Radiator conglomerate sees business heat up
By David Morrill/Contra Costa Times
Article Launched: 06/29/2008
Much of 1-800-Radiator's sales are made by phone from the company's main office in Benicia, according to CEO Mike Rippey . (Contra Costa Times photos/Susan Tripp Pollard)
The company gets 30,000 calls a day, has every type of radiator and locations across the country. But that's where assumptions of 1-800-Radiator might end.
High-pitched machinery sounds, oil stench and filthy rags are all absent from the 235 franchise location. And the owner of the Benicia-headquartered company is anything but a car guru.
"When I bought the company about 15 years ago, I barely knew how to change a tire," said Mike Rippey, president and chief executive of 1-800-Radiator. "You will find no grease under the nails of our employees."
And that's how Rippey wants it.
His company, which he runs with his two sons, provides radiators to anyone who needs one. In most cases it's to an auto shop, but it could be individuals who can install it themselves. Along the I-680 corridor, there's 1,200 dealerships that could use radiators, Rippey said.
The franchises are usually just offices with a few employees and shelves filled with radiators.
His No. 1 advice for anyone getting a radiator is to not pay too much. With the cost of labor, it should not cost any more than $300.
The strength of the company is its complex data center at its headquarters. With it, franchise owners not only can determine where to find specific radiator types, but also the best way to stock their shelves. For example, it can compile data from orders and determine that Ford's models may be prevalent in one area, and Honda's in another.
"Without the computer system, we wouldn't be in business," Rippey said.
And being able to deliver the products allows for the franchise owners to build a better connection with the community.
Customer service is a big reason Rippey believes his company has been successful.
For instance, if someone has their radiator installed by his company, and it breaks down, not only will his company pay for a new one, but also the cost of the labor to have it installed.
And occasionally, someone will say they have a radiator that needs to be replaced and they're not entirely sure it came from 1-800-Radiator. He'll give it to them anyway.
"If you do the right thing, you could have a new customer for life," he said.
Even though Rippey has never put a screwdriver to a radiator, he does like to try and spot good opportunities.
About 15 years ago, he spotted two trends that he thought could be a hit. Radiators and coffee.
He decided to buy 1-800-Radiator because he saw a business trend in the upswing. Cars that previously had its radiators made out of copper and brass were now made out of plastic and aluminum. So where in the past, old radiators could be fixed, today the trend is for them to be replaced all together.
At the same time, his friend approached him about the idea of starting a drive-up coffee shop which turned into the company Caffino and the first location in Napa. It later grew to more than 25 locations. Reality for Rippey set in when one of the Caffino locations in Chicago that made $500 a day was sold to Starbucks.
"We sold the exact same stuff just as fast in the same location, and the Starbucks made twice as much as we did the very first day," he said. "It made me realize how difficult it would be to compete with a brand like that."
Although he admits that the new owners are coming up with great ideas, but for whatever reason he "could never figure out how to make money on the coffee."
His best year with Caffino might have brought in $1 million in revenues. It wasn't enough, so he sold it several years ago. With 1-800-Radiator, the company has brought in $173 million in sales, and he projects the numbers to reach $500 million by 2012, he said.
One of the company's primary strategies to try and grow is by buying other car-part companies at a rate of about 10 acquisitions a year. Instead of using them for the brick and mortars, the phone banks of the acquired company are routed to 1-800-Radiator and its franchises so he builds a customer base.
In coming years, Rippey believes going public could be a distinct possibility, as well as expand its focus on other car parts such as the grill and headlights of a car. Where most auto parts stores specialize in the small stuff like spark plugs, their niche is "the big stuff that has to be delivered."
Rippey also benefited from being around during the infancy of the Internet age by snapping up about 400 Web site addresses such as radiator.com and radiators.com.
"It's not much fun competing against Starbucks," he said. "It's much more fun being the Starbucks of radiators."
Teddy Rippey holds a radiator from a Chevy pickup truck in the warehouse with his father Mike Rippey, CEO of 1-800-Radiator in Benicia. (Susan Tripp Pollard/Contra Costa Times)
1-800-Radiator
CEO: Mike Rippey
4401Park Road, Benicia
1-800-723-4286
Provides radiators to both auto shops and individuals via 235 franchise locations nationwide.
