A Core Philosophy: Inventory As A Growth Engine in Modern Remanufacturing

In this episode of Know to Grow, host Chandler Kohn speaks with Billy Stolberg, CEO of A&A Midwest, about the inner workings of the automotive remanufacturing supply chain and what it takes to run a large, inventory-driven business. Drawing on more than 35 years in a family company founded in 1949, Billy discusses why remanufactured engines and transmissions remain in strong demand, key trends shaping the industry, and practical lessons on scaling operations, managing space and inventory, and building a skilled, dependable team.

Chandler Kohn: Hi Everybody. It is February 11th. Welcome back to know to Grow, a light to heavy duty podcast hosted by your host Chandler Kohn with FOCUS Investment Banking. Today I have on Billy Stolberg, CEO of a a Midwest, an engine core and transmission supplier to the remanufacturing industry. Welcome to the show, Billy. Please tell us a little bit about yourself and Ana Midwest, who you are and then we’ll hop into it.

Billy Stolberg: So I am, I have been in the industry 35 years. Family business a a Midwest started in 1949. When I started in the industry, it was still very, very, very primitive. We actually used to load the parts out loose and when I started, I worked my way up from the ground up. I did every job there was cleaning. Scrap out of the mud. Sorting parts, separating rods and pistons and then we moved into a modern facility. As time’s gone on, as everybody knows with technology, we continue to modernize and. Operate in a much more efficient manner. And today ANA Midwest is 50 employees. And we process approximately 2,000 engines every week and purchase about a thousand transmissions every week depending on the part as. To what we do with them. But it’s all geared towards supplying into the remanufacturing market domestic and worldwide.

Chandler Kohn: So in the value chain, tell us a little bit about why kind of The Jaspers and LKQs of the world don’t get into what you do necessarily and why you don’t necessarily get into what they do.

Billy Stolberg: So as far as the remanufacturer trying to source their needs from a salvage yard there, there’s a multiple of reasons why that won’t work for them. First of all is, you know, like any major manufacturing company, an LKQ and a Jasper, you know, they’re each remanufacturing about 1,000 units per day and as needs come up for production, they’re very specific needs and the kind of volume they’re doing, if they try to source themselves on a site by site basis, they would have to hire a team of people full time and they’d have one or two pieces coming in, you know, as many as, you know, two, 300 pallets a day in the hope that they could actually find what they need. As far as me getting into the. Remanufacturing side, I personally know that the side of the business I’m on is actually the better side of the business because we are, you know, in simple terms, a commodity broker. Difference between us and some other brokers is as brokers will just broker parts from point A to point B and never Touch them. Difference being here is we actually take delivery of everything that way. When a reman like a Jasper LKQ needs a hundred of the same number, they can call one house and get all hundreds at one time.

Chandler Kohn: It’s helpful. So you know, the listeners who may not be on the reman side, you know, tell us a little bit about the value of going with a remanufactured engine, transmission or an internal part over a brand new aftermarket or OE part.

Billy Stolberg: Well, I mean first and foremost in today’s world is price. Obviously a reman part is going to be less money than a new part. But in addition to that is when the OEMs produce new part numbers, new engines. And, and in today’s world, you know, an engine run, you know, two, three years is about max. Even if it’s the same leader size. They’re constantly changing stuff on them when they’re manufacturing these. Obviously in their engineering process, they think they’re making the greatest high quality engine in the world. But once they get out in the. Real world, they discover there is failures in them. An example of that right now is, is the GM recall on the 6.2 LS motor, 22 to 22 and up where that’s.

Chandler Kohn: That you’re like, that’s in your like Yukon type of model, right?

Billy Stolberg: Yes, yes. Yukons, Escalades, high end Chevy pickup trucks, like the Denali pickup trucks. And they’re having all kinds of problems with them. I actually have a two vehicles with that engine and one of them, the engine blew at 11, 000 miles.

Chandler Kohn: Personal vehicles.

