The API Marine Story

1973

How API Marine was started

Re-written 1/2011* 3,970 Words

Howard Yasgar

Part 1

In 1965, our company Automotive parts Industries, also known as API, was located at 4101 East 11 Avenue in the city of Hialeah Florida.

The company, had been started by Dave Chait, who had moved to Florida with his family in the late 1950’s.

Dave’s family owned a junk yard in New Jersey and when he moved to Florida, he opened an auto parts store on Palm Avenue in the city of Hialeah.

Dave said it was hard to find sources of rebuilt auto parts back then, so he sold the auto part store and he opened the auto parts rebuilding company calling it API.

In 1973 the company moved to 4500 North West 36th Avenue in Miami.

I entered the company as a junior partner in late 1963.

My job was to divide my time between making sales calls in the morning and managing the rebuilding shop in the afternoon.

The company had around 20 employees and we were rebuilding both automotive and truck parts.

In 1965 Dave’s son Donald Chait also joined the company, and he began making sales calls like I did.

At the time our sales were mainly to commercial truck fleets, vehicle parts dealers and exporters.

In December of 1970, Don’s father passed away. That’s when Don and I purchased the assets of the company from Don’s mother for $35000.00, which was to be paid to her over several years.

Since I had quite a bit of rebuilding experience, I took over the running of the rebuilding end of the business and Don handled the managing of the office and sales.

Around 1973 we saw that the automotive business was slowing down, and we knew the reason why.

In 1958, Fidel Castro had taken over control of the country of Cuba, and Cuban refugees were leaving the island as fast as they could, and they were all coming to Miami.

Many of the Cubans were excellent mechanics, and they soon started converting their homes into illegal parts rebuilding shops.

By the end of 1973, it appeared as if there was a Cuban auto parts rebuilding shop located on almost every block, and they were selling cheap rebuilt parts to all our customers.

None of these Cuban rebuilding shops had licenses, nor did they pay any insurance or other expenses like we did.

Consequently, we realized that for us to survive, we needed to get ourselves into a more technical business. We needed to get into a business that we wouldn’t have to compete with all the Cuban mechanic shops in Miami.

So, one morning, I sat down at my desk and made a list of all the different industries that I felt we could investigate and possibly become specialists in.

It needed to be an industry that would be more technical than the automotive industry.

My list started out with the aircraft Industry, then there was the truck industry, and the forklift industry and eventually my list got very long, it included the agricultural industry, the golf cart industry and at the end of the list was the marine industry. These were all industries that if we got into, we could probably become specialists.

I took a walk around our building and our warehouse. I was hoping that I would spot something that would give me a clue as to what new industry we could get ourselves into.

In the rear of one of our buildings we had shelving where we stored lots of used starters, and I was hoping to find something there, something that we could experiment with.

That was when I first saw a small starter motor that looked like it came from a marine outboard engine.

The small motor was made by the Prestolite Company, which was a company that we were very familiar with.

As all our employees watched, I took the small starter to a work bench and disassembled it, and I studied all its components, I was looking to see if we had any repair parts in our stock that I could use to rebuild the motor.

It turned out that we did have some of the small repair parts, so I proceeded to rebuild, test and paint the small starter motor.

I had absolutely no idea as to what engine the starter would fit, or even if there was any market for it.

What I did know was that after I had rebuilt it, it looked and worked beautifully.

I excitedly took the finished starter up to the front office to show my partner Don.

As usual, my partner Don, who had no mechanical ability, and he also had very little enthusiasm in what I thought might be a very exciting discovery.

As we studied the newly rebuilt starter, neither of us knew what fit on, or how much we could sell it for, nor did we have any idea if anyone would even want it.

After spending the rest of the day looking in all our parts catalogs, I determined that the starter was for a Chrysler outboard marine engine and it would have cost $68.00 if we were to buy it new.

My partner Don asked me, “What I thought was our cost to rebuild the starter”? I had no idea, so I suggested that we try selling it to someone for $22.50, on an exchange basis. That meant the customer

had to give us his old starter when he bought one of ours.

I had no idea but I thought that $22.50 sounded like a good price to try.

I thought that since the rebuilt auto parts industry worked on an exchange basis, the marine industry could work the same way.

The next morning, Don said he would go out and call on a few marine dealers to find out what they thought about our rebuilt Chrysler outboard marine starter.

