Strength in Numbers | NACS – Magazine – Past Issues – 2011 – October 2011
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Strength in Numbers

By Pat Pape

It is said there is safety in num­bers, but there is power in num­bers, as well. That’s the princi­ple behind the National Alliance of Trade Associations (NATA), created in 2000 to help form relationships, strengthen buying power, share best practices, foster education and pro­mote unity among business owners that have the same ethnic and cultural background and who run similar retail operations.

While some members of the Texas-headquartered association own jew­elry stores, hair salons, fast food out­lets or dry cleaners, the majority operate convenience stores. NATA is a faith-based organization, consisting of Ismaili Muslims, a community of ethnically and culturally diverse peo­ples living in more than 25 countries around the world. Around the world and throughout the United States, Is­maili Muslims contribute to the devel­opment of the communities in which they live through a wide range of busi­ness and civic initiatives.

"Today, we have 13 individual trade associations across 10 states with a member store count totaling more than 5,000 convenience stores and gas stations," said Zameer Merchant, president of Tristate Trade Association, which is headquartered just outside Memphis, Tennessee, and is a member of NATA.

"Collectively, our members employ more than 20,000 people," he said. "They tend to be fairly diverse. Some are single-store operators; however, many of them have acquired multiple stores, and some are involved in other ventures."

Ethnic and culturally oriented trade associations with similar business goals have proven to be a boon for their mem­bers, and the concept is growing, ac­cording to Michael Davis, vice president of member services at NACS and former single-store owner.

"They came to be out of the commu­nities where the members live and work," Davis said. "Community is ex­tremely important, and their communi­ty and business are tightly connected. They wanted respect in the business community; to take advantage of scale; raise the professionalism of their mem­bers and to serve their communities."

Shared Experiences

Association members meet regularly to discuss issues influencing retailing in general and their stores in particular. Some of the associations charge dues while others expect members to chip in for expenses as needed, but they all seek new ways to slash costs and boost prof­its. They are also generous with their time and knowledge, and when it comes to coaching new store owners —com­petitiveness takes second place to shar­ing business savvy and working on be­half of the group.

"The most important thing is the in­dustry knowledge and the connections," said Bipen Patel, chairman of the Asian American Retailers Association (AARA) based in Green Brook, New Jersey, and the owner of 15 convenience outlets. Not affiliated with NATA, the group repre­sents 1,400 member liquor and conve­nience stores and gas stations in New York, New Jersey and Pennsylvania.

"They will be competitive once they are in business," he said of fledgling op­erators. "When we are starting, we help each other."

According to Patel, lending a helping hand to new business owners is part of the culture in which they were raised. "They work a year or two and then have some money and some experience, and we help them find a business," said Patel, who has been a business partner to sev­eral of his former employees. If financial assistance is needed, members of the community often back the newbie.

"We share best practices with each other, and we train everyone and keep them up to date on current laws," said Moyees Merchant, chairman of the At­lanta Retailers Association (ARA) and the operator of four Georgia conve­nience stores.

The Atlanta group, with 1,028 store members, also provides new conve­nience store owners with a formal infor­mation packet that helps them kick off their new business, and leaders will as­sist retailers in other areas who want to form their own regional associations.

While all of the organizations recruit new members, their ethnic communi­ties are tightly knit, and it is easy for in­terested business owners to connect with the groups. "Every trade associa­tion is focused on membership expan­sion and actively works that process within their given geography," Zameer Merchant said. "We do, however, have people who seek us out."

Buying Power

It’s no secret that vendors prefer working with 500-store chains over a typical mom-and-pop shop and that large operators can better negotiate favorable wholesale agreements. But by combining the buying power of hundreds of small operators, many of these ethnic trade associations create the purchasing clout of a major chain, securing more favorable wholesale prices, generous rebates and substantial promotions.

Vipul Patel is executive director of the Asian American Store Owners As­sociation (AASOA), which is not affili­ated with NATA. Founded in 2009, the association represents nearly 1,000 re­tailers in Florida and the Southeast. Recently, the organization opened a Virginia chapter and plans to launch others in Maryland and North Caroli­na. Members operate everything from liquor to hobby stores, but most are convenience retailers.

The organization has worked with a propane supplier to develop a program for ASSOA members similar to what re­tail chains the size of ASSOA would ne­gotiate. "Now they have the same price for all our stores," said Patel, who, along with his brother, operates 11 conve­nience outlets.

The association also worked closely with an ice company to develop a simi­lar program for ASSOA members.

Patel believes these types of pro­grams are a win-win for both suppliers and store owners. "Programs of these types have led to increased purchases by ASSOA members and that’s good for the suppliers and good for association members," said Patel. "These types of programs not only help our members compete more effectively but also bene­fit consumers in the communities where our members operate."

In addition to working with small and regional vendors, some associations have negotiated with major suppliers, such as Coca-Cola, PepsiCo and Frito-Lay. The Asian American Retailers As­sociation has one full-time, paid em­ployee, an administrator whose job it is to seek out good deals for group mem­bers. "It requires a lot of time," Bipen Patel said of the job. "And these days a lot of small operators don’t have time to go look for better deals."

Association leaders welcome new opportunities to work with vendors in order to save money and increase prof­its; they’re open to having suppliers ap­proach them directly. "Where appro­priate, we utilize and market our size and structure to provide an avenue for suppliers to conduct business with us in an efficient and effective manner," said Zameer Merchant.