Billy Stolberg: Yep, yep. So. So when you get into the remanufacturing process and you have an engine that has a failure like that, you determine what is actually failing on the engine and then they can make improvements to the blocks to the cranks in order to alleviate that problem going forward. You know, a good example of that would be, you know, if there’s a problem with oil flow in the remanufacturing process, they could drill an extra hole in the block leading into the cams and in order to increase the oil flow so as not to spin the cam bearing as an example.

Chandler Kohn: So you’re saying if there was an engine like that, you had that kind of blue 10,000 miles in. Right. It gets remanufactured that engine, after they figured out that there was an issue, it could actually exceed OE specs compared to coming off that production line, you know, a year earlier. Right. Is that what.

Billy Stolberg: Absolutely. Because when you go into the remanufacturing process in a remanufactured part, you know, they come in with everything new. So, so it’s really a brand new engine for all practical purposes. The only difference is, is they shave a few thousandths of an inch off of the insides of the cylinder walls. And the crank journals, etc just to give you a clean, perfect finish again. But then they can, yes, they can improve the bearings, they can improve the rings. You know where they, you know you. Have, you have an engine that, that, that there’s a problem with the cylinder heads dropping valves. You know, in the aftermarket somebody can come out with a, with a different. Type of valve that’s going to, going to be more durable and hold up better.

Chandler Kohn: So one of the things that’s driving new vehicle prices outside of interest rates, just the sheer MSRP price of passenger cars and trucks is the compl of the new technology. Whether it’s fuel systems or the actual engine or transmission itself. Has this trend positively impacted the industry? And if so, how much?

Billy Stolberg: So of course as the cars get more expensive, fixing your used car becomes more attractive. So there, there has been some increased sales growth on the remand side. When interest rates went up also, you know, the cost of ownership for that vehicle went up. Anything that’s related to the cost of ownership increasing is always going to be beneficial to somebody going to a used alternative or a remanufactured alternative. So you know, as the remand has also benefited. So, so I mean also all the used salvage yards and what have you because you know, the average person in this country just can’t run out and buy an average cost today. 50,000 for a new car.

Chandler Kohn: That’s true across gasoline and diesel heavy equipment. So maybe like you know, mining equipment. Right. And then marine. What key trends are you seeing across the space? Maybe the last 10 or 15 years.

Billy Stolberg: So actually one of the biggest trends right now, and it’s really only over the last five years is you have a lot of the major fleets trending away from diesel vehicles and going back to gasoline. Because the diesel vehicles a have gotten more and more expensive also. And the cost of the diesel fuel is not. When I was younger, when I started in the industry, diesel fuel was cheaper than gasoline. Today it’s the opposite. And the whole idea, unless it’s a heavy duty application where you need that diesel engine, that diesel horsepower, but for a lot of these mid range fleet type applications, it used to be they would buy the diesel because of the economy of the fuel being less money, where that dynamic is gone.

Chandler Kohn: Now, so you’re talking about medium duty fleets, like maybe, I don’t know, class four to six, something like that?

Billy Stolberg: Yes, yes. Like companies like UPS example, you know, the brown trucks were gas vehicles, but they had a fleet of diesel trucks too. And they’re getting away from the diesel engine and they’re going all gas. Your U Hauls, another one has gone away from the diesel. And you know, obviously the maintenance costs. On a diesel are a lot more also. So. So that’s one of the biggest trends I see in the industry is the. Trend away from diesel to gasoline in. Some of the major fleets.

Chandler Kohn: So, you know, the sustainability piece and the circular economy exists when it makes economical sense. So you see this in remanufactured consumer electronics like phones, computers. You actually see this in clothes, in apparel. You know, if we look at this from an ESG standpoint, we know that didn’t really fare too well. Did. Did the remand space within automotive ever surge from some of these ESG mandates or. Not really.

Billy Stolberg: No, not really at all.

Chandler Kohn: That makes sense. And then in terms of, you know, before we kind of jump into your company side of things and how you grow, grew and scaled it, you know, are there any vehicles that seem to not require as many reman products as some that do?