When Don came back that afternoon, he opened up the car’s trunk.

Not only had he sold the rebuilt starter for $22.50 exchange, but he had also brought in another 15 more outboard starter motors for us to rebuild.

As I looked over the used starters, I determined that I could easily rebuild them all.

It looked like we had found a good business to get into, it was a very technical business with no Cuban mechanics to compete with.

Don said he found absolutely no customer resistance when he sold that first starter for $22.50 exchange, so we decided to stick with that price, at least until we learned more about the marine starter business.

I asked Don what he had paid for the 14 extra used starters he brought in? He said the dealer had just told him to take the starters and credit him with a fair price.

We decided we would keep the starters and pay him $5.00 for each one.

Don called the dealer and told him the price we would pay was $5.00 each, the dealer was elated, he said he didn’t want our money he wanted more rebuilt starters.

At that moment we knew we had just found ourselves a new business to go into.

The next day, we decided Don would start calling on outboard marine dealers in the Miami area and he would try buying all their old used outboard starters for $5.00 ea.

As Don started calling on marine dealers, I started setting our shop up to rebuild outboard starters.

Every morning, I would spend the first two hours reading marine parts catalogs, I wanted to learn as much as I could about the outboard marine business and I soon found that there was a lot for me to learn.

I started writing down all the different manufacturers, and I made lists of all their models.

I couldn’t believe it, there were so many outboard engine manufacturers, there were even some that I had never heard of before, but what was interesting was they all used different starter motors.

It was an exciting time, because I knew we were now getting into a more technical business, I was so sure it was a rebuilding business no one had even thought of going into before.

Once I identified all the starter manufacturers and the different models, I made up a master book listing all of them in numeric order.

The next project was to identify and source all the individual parts that we would need to rebuild outboard starters.

Every afternoon, Don came in with the trunk of his car full of outboard starters for us to rebuild and he brought in lots of used starters that he was buying for $5.00 ea.

There were no computers back then, so I developed a numbering system for all the parts by using my own alpha and numeric numbering system.

All the research work was done using lots of 3 X 5 cards and homemade spread sheets.

It was a daunting task, but I found that I enjoyed doing all the research, because I knew that I was breaking new ground, I was learning what starters fit the different outboard engine models.

Little by little, my partner Don was calling on every outboard Marine related customer in the Miami area.

That was when I decided to spend two days each month making a trip to Key West and calling on marinas.

My plan was simple, I started heading south to Key West, calling on any potential marinas on the bay side (right side) of U.S. 1.

The first marina being Gilbert’s in Key Largo.

I then stopped at every Marina, with my last stop being Bonefish Harbor Marina, from there I drove straight down to Key West.

The first two trips I made were totally unproductive, it appeared the people in the Keys distrusted people from Miami, especially salesmen.

I remember reading that the secret to success as a salesman was persistence, and it was true.

On my third trip, while I was at Bonefish Harbor Marina, they asked me if my company could rebuild marine power tilt motors.

I had no idea as to what they were talking about so they showed me a large wooden crate full of

used power tilt motors they had been saving.

I filled the back of my Falcon station wagon with the tilt motors, promising them that I would investigate repairing them, I was certain it was going to be an entirely new highly technical business for us.

I always stayed at the same hotel in Key West, and then in the morning, I would start calling on the few Marinas that were on the island.

Eventually several mechanics in Key West directed me to an outboard motor repair shop, they said it was the only one in Key West.

The owner of the shop was a nice fellow who said his father was once the Mayor of Key West, he had over 100 old outboard starters that he had been saving for years. So, I bought them all for $5.00 each.

After my third trip to Key West, the results were amazing, I was now treated as a welcome friend at every stop I made.

Apparently, it took a minimum of three trips to the Keys before the people there perceived me to be a regular guy.

For API Marine, the rebuilding of outboard starters was now a growing and profitable business, and

Now, I started spending most of my time in the factory rebuilding outboard starters, and sourcing repair parts.

Because we were so busy, there were several things that became apparent. If we were going to expand the marine business, we needed to design a professionally done catalog.

Also, because, we were considering eventually selling national, we needed to find a sales representative to call on new and bigger customers.

As we called on more Florida marine dealers, several of them asked if we could also rebuild marine starters and alternators used on inboard Marine engines.

