We caught up with the brilliant and insightful Carlos Barboza a few weeks ago and have shared our conversation below.

Carlos, thanks for joining us, excited to have you contributing your stories and insights. Let’s start with a story that highlights an important way in which your brand diverges from the industry standard.

Every year, more than 18 million tons of steel from automobiles are recycled by the steel industry. Roughly 12 million cars are recycled each year in the United States, making cars the most recycled consumer product. In fact, 75% of a car could be recycled. 42% of all steel in the United States comes from recycled metal. According to various automobile recycling facts and statistics, the number of vehicles recycled each year provides enough steel to manufacture 13 million new cars.

My business, ECO Green Auto Parts, is a small Salvage Yard; and I said small because in order to run a normal Salvage Yard, the industry standard states that you need 8 acres and up to run your business smoothly. My yard is only 2.5 acres (so wasted space is a luxury I cannot afford), and we do have same or better average sales than an 8 acres yard. What’s the secret? A good team and high inventory rotation. This will lead for each employee understands what’s the nature of each position and understand each endeavor, thus creating a stakeholder employee, which means that each one really cares about the strategy, tactics, and operations the organization carries out. I only have 10 employees under my command, and if I missed one of them the normal operation can get struggle, so what I do is split between two employees the job duties for that employee who missed that day.

Regarding to high inventory rotation, the automotive recycling standard inventory rotation is about 6 months, since ECO Green Auto Parts doesn’t have the luxury of keeping a car in the yard just like the way other salvage yards do, I designed EGAP’s operations to be efficient and smart. Therefore, cars are stripped down and sold off in parts more quickly, with a standard turnaround time of 45 days, to make room for newly purchased vehicles and new parts inventory. We focus on European, Luxury, Hybrid and Electric cars. Using your space with good and rare inventory will optimize your business and increase your income, too. From our statistical analysis of sales history, I detected that of all parts we’ve sold in the last 8 years, 15% of them make 80% of the income (Pareto Rule). The big Auto Salvage Yards, generally take out 45 pieces from each car, we take out the ones that matter the most, no more than 20. This method reduces the storage volume, increases the speed of processing the cars and simplifies the work for inventory department. The rest of the parts are included in the inventory, and remain in the vehicle. It’s not properly to save so many parts in your warehouse, and I’m not saying don’t fall in love with your old inventory, sometimes there are parts that just don’t sell.

Finally, recycling a car is not an easy task, if you don’t do it right, it could pose numerous risks to the environment as well as the community they are in. EGAP cares about the planet and feels strongly about the environmental legacy it will leave for future generations. For example, EGAP follows environmental best practices to ensure that it does no harm to the planet, such as removing and collecting all fluids, refrigerants, oil filters, and airbag cartridges from vehicles.

Carlos, before we move on to more of these sorts of questions, can you take some time to bring our readers up to speed on you and what you do?

At an early age, I had envisioned myself doing something that would make a positive impact in my influence zone, so I decided to be an entrepreneur.

Before being an entrepreneur, between 2005 and 2010 I finalized my Law School, Master in International Law, Advanced Executive Program of Business Administration, and others Master’s degree.

I discovered my passion for business, due to the success I had in my native country Venezuela, I decided to take a leap of faith and open my first business in the United States looking for the “American Dream”.

In 2012, I realized I could combine my passion for business and vision to make an impact in my influence zone, so I made to myself two questions: 1) What can I sell that everyone needs? and 2) If I need to toss that product, how can I still get some money from it? That’s what came into my mind that the best decision is to purchase a Salvage Yard. That is what I did, the business name is ECO Green Auto Parts located in Orlando, Florida.

Maybe you are wondering: why a Salvage Yard? The definition of a Salvage Yard is when you invest in vehicles that no longer run or are irreparable, then sell each wrecked automobile part by part. Once there is nothing else to sell of this vehicle, the car remains will be crushed and sold to recycling centers. A Salvage Yard is also eco-friendly because we recycle used oil, gas, antifreeze, batteries, steel, copper, platinum, rhodium, aluminum, and many others.

ECO Green Auto Parts was focusing on what a regular salvage yard must do: inventory, dismantle, and sell auto parts in good condition every single day. However, on September 3th, 2015 everything changed, a huge fire destroyed 90% of the buildings and 75% of the entire inventory. Everything that I had done in three years was gone in three hours. Essentially, from the cradle to the grave in a bad way.

