Willis shares an important business lesson he learned where you would least expect it.
I got the inspiration to create new services within my companies from visiting a theme park.
When I was younger and I went to a large commercial theme-park for the first time, it wasn’t just a theme park to me or a place to have fun. To me, it was a model of how to build businesses within a business. I paid a fee just to get in the gate. And then when I went to a restaurant, I paid to eat and drink. Then I paid money at the gift shops. I paid for tickets to the rides. Everything I did was another business. I thought, “Okay, I’ve got to find a business that has multiple revenue streams within it.”
Theme parks taught me about building other revenue streams. Every time you can add a revenue stream to the same pipeline, the profit margins change drastically. You are putting more through that pipe. That’s what I always tried to do in my businesses, and it is how we were successful.
Willis Johnson recounts the early beginnings of Copart and when the original Mather auto yard began to offer more diverse inventory for different automobile types.
The Mather yard, the mother business that started it all, continued to succeed. But I was concerned. Selling the parts from Chrysler while the Detroit plants were shutting down to those who needed them was a cash cow for now. However, it would be harder to do business because fewer people would have Chrysler vehicles to repair if these shutdowns kept happening.
As I attended auto auctions, I noticed there were more mini-trucks than ever before. The 1973 oil crisis had sparked the popularity of more fuel-efficient vehicles like the Chevy Luv, Ford Courier and Datsun pickups. Yet there were no yards that specialized in these unique vehicles.
Seeing this as an opportunity, I opened up Mather Mini-Truck in West Sacramento. I chose to predismantle the trucks and rack the parts. I shipped in aftermarket sheet metal from Taiwan to fill the inventory and told other dismantlers I was specializing so they could send mini-truck business my way.
It was another instant hit, and the success of the business remained constant. As the business grew, Datsun turned into Nissan, the Ford Courier turned into the Ford Ranger and the Chevy Luv went to the S10.
Willis Johnson recounts the early beginnings of Copart. This is a story he shared in his book Junk to Gold.
With all the inventory that was going in and out after the success of buying more cars from Bob’s Towing Service, we needed a more efficient way to track it.
At the time, most people kept paper records of all their parts. I was one of the first in the business to computerize inventory—an idea I got from my buddy Marv Schmidt.
I spent $110,000 on a large reel-to-reel computer—about double the amount most people spent on a house at the time. Other people thought I was crazy for spending so much money on a computer for a wrecking yard. It turned out that the whole industry would end up computerizing once they saw the benefits it gave people like me and Marv.
As large and foreign as this machine seemed back then, it paid off because it gave me a complete picture of the business and the inventory, which in turn gave me more knowledge and control over the yard, which helped me make more money.
In honor of Father’s Day, here are excerpts from Junk to Gold about Willis Johnson’s father and some of the many memories he has of him.
The time I spent as a kid with my dad was much more of an education for me than what went on between school bells.
When I was about twelve, I’d help out after school at the construction site my dad ran. As I swept and cleaned up, I paid attention to how my dad ran a crew, measured, cut and hammered. He always seemed to get it right. I thought there was nothing my dad couldn’t do.
But as hard as he worked, Dad wasn’t just about business. Everything he did was for family.
My mom told me that on the night I was born in Clinton, Oklahoma, she and Dad had been dancing a jig in the living room as my older brother and three older sisters ran around the house. The day I came home from the hospital, Dad had the ambulance play lullabies the whole way.
Willis Johnson learned the value of first impressions when he was establishing a partnership with the owner of a cab fleet. During the time that the owner was still trying to get to know Willis and his company, the owner decided to test the waters by starting off with making a small order. Even though the order wasn’t as big as Willis had hoped for, it was just big enough to get things going.
Willis filled the order himself and personally delivered it. The owner, impressed that he had taken care of it so quickly, made a bigger order—the big order Willis was hoping for—right away. When Willis returned to the owner with the bigger order, he approached and saw the owner laughing and joking with two other guys that he didn’t know. After seeing this, Willis became worried that the deal might have gone sour and that the owner wasn’t going to take all the parts after all. After climbing out of his truck and stepping up to the men in the lot, the owner turned to Willis and introduced him to the owner of Yellow Cab Company and the owner of Luxor Cabs. They both wanted parts too.
The professionalism, expediency and great first impression Willis established led him to doing business with two other larger cab companies because the owner of the original deal was so impressed. Willis writes: “with any deal, you want to treat folks right, like you’d like to be treated. And first impressions matter.”