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IP Interview
Published May 31, 2024

O'Reilly Auto Parts: Customer Segments & Profit per Vehicle Type

Executive Bio

Former Sales Manager at O'Reilly Auto Parts

Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

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You said O'Reilly was special?

Yes, no other company I have worked with or had contact with conducts demographic audits like O'Reilly Auto Parts. They really cornered the market by determining the types of cars, the financial demographics, and the characteristics of people living in a particular area.

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Why would they do this? I would think that because of their larger scale, they could actually be cheaper.

National accounts are generally more expensive. This is primarily because, at the national account level, it's about the warranty and the brand recognition. People recognize names like Grismer, Tire Discounters, and Valvoline. They choose these brands for convenience, believing that a national chain will offer savings and a reliable warranty. For instance, if you have your brakes serviced at Grismer in Dayton, Ohio, and then experience issues in Florida, you can visit a Grismer there and have your car serviced under warranty. Conversely, if you use a local mechanic like Tom in Dayton, Ohio, and encounter problems in Florida, you would need to save the parts and wait to return to Ohio to possibly get reimbursed by Tom, depending on if he offers a warranty on labor. Therefore, people pay for the convenience of a national warranty, not for lower prices. It's inconvenient price-wise but convenient for the warranty coverage across the United States.

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