Billy Stolberg: Yeah, I mean, your everyday passenger car. Vehicles are not going to have the same demand that a SUV work truck type vehicle does. And that’s simply a function of wear and tear. If you’re using your vehicle to go to and from the grocery store, to and from the office, versus using your vehicle to tow your boat, to tow your race car, to plow a driveway. There’S obviously going to be a lot. More wear and tear on the drivetrain.

Chandler Kohn: And a lot of the remanufacturing happens in kind of the Rust Belt region where you are kind of at Chicago, along the Great Lakes region. You know, it’s not kind of ubiquitously spread across the country. Right. So tell, tell us a little bit about that kind of, you know, regions of the country where it’s, you know, heavy and not so heavy in terms of kind of remanufacturing and supply.

Billy Stolberg: I actually think that when you get into, you know, the urban areas, the remanufacturing isn’t going to be quite as prevalent because people just simply don’t drive the distances. And again, you know, remanufacturing for the most part is a function of wear and tear. Whereas when you get out into areas where it’s Spread out where the vehicles are having a lot more miles put on them. You will see a lot more activity on the Reman. And then when you get out into the rural areas, what I find is in the inner cities, you know, people, people switch their cars a little more often and again, they’re not putting the wear and tear where when you go out, if you go out in the farm country, you’ll see vehicles sitting at some of these farms, you know, that are 30, 40 years old and they’re just going to keep repowering them and reusing them.

Chandler Kohn: You mentioned that you’re seeing a shift away from diesel to gasoline, particularly in the medium fleets. Elon Musk mentioned the other day on the 8th that you know, Tesla mass production is going to start in 2026, the Semi. How is that going to impact kind of this whole industry, if you will?

Billy Stolberg: Well, I guess that remains to be seen. And you know, it really depends on whether he can mass produce a semi truck that has the kind of range and can charge, you know, in a reasonable amount of time. What I’ve also found with the electrical vehicles is they’re a lot heavier than a traditional gas or diesel powered vehicle. And again, when you’re trucking, you know, the payload is huge. So you know, if you’ve got a vehicle, you know, truck that, you know, a gas, a diesel powered semi, you know, weighs between 18 and 20,000 pounds and then all of a sudden you got this, this electric powered vehicle and it weighs 24,000 pounds. And then you, you factor in, you know, three, four, five loads, five, five turns a week. They’re going to lose a lot of payload and, and the various states are not going to change their on highway weight policies based on that.

Chandler Kohn: Makes sense. So let’s jump into your business, you know, your kind of business model, your operating model. You’ve been around since 1949. Your father started the company.

Billy Stolberg: I haven’t been here since 1949 with the company.

Chandler Kohn: Not that old. Not that old. So tell us about, you know, obviously the industry’s changed a bit and I think the industry within automotive started from all the vehicles coming back from, you know, World War II. A lot of those engines and parts were kind of getting remand and I believe that’s correct. But tell me how your business model, your operating model has changed throughout the years. So I don’t know, maybe from 1975 to, to now.

Billy Stolberg: So I started in the business in 1990 but from 1975 till right about 1990. Everything was still status quo. When I first started, you know, you. Had as an example, you know, the most manufactured engine in the world is a 350 Chevrolet. So when I first started back in 1990, you know, that was when General Motors made a 350 Chevy, a 350. Oldsmobile motor, a 350 Buick motor and a 350 Pontiac motor. Each individual car company had their own. Engine and they basically had. Say four different engines or maybe four to six. Different engines each car company and that covered them for every single vehicle. We did not have the amount of car companies in the US market back then, whereas now you’ve got, I couldn’t even put a number on how many different car companies sell cars in the US market. Maybe 20. Realistically. And that’s saying GM is one seller even though they still have several product lines. And then they, they change the, the parts, you know, they’re changing the engines every two to three years. Where in the early days you had a 350 Chevy that like as an example from 1969 all the way through 1985 never changed.