"If it’s a local or regional supplier, it would be best to contact the local trade association office," he said. "Each trade association has a negotiating commit­tee, and it would be the first point of contact. National suppliers are encour­aged to contact the NATA office."

Another good place to make contact: the NACS Show. Trade association members "are attending the NACS Show in record numbers," Davis com­mented. In fact, many exhibitors take advantage of the Show to meet with NATA and other ethnic American trade groups. "The Show provides exhibitors a great opportunity to meet with leaders of these associations as well as many of their members."

Another way the Atlanta group helps members cut costs is through group in­surance policies. It also helps them pre­pare their wills and create a power of attorney. "We try to cover them for un­foreseen circumstances," said Moyees Merchant.

When a new person moves into the area or opens a business, Vipul Patel quickly enlists them to participate. "You need to join the association because you’ll benefit," he tells them. "You won’t lose anything."

The Political Scene

As with national associations, regional trade associations also want members to be up to date on potential legislation and political issues. Some, like the At­lanta Retailers Association, have their own political action committees. And it was actually a political controversy that launched the AARA, according to Bipen Patel.

In 2004, New Jersey lawmakers want­ed to raise the state excise tax on ciga­rettes from $1.50 to $2.50 per pack. "No­body complained but retailers and smokers," said Patel. He and his peers began phoning other store owners, ask­ing them to get in touch with legislators and explain the problems that such a large increase could cause. With the backing of tobacco wholesalers and man­ufacturers, the store owners met some of the legislators at their state offices.

Widespread Reach:

  • Alabama Merchants Association: (205) 862-2523
  • Asian American Retailers Association: (973) 315-3118
  • Asian American Store Owners Association: (321) 271-7072
  • Atlanta Retailers Association: (770) 455-4455
  • Greater Austin Merchants Cooperative Association: (512) 374-1413
  • Greater Houston Retailers Cooperative Association: (281) 295-5300
  • Greater Orlando Merchants Association: (407) 355-3057
  • Midwest Business Alliance: (773) 381-2622
  • National Alliance of Trade Associations: (281) 491-0456
  • Northern Texas Trade Association: (972) 242-0100
  • South Texas Merchant Association: (210) 826-3786
  • Tampa Bay Business Alliance: (813) 749-8786
  • Tristate Trade Association: (901) 850-8788
  • Virginia Asian American Store Owners Association: (804) 931-5916

Patel spoke to the state treasurer personally. "We explained that this could start a black market for cigarettes and smokers would go out of state [to buy them]," he said. "We said, 'You’ll get less revenue.’" Eventually, the state cut the proposed increase by 40 percent, and "that was the beginning," Patel said of the association.

AARA Founder and Chairman Bipin Patel also serves on the NACS Board of Directors and is active in NACSPAC (NACS’ political action committee). Pa­tel also attends NACS Day on Capitol Hill events, supporting NACS and AARA members on issues such as swipe fee legislation.

In other parts of the country, associa­tions are quick to speak out on matters that would affect their stores. In the wake of several devastating hurricanes in 2009, Texas lawmakers proposed legis­lation mandating that convenience stores install high-priced electric generators to keep stores running in times of disaster. The would-be law targeted stores in cit­ies near the hurricane-prone Gulf Coast, including Houston, Beaumont, Port Ar­thur, San Antonio and Corpus Christi. Store owners would have been required to purchase, test and maintain the gener­ators at their own expense.

The Texas Alliance of Trade Associa­tions, which is made up of four separate organizations spread across the state, worked with an attorney/government relations expert to explain its members’ point of view to lawmakers. Association representatives contacted legislators di­rectly and let them know what effect the law would have on convenience stores —putting some out of business and forcing the loss of many jobs. As a result of the grassroots education and engagement, the legislation never passed.

"Obviously, impact is difficult to mea­sure," said Zameer Merchant of all the associations’ political activities. "We do, on a national and local level, work to keep our membership informed of cur­rent issues that may impact their busi­ness and as a group strive to work with elected and appointed officials to ensure a proactive approach to building a bet­ter, more vibrant community."

Not All About Sales

In addition to supporting peers in similar businesses, regional and ethnic trade as­sociation members have been responsive after major disasters as well. After a deadly earthquake in Haiti, "We came together and made a contribution," said Vipul Patel of his association, while one of the ASSOA founders, Dr. Kantilal Bhalani, traveled to the island to treat the injured. Meanwhile, the ARA responded to the devastation caused by Hurricane Katrina by collecting funds from mem­bers and donating to the Red Cross.

Zameer Merchant praises associa­tion members for tackling community challenges, in addition to promoting business growth.

"Without question our greatest strength is our membership," he said. "Our individual trade associa­tions and NATA itself, is governed by the members, for the members. The leadership positions are member volun­teers who pledge their time to the orga­nization as a service back to the other members and the community at large."

The future looks bright for these re­gional trade associations. Supporting their own —and helping their commu­nities —are just two ways the groups will influence convenience retailing and expand their scope in years to come. "There will continue to be similar groups formed across the country," Da­vis predicted. "And they will continue to grow and prosper as their members see the benefit of being engaged in their own groups and with NACS."

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer.?