Recycler to Watch: Learning from Others

Mar 1, 2024 | Interview

Participation in industry events and learning from peers are the keys to success for auto recycler Julio Arreola, AR1 Auto Parts, who is one to watch.

By Caryn Smith

“I had the privilege to meet a lot of people that are willing to share their knowledge,” says Julio Arreola, owner of AR1 Auto Parts, on his attendance at the recent Rocky Mountain Summit & Expo 2024, in Englewood, Colorado, held by the Colorado Automotive Recyclers Association. “I mean, it’s something you don’t see in any other industry. You get the same treatment from a person that owns a huge facility, just the same as a smaller one. They take the time to show you around their yard, even show their numbers,” which Arreola finds as a real benefit to attending industry shows.

AR1 Auto Parts is in Yakima, Washington, and sits on 10 acres, with two facility buildings, with 16 employees processing 450 cars a year. The operation is a full-service facility, although they often get a number of walk-in retail customers, too.

We caught up with Julio Arreola on his business growth and what he considers the keys to success. As an active member of the Automotive Recyclers Association (ARA), he has taken advantage of the ARA Mentoring Program, as well as ARA CAR Certification. He attributes his growth to the education he receives in networking with industry peers.

Automotive Recycling: How did you start your business?

Julio Arreola: AR1 Auto Parts opened in March of 2004 when I bought an existing yard in Yakima, Washington, and we have one full-service facility. We bought another one, like, 10 years ago in another city close to us. But I decided to lease that location out until we fully put our systems in place here, and have it running well. That way, we can duplicate that system, but I don’t think we’re ready yet.

AR: What industry were you in before you bought into the recycling?

Arreola: We had used auto dealerships. We still have one dealership. While operating them, I noticed that there was a big need for used parts. And then I noticed how much money a salvage yard paid for vehicles and the value of their parts, and I realized the potential of the business.

AR: Are you the sole owner or do have partners?

Arreola: I have two employees, Misael Martinez and Edy Aguilar, who have worked for me, probably, since I opened. Now that I’m 52 years old, I don’t see myself in the business for more than 15 years. So, I am preparing to have them eventually take over. Each of them owns 15% of the business, and I own 70%. They run the daily business as owners/operators, and I focus on business growth.

AR: How long have you been a member of the ARA?

Arreola: I first heard about ARA through Car-Part.com. They shared that there was going to be a convention. We decided to give it a try, and we were impressed. It was the first time we had the privilege to meet a lot of people and the ARA staff. They were all good people that were willing to share information and knowledge that is very useful for us. So, we’ve been going to the ARA Convention ever since; I think this year in Reno, Nevada will be the ninth one that I will attend.

It’s always better to learn from the best, right? They’ve been through experiences and had successes they share about, and they also have had failures.

AR: Why is ARA membership and show attendance important to you?

Arreola: I don’t see any other ways to network with key people in the industry. You are exposed to the main players. It’s always better to learn from the best, right? They’ve been through experiences and had successes they share about, and they also have had failures. I mean, the main purpose is to learn from the people that are way ahead of you.

There’s another important aspect, and that is to comply with all the regulations, to put in practice social ethics. To do that, you must learn what are the rules, and exactly what you need to do to follow those rules to be complying at the federal, state, and community level. You also need to practice social ethics with your employees, with your partners, with everyone.

AR: You are ARA CAR Certified? Tell us about your involvement.

Arreola: When you go to the ARA Convention, you know, you learn about the ARA CAR program. It is basically the roadmap to comply in order to do business the right way. ARA has created a very, very useful program that is step-by-step. If you are willing to do it and follow all the steps, you’re going to end up improving a lot of how you do business.

Currently, we have the CAR Certification; we’re not yet ready for the Gold Seal Certification. We would like to, though, and are working towards the next step.

AR: Tell us about your ARA Mentoring Program experience.

Arreola: In the beginning, when we started with the ARA Mentoring Program, we were working with RD Hopper, and also Marty Hollingshead. I remember RD paid his travel expenses out of his own pocket to come visit our facility, which for us was very remarkable. He helped us a lot, and then we went to his facility to see exactly how he was doing his processes. It is very, very valuable to hang out with these advanced industry people. I think there’s always room for improvement, right?

Traveling to the Rocky Mountain Summit, we had the opportunity to tour Daurio Auto Truck; really nice people, and very sharp people, but also very humble people.

Then we went to Stadium Auto Parts. We learned a lot from Norman, too. We are always trying to get help, visit different yards, and learn from them.

AR: Why do you think more are not involved in industry networking?

Arreola: There’s not a lot of collaboration in my state. It seems like many are ‘old school’ operations. They don’t see the value. The business has changed a lot. And I mean, obviously, there are a few big industry active yards here in Washington State, like Spalding, B&R, and others. But that is why we see value in traveling to other state’s shows to see what they’re doing.

AR: What is the biggest change to your business that you learned through networking?

Arreola: I think it would be two aspects: The first one would be the numbers. I’m not a very analytical person, and not very good with numbers. That is something that I struggle with. I want to buy and to sell, I’m good at that. The aspect behind the numbers is one thing that I have been learning to understand. Such as knowing my overhead, how many cars we process, and how much money we are spending to open our doors every day in order to improve our profit level. So, that’s the most important aspect – being able to understand the numbers on exactly what we’re doing and how we can improve operations.

Also, secondly, I think we are more responsible about our operation, environmentally wise. The ARA CAR Program explains how we need to do business in a way that minimizes the impact that we might have on the environment.

AR: Do you have anything else to add?

Arreola: We process 450 cars a year right now, and it’s a healthy number. We mostly sell our used auto parts to mechanic shops and body shops, as well as walk-in customers in retail. We sell through eBay, as well, and have a team of three people dedicated to eBay sales.

At the Rocky Mountain Summit, we were talking to people when we realized that the way that we’re processing our vehicles is not the right way. So now, our plan for this year is to double that. Our goal is to process 900 cars, and we already figured out a way to do it. These findings wouldn’t have been possible without going into that kind of convention or without being part of ARA.

I hope this information and its value can reach other salvage yards that are not part of the ARA. If they are not, they are missing the boat. There’s definitely a different way to do business. And the only way to get that information and the only way to learn is to be a part of ARA, to network with the people that are doing it successfully.

The information coming from ARA is useful, like interesting articles in magazines, emails about news, learning about vendors and how the industry changing. Every day, something comes up that we need to know about. 

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