Chandler Kohn: Yeah. Wow. So now, you know, now if you get a three year run, three to four year run with something where it’s the same, that’s big business model wise.

Billy Stolberg: You know, for me when I came to work I understood right away that this was a commodities driven business. And we are not a function really of what we can sell because there’s always going to be certain parts in demand. So you become a function of what you can buy. And my philosophy always was to keep on buying. You just got to keep updating your needs, but you never ever, ever stop buying. In today’s world, you know, the space requirements to be in our business is, is large. You need a lot of space. A and A Midwest stocks actively stocks engines from the mid-1960s all the way to the present. And as they keep coming up with, with new part numbers, not only do we keep stocking all that early model. Stuff, we have to have room to. Stock the late model stuff. Business model wise, It’s a relatively simple business being a core supplier in that it’s just a true commodities business. So, so the basic business model really hasn’t changed, but the way of doing business and the cash and space requirements have really changed. Have you had to expand your supplier base with the automotive recyclers out there as basically the engine count or the engine sku count has expanded over time. So again, as we are a function of what you can buy, you’re always looking for new suppliers.

Chandler Kohn: Yeah. That makes sense.

Billy Stolberg: You know, recently I picked up a deal. A friend of mine, someone I had known for years, never bought anything from, took on a deal. The deal just started around, right around the first of the year or maybe maybe around December 1st is when the deal hit. And I’ve already purchased 16 trailer boats out of that deal.

Chandler Kohn: Oh, wow. So, yeah, everybody knows, you know, Jasper lkq, Best core. You know, those are the. You’re right. Those are the main kind of remanufacturers. But then there’s a bunch of smaller shops. I had H H truck parts on here. Mark Harris in Ohio earlier or later last year, he’s a remanufacturer. Tell me about your customer mix and kind of the, the demands between large versus smaller customers.

Billy Stolberg: So the large customers today, there’s only a handful, as you mentioned. There are several, not a lot, but there are several. And I kind of call them sleeper accounts where they’re smaller operations but still do a lot of business. It does take maybe three of those to equal one of the big guys. But I’ve got, I’ve got an account in the Michigan area. I’ve got another account in the Minnesota area. These are engines, engine guys and parts guys, crankshaft cylinder heads. And even though they’re a smaller shop and nobody’s really heard of them because they’re not marketing direct into the job shops, they’re supplying distributors and what have you, you know, you look up and they still can amount to a couple hundred thousand a year in business. You know, each individual account. And then on the export side, that’s really growing for us. But again, we’re a function of what we can buy. The export markets, primarily South America, Mexico, they’re after all the different clients are after mostly the same material. Where that’s not necessarily the case in the domestic market. The domestic market, you know, you’ve got an AER has certain OEM contracts. So they’re after that business and they control that OEM business for the entire country. So nobody else is going to be looking for, for those types of parts and the volumes there. Whereas on the export side, they all want the same material. And if there’s any part of my business that typifies were a function of what we can buy, it’s export right now with the climate that’s going on out there. Again though, with the cost of new cars and what have you, that doesn’t just apply to the usa, that is worldwide.

Chandler Kohn: Yeah.

Billy Stolberg: And the export markets, those countries have less money than the U.S. so. So there’s there’s a lot of, lot of opportunity there for growth.

Chandler Kohn: In terms of inventory management. You’re managing inventory across two locations in Chicago, each about 10 miles apart. You know, how do you, how do you balance, you know, obviously being well stocked against, you know, leaving some space open in case, right. You ever have a large opportunity to, to kind of stock, it could be anything. Like, how, how do you balance that? It’s like almost having cash on hand in an investment account to invest it in the market for when the opportunity’s right. How do you balance that?

