Marine electronics wholesaler SeaWide Distribution and NTP-STAG, a division of Keystone Automotive Operations in the RV segment, merged last October. The transaction gave SeaWide access to Keystone’s national distribution network, which today comprises eight warehouses with more than 2.5 million square feet of space for next-day service.
Almost five months after the acquisition, Soundings Trade Only sat down with SeaWide Distribution president Mike Yarbro and NTP-STAG president Bill Rogers to discuss the business integration and learn their visions for the future.
What are your backgrounds?
Yarbro: I started in this business with my parents. My dad’s the founder of SeaWide. I started in the mid-’80s sweeping floors and went full time when I was 22. I’ve only ever worked at this company. I took over the business in 2001 when my dad retired. We grew the company from a little regional distributor with five people to a national distributor with more than 75 employees at its peak. We only carried 11 or 12 lines when I started, and finished at around 150.
Rogers: I’ve been working with Keystone Automotive Operations for almost 12 years. I’ve been in my current role for about six. Before that, I spent some time with some larger, multi-industry companies, like General Electric and Textron. I’m also on the board of directors for the RV Industry Association. My experience in the marine industry is somewhat limited, but I do own a Sportsman 242 that I really enjoy.
How has the integration of SeaWide and NTP-STAG been going?
Rogers: The plan was to merge the companies together and really take advantage of our distribution network process. We really felt like there was a heck of an opportunity for SeaWide to jump into our distribution network and provide their customers with much better service. Now, SeaWide was going through a scheduled [enterprise resource planning] software switchover, but after we started talking, we decided that instead of going with a new system, we would use our existing system. That system reliably manages our distribution network, and it serves our RV and automotive customers very well.
We ended up doing the physical integration a little earlier than planned, due to seasonality — it kind of made sense to do it in the December timeframe rather than wait for the summer season, when things get very busy. With that kind of changeover, it’s a matter of getting the products set up in the system, the customers set up in the system, and the suppliers set up in the system. And, you know, there are a lot of nuances when you go through that process that require a lot of work to sort out.
We had ideas of where to put inventory that was in Mike’s warehouses, and how to distribute them into our seven distribution centers, but at the end of the day there were a lot of adjustments that had to be made. Plus, supply-chain issues were kind of overlaying the whole thing, which was challenging.
Where do things stand now?
Yarbro: Everything’s been switched over at this point. It took us 10 weeks to get everyone on and trained on the NTP-STAG system, from purchasing to sales and our customers. We also had to get a new website up, add 300 new lines to our inventory card; I’d say that’s a pretty big accomplishment.
We also had to maintain the customer service side, helping the customer base work with the new website. It was a big integration. And it was a quick integration. Like Bill said, the plan was to try to get this done before the season hit. And I would say the seasonality of the marine business has been off the last couple years because everything’s been so crazy. I still think we picked the best time, especially when you consider what Bill and his team had going on with RV and auto shows.
The RV industry shipped about 600,000 units last year. How are you keeping up with demand?
Rogers: We’re obviously much more established on the RV side. The RV industry has been strong — maybe booming would be another word for it — since June 2020. It’s been a challenge to stay ahead on certain categories because the OEs [original equipment parts] have been growing at the same time. I would say we’re at a point where it’s more product-specific, though we’ve got a new crisis out there that will affect things. Every time you turn around, it’s a new challenge, but I would say we’re in good shape on the RV side.
How was the NTP-STAG Expo in January?
Rogers: The RV side of things is very bullish. In 2021, we had our show in Orlando, Fla., and purposely kept it small and safe. This year, we had it in Las Vegas, and that event obviously had a lot more people than we had in 2021 but not really back to the level that we were used to seeing. That’s because the Canadian customer base was basically nonexistent in January with all the flare-ups of Omicron going on. So it was limited, but in terms of overall sales, we beat our expectations. That was positive, even though the head count was down.
Let’s talk supply chain. What items are still difficult to keep in stock?