Although the fire devastated the buildings and inventory, I had to keep up the ECO Green Auto Parts name. The best solution was to reengineer all my processes of how should I operate the yard, that would allow me to start up from scratch to achieve a drastic change in the organization’s performance.

Luckily, before running a Yard I got a very good business management education. Therefore, I started to apply a modern management method that are useful for improving or transforming a business. The biggest contribution to reengineer from the beginning was the Business Model CANVAS. It is a simple and organized scheme to create or improve the mechanisms of a business, integrating them and make them competitive. This model is easy to understand and participatory, as it requires the intervention of key company personnel, like me or you as an owner.

The Pareto Chart, or what is called “80% – 20% rule”, is a simple statistical and amazing tool, which we use for analysis of sales and revenue history. For the monitoring of results and corrective actions of objectives and strategies, we use Strategic Planning, as a management tool.
Results? Our current sales are three times higher than pre-fire sales. We have new buildings, equipment, specialized staffs, committed and oriented to customer service, defined business processes, an environmentally clean business with sustained and profitable growth

What’s been the most effective strategy for growing your clientele?

One of key drivers in your company’s strategy is the value of your customers. Analyzing customer profitability and maximizing a customer’s lifetime value are highly important and essential to any business.

To increase your customer base, it is necessary to stay in constant contact with potential and existing customers and the more value your business can offer, the more likely they will remain loyal. There are a couple suggestions:

– Define your customer, and your policy to attract and retain them. We build databases of our frequent customers, volumes and frequencies of purchases, follow up calls, quick delivery of the product, personalized attention between client and seller, and know their satisfaction expectation.

– Specify your value proposal to your customers: quality parts, right inventory, low prices, fast delivery and follow up calls.

– The more you describe your inventory, the less curb return you’ll have. Adding a part in your inventory is not enough, take your time for photos, price, condition, talk to the customer before sending the part. The average percentage of returns in our industry is around 20%, ours is 8%.

– Image sells. We look into appearance and quality of each part. The way you clean, package and deliver your part means a lot to your customers.

– Communicate with your customer. We make sure that the customer is buying the correct part and do not overpromise a delivery part if you can’t make it. For those customers who have a regular return habit, we talk to them to find out to improve our performance.

– Online platforms and information systems are your friends. Digital platforms and social medial are fundamental tools of the company. Use them.

Any advice for managing a team?

Your staff morale is the backbone of your business. As an organization’s leader, you can’t afford to not take it seriously: not only do numerous studies show that positive work cultures breed productivity (but more on that later), but it pays to keep your employees happy. After all, the happier they are, the harder they work, right? There are some tips:

– Effective communication: Improving staff communication can pay off big time. Start by setting clear and realistic goals for each employee. Schedule one-on-one meetings to track progress and to clear up any confusion. Be sure to communicate at every opportunity! Share positive company announcements, like a new product in development or a glowing customer review.

– Incentive your staff by production. Commissions by production and sales goals increases the efficiency of the company, the sense of belonging and motivation of each employee. Remember each employee is a clientele too.

– Share Success: send updates on business milestones like bringing new customers, a new location, smashing the goal or KPI set, etc. Also celebrate success stories from customers with letters, pictures, videos, a story and more.

– Be flexible and promote work-life balance: Treat your employees like human beings whose personal lives are important. Flexible hours, paid time off, conversations about self-care, and work-from-home policies will help workers address those real-life needs at home. This frees them up to bring their best energy to work — and morale will soar.

– Be grateful: Expressing gratitude is a proven antidote to aggression. It also boosts productivity and decreases stress, improve physical and mental health, and promotes a healthy self-esteem. Grateful employers set the tone for their workplace and help create a positive work environment.

– Let them be proactive: open the floor to employees through an Idea Challenge. Be transparent about the issue and explain what needs to be achieved. Reward the top five ideas, implement the best one and provide recognition for the finalists by sharing with leadership or via communication to the entire company.

– A “Solutions Only” policy: it’s normal to have issues or problems every day, so by following the previous advice, it means taking responsibility and being solution-minded. Encourage this in the workplace by asking employees to report a problem with a suggested solution at the same time.

Contact Info:

• Website: www.ecogautoparts.com
• Instagram: ecogreenautoparts
• Facebook: https://www.facebook.com/ecogreenautoparts
• Twitter: @ECOGreenAutoPar

Image Credits
Photos by ECO Green Auto Parts