Billy Stolberg: It is a tough balance. Even though, you know, we are an inventory based business, I do have to. Make that call sometimes to say, okay, even though I know that’s good merchandise, I simply don’t have the room to. Stock any more of a specific part number. And we do have to remove it. From our buy guide or lower the. Price down such to where they slow down coming in until you can sell the inventory down. On the flip side also is we will look at our inventory and at times, and probably one out of four times it comes back to get us. You know, we do have to go. Ahead and scrap stuff that we might deem obsolete. And every once in a while you do scrap something, all of a sudden, two years later, you wish you still had it. But you do have to make those.

Chandler Kohn: Hard decisions in the, in the part space. You know, there’s a lot of folks that have been in it forever. They’re kind of, you know, walking encyclopedias in terms of, you know, what, what parts needed, what’s the SKU number, what’s the price? What should the price be in this instance? You know, how did you formalize that across the business? Because obviously you can’t manage this many cores, right, or orders or whatever on a daily basis. So how did you formalize that across.

Billy Stolberg: The business as far as the buying and selling pricing?

Chandler Kohn: Yeah, yeah.

Billy Stolberg: So I mean, even though it’s a smaller market, there is established prices in the marketplace. There’s a core website, the urg, that publishes core buyers pricing with technology and Internet. Today, most of us, you know, do have our buy guides out on the Internet. But at the end of the day, you know, it’s still all driven by supply and demand. And there are times where myself, Ana, Midwest or possibly another company might have a much better market on a certain part and have a much higher price. On the flip side, when we’re selling, it’s 100% supply and demand. If it’s a part that everybody’s got, you Know, you gotta work on the minimum margin, otherwise somebody’s gonna undercut you and you’re not gonna get that business. On the part numbers that you can sell, everyone you get, you could dictate price above what the general market is selling the parts for. But you do, you know, we still have good customers that are loyal customers, and there is a walking balance of making sure that you don’t go out of your way to charge more on something and leave a bad taste in a customer’s mouth.

Chandler Kohn: Sure. You know, a lot of these engine cores and transmissions that come in, you.

Billy Stolberg: A lot of the vehicles have hit their max limit. They’re at end of life, they haven’t been wrecked. Right. And then there’s a lot of vehicles that, that I’m sure, you know, come in that are wrecked and then you pull out the parts. You know, the remanufacturers aren’t going to take apart this. Absolutely mangled.

Chandler Kohn: Yeah. How from, from a quality control standpoint, have you guys improved over the years the way you assess parts and determine whether to, to not push that to the remanufacturer, just kind of get rid of it. What is, what does that look like?

Billy Stolberg: So the basic assessment process hasn’t changed other than with the highly technical engines that we have today. It’s a much more involved process. You know, when you were checking in, you know, as an example when I started, you know, 50% of your purchases were 350 Chevrolet, you were just checking the same engine over and over again. Where now you’re checking in so many different part numbers. And each individual part number could have a different area on that block, on that head. That’s a critical area to check. You know, once we learn where the failure is on a specific part, we’re checking that part based on where that part typically fails. And if it’s an older part, you know, we’re definitely checking to make sure that they’re. There is still room on the tolerances. For them to be remanufactured again.

Chandler Kohn: And you have a couple guys doing this, right? Or is it just one? One or two folks or.

Billy Stolberg: Well, I have approximately 25 people working in the engine processing area. I have like six different stations. And each station has a team leader and then I have one person, one employee that actually writes up all the material. But when they go into each individual station and they start going over a load, the team leader and that lead person, you know, discuss the cores and document each individual corps one by one by one. And if there’s anything wrong with it. It’s documented.

Chandler Kohn: Yeah, makes sense. And then in terms of automation throughout the operation, you have an inventory management system, which is pretty much a must. Have you built anything else into the operating model or anything to kind of make the, the operation as efficient as possible?

Billy Stolberg: As far as, as efficiencies, we just continue to evolve with materials handling.

Chandler Kohn: Yeah.

Billy Stolberg: Because in, you know, in the business I’m in, the products are heavy. We go as far as even down to the area where we sort torque converters and you know, your average torque converter weighs anywhere from, say, 30 to 60 pounds. We actually just put in a whole new crane system. So the people that are sorting the torque converters aren’t even handling those by hand. So it’s A, for efficiency and then B, obviously for safety of the workers. You know, in order to minimize the. Possibility of having to work with comp claim. And you never want to see somebody get hurt.