Yarbro: The past two years has been tough, and we had to decide whether to lay it out there and just continue to order, and order big. And we did that. I think the biggest help for us on a couple of levels here is working with our manufacturers and understanding what they’re going to see. I mean, if they’re looking at six months out, we’re ordering based upon that. Plus, we’re adding our additional timeframe that we feel we need, and ordering larger amounts.
A huge advantage for us now is going from three warehouses of stocking product to seven, and soon to be eight. I feel that is going to be a big advantage going forward, but it’s been a challenge. We’ve been working very, very closely with all of our manufacturers, even some of the smaller ones, and we’re staying in close communication and trying to figure out where they’re going to fall short so we can plan accordingly.
Have you needed to limit supply to some customers?
Yarbro: For us, it’s first come, first served. We bring product in, we have customers that will try to take advantage of it, and we’re trying to take advantage of it with the manufacturers. We’re ordering an excess of what we think we’re going to sell through.
How about inflation, fuel and oil prices, and interest rate hikes? Are they cooling things down?
Yarbro: I’m not seeing any slowdown from our customer base, and I actually get out [to see] different customers in the marine industry, and they’re all telling me right now that everybody’s backlogged, and it’s getting worse. So no, things are busier than ever.
On consolidation in the RV industry, does NTP-STAG have a strategy for acquisitions this year?
Rogers: Our mergers and acquisitions strategy has been to look at what we call adjacent spaces. These are areas where we think we can find independent businesses that can use the distribution support and services that we provide. I think within the marine industry, we’re good in terms of Mike and SeaWide having the expertise and important customer relationships. We are still in the process of bringing on additional lines that are focused toward SeaWide so that business is more broad-based. That’s our intention going forward.
What do the logistics of your operation look like?
Rogers: We have our own fleet of around 650 trucks. We take orders typically up to 5 o’clock at night. Then the tractor-trailers go out from the distribution centers every night with product. So even with late cutoff times, we do all the picking in the distribution centers, load up the trucks, send them out to the cross docks and then unload the tractor-trailers onto cube vans, which go out and hit all the customer locations, usually by the morning. Once the independent dealer gets a sense of that, it’s very welcoming for them, and they tend to like it. It allows them to have a consumer come in, and then actually get the part next day and put it on whatever needs fixing or upgrading.
What are you looking forward to?
Yarbro: Having the capabilities and logistics to deliver product the next day to pretty much anywhere in the United States, and even up into Canada, is huge. That’s an amazing level of service we like to deliver. Also, the additional warehouse facilities allow us to have a level of stock, to sell from, that is just great.
Overall, the integration between the two companies is already done. Now we’re working on making it better. You know, how do we make the customer service experience great? We consider ourselves a technical distributor and a very customer-service-oriented organization. And that’s just going to get better and better. That’s what we’re looking forward to, as well as growth and the expansion of 300 additional lines — you know, more to sell from.
Rogers: I think I’m just excited about marine. First of all, I have a passion for it. There’s so much a demand out there for products. You know, once you’ve got a lot of vessels out there, [the owners] demand service, accessories and all the awesome products we can provide. I think we have a pretty good system and process in terms of getting products to customers the next day. The marine industry is exciting because we’ll learn new things and expand our abilities.
That’s going to be applied to the industry, and I think the industry will welcome it. In fact, our experience is that [the marine industry] has been very welcoming, which is great. I do think we have a pretty good mousetrap in a lot of ways. Being able to really get in there and help with the industry-leading experience we have in RVs will work well in marine.
We have what we call an OE warranty program where we’ve worked with major builders on the RV side to provide warranty parts to the broader market. They look at something called RECT, or repair event cycle time. When an RV is brought into a service or a dealer and then dropped off, it’s the time between when they drop it off and the time they pick it up.
That time is pretty long in both industries. So the dealers really wanted some solutions on how to address and reduce the cycle time. We get orders from those builders and the OE, and they drop the order to us the next day, and then it’s at the dealer. One study I read revealed some dealers had about 16 or 17 days of the cycle time, so just to have that kind of next-day service — if you’re a consumer waiting — is huge. So that is very exciting, and I hope we can bring some of that service to marine.
This article was originally published in the April 2022 issue.