I want my car back quickly. How many parts on any given day do you feel like you have in your warehouse or do you know that are waiting to get distributed or to get out and other people's manufactured parts sitting in your facility, they need to get some use somehow, how many do you have their house and typically take you take you to get it out the market, etc. Sure. So we, we inventory close to 30,000 individual skews and we sell, we sell the skews in a couple of different ways, the number one we sell is we sell them in our packaging, which is typically 10 in a box, 15 in a box or 25, depending on what the individual part is. And we actually ship about 20,000 of those boxes a day out of our facility, not 20,000 individual shipments, but we'll have a customer that buys 100 or 50 or whatever, but we have about 20,000 on average boxes a day, they go out of the facility. Meaning individual packaged individual packaged versions of 10 or 30 or a thousand correct correct, yeah, and our standard turnaround time is is if somebody places in order by 11 30 in the morning, it ships that same day and everything ships within 24 hours. So that's a great logistics thing that we hadn't talked about yet whenever we were talking about the plus of Kentucky and that's one I hear a lot, you know, if you're in Kentucky, you can be what is it if you're in the local market, I think you reach two thirds of the United States and eight hour drive or the population or something to get that stat right before we go live, but how much does proximity, not just shipping, but how much does Amazon coming to your backyard effect. you know, in Northern Kentucky with the stuff that's going on there. What about UPS being, you know, just an hour and a half down the road with the hub, you know, how does those logistics assist you whenever it isn't a factor at all? Or could you do your job from Portland, Maine? As a factor. No, I think, you know, we're located in Northern Kentucky. We're seven miles south of Cincinnati. We have great access to I-71, I-75, the 275 loop. And so, yeah, logistically, it's very easy for us to get on to an interstate and get our product moving. We do a lot of work with FedEx and UPS. We have, you know, multiple trucks in here every single day. And no, this is just a Cincinnati itself. This greater Cincinnati area is a very large warehousing and distribution hub. And it's a great location to be a distributor because there's so many avenues to move products. Yeah. And we hear that from a lot of manufacturers who make things and you see whenever they're near Cincinnati, they're near Louisville, the big push is, well, we can get it out quicker. You know, we're able to make these things happen when the hub is right here. You know, it doesn't have to go from Augusta, Georgia to Louisville to Portland, Maine. It goes from Louisville or oftentimes with Amazon now. It goes to the facility at Northern Kentucky Airport to the destination. So that is an advantage whenever it comes to shipping. So I was just curious how that affected your business. All right. So let's, you know, as we start to wrap up here, tell us just a little bit about what you want people to know. So what is one thing maybe that, you know, about your industry, about your business, you know, we don't want to hear you. Oh, we're the greatest and customer satisfaction number one. You know, tell us something we don't know about your business. Like what is something that really does, you know, make you all tick? And then it could be the industry as a whole or something that you don't understand. We get a lot of good answers when it comes to this. Make it why your business is interesting and how, you know, how it works. One thing you wish we knew. Sure. Sure. It's actually probably one of the things we're most proud of in our business. We average bringing 300 new products to market each year. We have a dedicated team of new product development folks that their entire mission in life is to make sure that we have every possible clip and fastener that somebody's going to need on a vehicle. So they basically spend months of time each year as new makes and models are introduced into the market. There are services out there that essentially we have CAD drawings of automobiles where they go in and essentially break down the car virtually and look for all the different clips and fasteners that exist on these new makes and models that we don't already have in our portfolio. And then we work with our manufacturing partners to reverse engineer them and bring them to market. And you think about that 300 to lows a year that we're bringing to market. That's six new products a week. And so we're really proud of the fact that we've, you know, generated this massive pipeline so that every week we can bring these new products to our customers so that they always have what they need for their collision repairs. Yeah, but CAD does help with that. I could imagine you 50 years ago having to deconstruct it. Whatever it was Pinto at the time to say, hey, here's what this fastener looks like. Let's, let's, let's repeat it. So back to my question about how many, how many do you, how many individual fasters you think you have at your facility? Is it in the millions every day? Like is it? Oh, yeah. Yeah. I mean, with our 30,000 skews, I mean, there's some skews that we have right now. We probably have five million of them in stock. So I mean, it's hundreds of millions of fasters that we have in our, in our facility. And each of those products probably worth very little in and of themself, but combine it together. You know, it ends up being something that everybody has to have. You know, I've said it before on this and I'll say it again, everybody's got to have a job. You don't think about, you know, you don't think about that being what somebody does every day, but but I get it. All right, Jeff. So if you would just give us your contact information, we'll actually put it in the show notes whenever we're done here. But just so that anybody who listens whether they come to your website or stay on social media, what's your website? How can they get in touch with you? If they need to or who'd you like from getting in touch with that they think, yeah, I get I really got a need for this. Sure. Sure. So our website is veko.com. That's a-u-b-e-c-o.com. And in my email address is Jay Gilkinson at veko.com. That's j-g-i-l-k-i-n-s-o-n at veko.com. Good deal. All right, guys, that is another episode of built in the bluegrass hearing a lot about the actual distribution of what I didn't think there's very many smaller parts on a vehicle. And I think I remember Jeff telling me one time what makes sure I was a business tick and he's like cars on the road. So you know that it takes all kinds to see what's going on and and to learn about your business. So I want to thank you Jeff for being on here today. If anybody has any questions, feel free to reach out to us or Jeff just put this contact information on there. So thanks everyone for I'm Griffin Meredith, signing off from built in the bluegrass. Thanks Griffin. Thanks so much for tuning in to this episode of built in the bluegrass. We hope you're leaving this episode with a better understanding of the cool stuff made in Kentucky. If you haven't done so already make sure you're subscribed at the show. That's where you'll get notified as new episodes become available. Until next time. 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