Chandler Kohn: Yeah, I get it. You have two locations in Chicago, as mentioned. I think the White Sox stadium is called Greatfield. You’re right by it.

Billy Stolberg: I think it’s called Great Field now.

Chandler Kohn: So you’re, you’re right by that on that major highway. And then you were in a small town southwest of that called Blue Island. Yep. Two locations, not one bigger location. How did you land on both of those locations?

Billy Stolberg: Well, the Wentworth location, the family business has been on Wentworth Avenue my entire life, like 60 years. And we ended up, you know, it’s just, I think, you know, ultimately before my time. You know, it’s the way the chips fell. Where my father originally bought his piece. Of property, I mean, obviously when he was looking for property, you know, when you could be on the interstate like that, from a distribution standpoint, you can’t beat it. Blue island was chosen for two reasons. A Blue island is a very business friendly suburb. They really work with you, they really want you there. You know, even though we run a clean operation, we have all our waste handled appropriately, you know, permits, etc. It’s still a dirty business. So, you know, we definitely, when we. When we purchased the property in Blue island, that was a big factor because. We knew we would be able to. Operate there and that the city would be friendly and happy to have us.

Chandler Kohn: What would trigger a go or no go decision or maybe what would trigger a go decision in expanding, you know, to a, to a third location that’s, you know, got more inventory space and where kind of would you put it? How would you think about that as it relates to your industry? That you’re in.

Billy Stolberg: So we are definitely in a position where we need more space. I kicked as far as the Wentworth location because of the fact that we are right on the I94, five miles south of downtown. I don’t know that I could save enough money operationally to make up for the potential of lost business just because of the location. We buy a lot of parts at the front door and you know, when someone’s going to sell parts, if one location is hard to get to and the other one’s easy to get to and the difference on the load, you know, is a couple hundred bucks, they’re going to go to the location that’s easier to get to. As far as opening a third. I am looking around for some property and it really depends on what I find. I would be amicable to having three facilities if that was the type of property I found to where it wouldn’t be large enough to consolidate the Blue island into it. But in a perfect world, as friendly as Blue island is, I would like to ultimately consolidate the Blue Opera Blue island operation into a much bigger footprint. Footprint. And then at that point I would look at probably moving the transmission division out of the Wentworth property and using the Wentworth property for the engine business and as the main buying hub and then do all the export and transmissions out of another location.

Chandler Kohn: From a, from a lease or purchase standpoint, how would you think through that?

Billy Stolberg: So I’m not one to lease, so I am looking around to buy a piece of property and the kind of footprint that I’m talking would be, you know, a minimum of like 100,000 square foot building on a minimum of 5 acres to move the Blue island facility to. Currently, Blue island is a 40,000 square foot building on 80 on only two acres where the Wentworth facility is an 85,000 square foot building. But that’s on four acres and we have a lot of space. We have 125,000 square feet of building on about six acres of space. We do, we do quite a bit of work outside, storage and sorting and what have you. But. And that would be the bare minimum would be 100,000 square foot building. I would like to see something more. In the 150, 175,000 square feet because. I know when we, when we have. Done it, when we did additions here. On Wentworth, which we did do two. Additions over the course of the 10 years since I’ve been here, one of Our additions was a 50,000 square foot addition and within two years we filled it up.

Chandler Kohn: Well, is there any space, you know, within a 15 mile radius of downtown Chicago that’s affordable at that square footage?

Billy Stolberg: So there is space out there. It really depends on the age of the building.

Chandler Kohn: Yeah.

Billy Stolberg: If I’m gonna make a move like that, one thing that, that is an absolute must is it has to be a fairly tax friend, tax friendly area. Because Cook County, Illinois, where my two locations are now is not a tax friendly area. There are. So it probably in reality, 15 miles probably is not going to happen. It’s probably going to be, you know, 30 to 50 miles.

