Fesco strikes distribution deal with auto parts wholesaler Auto Don
Published:Sunday | October 13, 2024 | 12:07 AMNeville Graham - Business Reporter
Petroleum marketing company, Future Energy Source Company Limited, is moving to carve more market share for its proprietary Jamaica-blended lubricating oils, Futroil.
Petroleum marketing companies generally market their own brands, but with only 22 locations, the market reach for Future Energy, which trades as Fesco, is constrained, since sales would be limited to the odd motorist needing a quart of oil for a top-up, whereas four to five quarts are needed for an oil change when vehicles undergo servicing at intervals.
Generally, lubricating oil needed in those quantities is purchased at the local auto parts store.
This is where wholesalers like Auto Don come in. There are other wholesale operators such as Bert’s, Excel, Genesis and Tropical Battery who operate on a wholesale basis but are limited to filling orders or offering a special line of parts or products. Auto Don supplies fast-moving service parts such as frontend and suspension, air and oil filters, coolant and other components that a car needs at regular intervals based on wear and tear.
Head of Business Development and Marketing at Fesco, Stephan Ebanks, says although the company has 22 stations, there are competitors such as TotalEnergies and RUBiS with more than 60 locations each.
“They have a lot more reach because they’re everywhere. The challenge was how to expand the reach of our products without actually building more service stations,” Ebanks said.
“When I started looking around, everybody talked about Bert’s and others; that’s because they’re probably a lot more well-known because they have a retail arm. But in the market, there are wholesalers like Auto Don who are doing a lot more, moving more products than they are,” Ebanks said.
Auto Don Trading Limited is headed by founder and Managing Director Donahue Martin, and his 27-year-old son, Donnell Martin, who acts as special projects coordinator. Donnell also operates another related and developing business, Yaadway, manufacturing automotive accessories including fluids, detergents and air fresheners.
At Auto Don, a team of four salespersons operate islandwide with support from staff at the company’s warehousing and offices base located at Keesing Avenue in Kingston.
“We have guys dedicated to delivering parts, we have guys dedicated to reaching out to these customers, so that they can get their orders, and the customers can reach out vice versa,” Martin told the Financial Gleaner.
Martin said the company has been a supplier of auto parts for over 20 years to customers in all parishes.
“We pride ourselves in being reliable, so once a week, we just send our drivers to various locations, so that the customers in the different rural areas can get access to their auto parts, so they can also go out and sell, so they can make a living for themselves,” Martin said.
The distribution agreement covers about eight product items or stock keeping units, inclusive of the more popular ranges of viscosities that the public demands, such as 10W/30 for cars and 15W/40 for trucks and commercial vehicles, in addition to gear lubricants, Ebanks said.
“Fesco sees the arrangement as a path for moving the products to get traction in the market, as opposed to trying to use the expansive range of products that we have. We want to use a narrow range to build the brand and have good rapport with our customers and build trust,” he said.
Once that trust grows, Fesco expects demand for other products in the range to grow, he added.
Price-wise, Futroil will be going head to head with the likes of Chevron, which is the market leader for the budget-conscious. The Futroil prices are $820 for the 10W/30 oil and about $860 to $890 for 20W/50, Martin said.
“We try to position ourselves within the prices that we see in the industry. We try not to overprice, or we try to come right beneath the top players. That was deliberate and in discussions with Fesco, we made it clear that we needed to have that price flexibility so that we could be agile within the space,” Martin added.
Futroil is blended for Fesco by Paramount Trading Jamaica Limited, with discussions under way on the scaling up required to produce the additional volumes for distribution.
“Paramount has asked us for weekly expectations so they can put that into their production planning,” said Ebanks.
“Auto Don may not take 200 cases in one week, but they may take it in a third week. We’re giving them a weekly update as to what the production could be so they can appropriately satisfy the demand,” Ebanks said.