Marine inboard engines were very similar to automotive engines, however the starters and alternators needed to be explosion proof, making them more expensive.

I started looking into the situation and soon felt the rebuilding starters and alternators for inboard engines could be a whole new business for us to get into.

I thought it might be good business, because not only did the marine starters need to be explosion proof, but there were left hand and right-hand rotations, so obtaining the special parts needed to rebuild them was going to be difficult, and that made it exciting.

I found the same situation existed, with rebuilding marine alternators, they were all explosion proof, and finding parts to rebuild them, would be difficult.

I took it as a challenge, and I started working on producing a catalog, that combined both inboard and outboard starters and alternators. It was a whole new business that had just opened for us.

Before going into print with the catalog, I wanted to find out if there really was a strong market nationally for our remanufactured marine program.

In 1978 I was on a business trip to New York with my Cuban friend Miguel Marquez. and I decided to take a side trip to show Miguel my house located in New Haven Connecticut.

When we were returning to New York, as we passed over the Connecticut river, I could see hundreds of boats there, so I decided to stop and speak to a few marina owners.

I wanted to show them my prototype marine catalog and get their opinions; I wanted to know if the New England marinas would buy inboard starters and alternators from a Florida company.

At the first marina I stopped at, the owner was very enthusiastic, he wanted to know where he could buy our products right now.

I was elated, as I went to call on the next marina.

At the second marina, I showed the owner my catalog, and he said, “I know your company, I have your catalog”.

I said that’s impossible; we hadn’t printed one yet.

We went into his office, where he handed me a catalog with a colorful picture of an outboard starter on it.

The catalog was from a company in Michigan called Marine Electric Company or MEC.

I couldn’t believe it, we had a competitor rebuilding outboard starters in Michigan, it was a company I had never even heard of before.

He gave me their catalog and I brought it back to Miami with me.

Once in Miami I compared the information in the MEC catalog to the information I had researched,

and I found both our catalogs were identical.

Then I tried getting more information on the MEC company, but I couldn’t find anyone that knew anything about them.

By 1980 we were in full swing, we were rebuilding outboard and inboard starters, also marine alternators and power trim motors. Business was booming and many things were happening.

We printed a nice colorful marine catalog, then we started advertising in marine magazines looking for a national sales representative.

The problem was that we really had no idea as to how to go about finding a sales representative.

Another problem was that as our sales grew, our need for replacement Prestolite parts grew, but we had no source to obtain them at a reasonable price.

At the time we heard of a company in Chicago that rebuilt Prestolite ignition distributors, and I called him and asked him where he got his Prestolite parts?

He hesitated, in telling me, but when I offered him a 10% finder’s fee he relented. He told me his source was a Chicago company that bought all of Prestolite’s scrap. His name was George Lustig.

I called George and he said yes, he had everything we needed, and he said they were getting it from a fellow in Detroit who was stealing it illegally from Prestolite.

I didn’t like the sound of that at all, but we desperately needed to find Prestolite parts.

So, I placed a $3,500.00 order with George for outboard starter housing’s made by Prestolite. George said he would deliver to us in Miami in 60 days.

My partner Don happened to be in Detroit at the time, so I asked him to look in the yellow pages for a surplus sales company, perhaps he could find the company that was supplying George in Chicago.

After a couple of calls Don hit pay dirt, he found Barney Kaplan Surplus also known as (BKS).

I called Barney, and he said yes, he bought all of Prestolite excess and factory rejects, and he would be happy to meet us.

The next day I flew to Detroit, and Don and I met Barney. It was a meeting like no other, it was the best meeting I ever had.

Barney was so happy to meet us and we just loved him.

It appears that Barney was the supplier to MEC, the outboard starter rebuilder in Michigan, but the

company, MEC owed him a lot of money and they were going out of business.

Consequently, Barney had lost his biggest customer, and he was loaded with tons of Prestolite outboard starter parts. He also had tons of Prestolite marine alternators and parts.

I told Barney we had just spent our entire budget with George Lustig in Chicago, he said yes, he knew all about it, because he was supplying George, the company in Chicago.

Barney assured us he was legally purchasing all the excess and scrap parts from Prestolite and he would be happy to take me to see the Prestolite factories.

Barney said we could buy anything we wanted from him and we could pay him little by little.

So, we did what he said and I stayed there in Detroit for a week, and I bought an entire trailer load

of marine parts.