Chandler Kohn: I think you mentioned before this call, you do have to con contest the taxes every year, right? On your.

Billy Stolberg: Every year.

Chandler Kohn: Man, what a pain.

Billy Stolberg: Every year it’s really bad. Our tax, our taxes jumped by from our 24 taxes to 25 taxes here on Wentworth. Our taxes jumped by 30% in one year after the initial contestants.

Chandler Kohn: Geez, what was the reason?

Billy Stolberg: Now we go through the second phase of contestants and four year, three, four. Years from now I’ll get a check. Back, you know, and they’ll lower them again. But it’s, it’s, it’s a real battle. And the taxes have gotten very, very expensive.

Chandler Kohn: That’s brutal. Talking about spacing and optimization, I mean it’s, you know, it does come down to kind of racking, right. And how high the racks go and how close they are and, and all that stuff. I’m sure there’s some safety implications built into it, but space is everything for you. How is that optimized? Have you had to make any changes at the facilities?

Billy Stolberg: We just have to continue to get creative to try and find more and more storage space. We do work on all of our floor space too. Most of our aisles, there’s a process being worked on them, whether they’re sorting parts, packing orders or what have you. We work in most of our aisles as well. When we do, and I’m not saying if we do, when we do find another piece of property, I would highly consider a narrow rack system because that basically doubles your storage space. So what I put in a 50,000 foot building. If I get a high ceiling 25,000 foot building and go with one of the narrow rack storage systems, I can actually put the same amount of product into 25,000ft that I’m putting in the 50. And in today’s world, with as expensive as real estate and taxes have become, you know, the cost of the, the racking, narrow aisle, racking system and the narrow aisle forklift will pay for itself within a couple of years.

Chandler Kohn: How does that work? How does that system work?

Billy Stolberg: So in a narrow rack aisle system, I’m not exactly sure of how wide the aisles are, but my aisles now have to be a minimum of 12ft for a traditional fork truck to be able to maneuver in and out of the racking system. Where those aisles are like six or eight feet.

Chandler Kohn: Really?

Billy Stolberg: Yes. And it’s a machine that sits on a track and goes straight up and down the aisle and, and never really turns. It’s like the. I’d have to really study it. But in the track system where the forklift goes up and down the aisle and in those types of systems, you can. Those, those machines go a lot higher than a traditional forklift also, and they do it safely.

Chandler Kohn: Interesting.

Billy Stolberg: You know, right now we’re storing up to top shelf at 19ft where I’ve seen those narrow rack systems up, you know, 35ft. Obviously, you know, with our product being as heavy as it is, you’ve got to weigh the cost of the heavy duty racking system versus. Versus that.

Chandler Kohn: Yeah, Barry, I’m gonna look at that after this. That’s quite interesting.

Billy Stolberg: Yeah, LKQ has, has it in their warehouse and I’ve seen it a few other places. But you, you literally double your storage. Space with these neurorac systems. Interesting.

Chandler Kohn: You know, big picture, stepping back, how have you scaled the revenue and headcount talent over the years from, from when you started in the 90s to, to now?

Billy Stolberg: So we’ve most, most of our talent here is homegrown. You know, even to this day, we’re constantly looking at the new hires coming in and looking for somebody that stands out. The second you, you know, typically when we hire a new hire here, everybody starts in the engine stripping area. And once we find somebody that appears to have some talent, we immediately move them out into the warehouse so they can start learning the parts and be more than just a back and become somebody that we can rely on that has knowledge.

Chandler Kohn: And then in terms of your customer count and essentially growing your, your order count with these customers, have you had to do anything special over the years to essentially grow the revenue from that angle?