API could now expand its sales nationally.

All API Marine needed now was a good sales representative to start calling on customers in other states.

We started advertising in marine magazines and after answering several replies, we eventually signed up a promising representative who said he called on dealers in New England.

Three months went by and we never received one order from him, so we ended up terminating him.

One evening, we were working late and there was a phone call from a fellow who said he was a sales representative calling on marine dealers. He said that he was already selling underwater camera cases, as well as several other marine related items.

He came to our office; his name was Karl Bergren and he was a perfect fit for us.

Karl knew the marine business and told us he had once worked for a large manufacturer named Joy Compressor Co, but he had now decided to get into the marine sales business.

We loved Karl and offered him a 5% sales commission

Right away, he started opening customers everywhere, starting in upstate Florida.

Because of all the customers he was opening, Don and I needed to start attending marine trade shows.

I built a portable fold-up display that we could ship to the shows in advance.

Then at a trade show in Tampa, Florida we met several manufacturers that said they had been approached by Karl, and they said Karl said he wanted to represent them.

One fellow was a manufacturer of pontoon boats, and he was concerned as he would have to give Karl a sample pontoon boat, trailer and engine.

I told him what Karl had done for us, and he decided to hire Karl.

In the meantime, Karl kept on opening new customers for us.

One day he approached us with a proposition, he was representing a company that made underwater

battery operated scooters that would pull you around in the water.

Karl said he could buy them unassembled for $400.00 and his son could assemble them. Then we could install timers in them and then rent them to dive shops, charging them by the time used.

It sounded good so we invested 50%, which was $1700.00.

Several months went by and we didn’t see any scooters, Karl said he was assembling them.

Something sounded wrong so we called the scooter manufacturer, he said Karl had never ordered any scooters.

Next, several marine dealers called, and they all said they had given Karl merchandise that he never paid for.

It appears he had also illegally sold the pontoon boat, engine and trailer. We tried calling Karl but he was gone.

The calls kept coming from marine dealers he had cheated in one way or another, some thought we should pay them, Karl had told them he worked for us.

About 6 months went by and we received a lawyer’s letter; it appeared Karl was suing us for unpaid commissions we owed him. What nerve, but we paid it.

Karl was a crook, but it was because of Karl that we had attended the marine trade shows, and we had now learned how the marine business really worked.

We had always called directly on marine dealers, but we now learned there were large marine distributors located all around the country, and they had salesmen that called on all the marine dealers in their territory.

It was now obvious that we needed to start selling to distributors and stop selling to dealers.

It was from attending the marine trade shows that we learned how sales in the marine industry worked, our rep called on dealers, however we learned that there were representative organizations that only called on marine distributors.

We had never sold to a Marine Distributor before, but they were the top rung of the marine parts

distribution system.

That evening, we met with William Miller. William was about 65 years old, slightly balding and he wore glasses. He was dressed in a nice brown business suit and spoke with a deep Memphis Tennessee drawl. William Miller was a very impressive person.

William and I sat Knee to Knee as I went through our catalog with him, but I could tell he already knew all about us, and our line of products.

We can put your products into every Marine Distributor in the Southeast of the United States.

That's when I started to get scared. A shiver ran down my back.

I had always hoped that this day would come, but I knew that there were a whole lot of new problems that would have to be resolved, and I wasn't sure I could resolve them.

Our pricing would have to be changed to allow the Distributors a markup.

Our prices now need to include a commission for William F Miller Co.

We also had to come up with a freight policy.

The worst problem was we didn't have enough marine starters and alternators to ship and I was

afraid we would be biting off more than we could chew.

William Miller was used to selling new products, where the manufacturers could simply increase their production.

But we were rebuilders, and we needed to find old used starters and generators to rebuild before we could ship anything.

I was sure Mr. William Miller didn't have any idea of what we had to do to produce a product.

I looked at Mr. Miller, and I said that I didn't want to let him down, but I was afraid we could never

be able to produce the quantity of units that he would need from us.

We were still sitting Knee to Knee and Mr. Miller bent over to be closer to my face.

He put one hand on my knee and said softly, with a Memphis Drawl “Son, Sales Solve All Problems”

We shook hands with Mr. William Miller, and said good night. Don and I left the Hotel, uncertain of what we would do.

(See the API Marine Story Part 2)