Billy Stolberg: So I, I don’t, I haven’t changed anything. But I would say that we are, you know, the top one or two supplier at every single remanufacturer in the country. You know, business is very simple. You know, you need to honor your promise, you need to return a phone call, return an email, and then you have to know your product. One area that we shine as a company is our customers and the people that sell us parts, they rely on us for the knowledge. We get a lot of inquiries where people are calling just to pick our brain to find out if we’ve seen this or will this work for that or how do you tell the difference on that. And having that knowledge in house gives us a large competitive edge over our competitors. As you know, in this world today with technology, the younger generation, they want to do everything for a computer. But this is still a hands on. Business and if you’re just talking part. Numbers, you know, you’re not going to know how to tell the difference and be able to explain something.

Chandler Kohn: Makes sense. Before we hopped on this podcast, we were talking about how you’re flying out to Utah to catch a little snow on the mountains. You spent a lot of your time, you know, traveling in Utah. How you seem to balance that out while running the business at the same time?

Billy Stolberg: Well, it all goes back to having really good people and I have a really good team here with a lot of knowledge and people I trust. I’ve got a very, very tenured crew. So from that standpoint, operationally I don’t have to micromanage it. I do go and come. I travel a lot, but I do like to go and come because I still will walk the warehouse and see things and call the lead, lead people over and have things changed, have things cleaned up, have things fixed. So you can’t totally do absentee ownership from that standpoint. But on the day to day work that I do, which is sourcing the product and then handling some of the sales, you know, with technology today, give me a telephone and a computer and, and I can do most of what I do, 80% of my job from anywhere.

Chandler Kohn: In terms of accelerating growth, there are some things that can, can kind of hinder this one is obviously capital. Two is labor talent shortage, supply constraints, market limitations, that type of thing, or is there anything from, you know, like what are the top two things that you could think of that you would have to address before kind of approaching forward growth?

Billy Stolberg: So for me, the number one factor is space.

Chandler Kohn: Yep.

Billy Stolberg: We like, like we’ve talked about, we’ve been in business forever. So I, I have a, a network of suppliers that like doing business here that sell me all their parts. We have a very good name in the industry, so people do find us all the time. People are like, hey, call this guy. But I can tell you that I don’t go out of my way looking for suppliers either. And there’s all kinds of publications. There’s salvage yards throughout the United States that you could get on a plane and go to an area and go visit. There’s like I talked about the URG program that, you know, helps the salvage yards see what each individual core buyer is paying. I’m not overly aggressive on that because we are already handling space wise about max volume. We’ve been able to continue to squeeze out some smaller growth, but we are at that point now where, where I am actively looking for more space.

Chandler Kohn: And how would you think about this kind of organic growth approach versus potentially growing through acquisition? I’m sure it’s crossed your mind once or twice over the years.

Billy Stolberg: I would say that there’s some businesses I’m interested in that in order to break in, I think it would require either a strategic partnership with somebody or an acquisition. And I really don’t want to get into specifics of which types of businesses those are versus other areas of what we’re already doing. That would be very easy to do, a lot more.

Chandler Kohn: Helpful. And let’s, let’s cap it off with a key takeaway for our guest. You know, I think this is a question that, that may be interesting for them. You know, if you have a business owner that’s, you know, their business is kind of stagnant, maybe it’s 12 to 15 million dollars, really are having trouble kind of punching through to that next level. You know, what is something that, that you, you know, maybe two key pieces of advice that you would share with them to get to that next level.

Billy Stolberg: Well, the first piece of advice, because I’ve learned that the hard way over the years, is you really have to identify an opportunity and make sure it’s. An opportunity that you have the expertise to tackle and that won’t leverage you. I could tell you that, you know. You have to have, you have to have people. You know, as you mentioned, labor is a big factor in holding people back. So, you know, if you, if you. Get the, the buggy before the horse and you go out and you try and grow and then you don’t have the expertise and the people to handle what you’re doing, you can just permanently injure it right out of the box and never have a chance to come back from something like that. You have to grow strategically and you have, and you have to stick to what you know.

Chandler Kohn: Well said, my friend Billy, a, a Midwest. Thank you so much for coming on today. Real pleasure having you on and look forward to tracking the progress as we go forward in 2026. I appreciate it.