AutoZone, Inc. AZO

The business

AutoZone sells the alternator, the brake pad and the battery. Two customers walk in. One is a person whose car will not start and who has decided to fix it in the driveway, which is the retail half and carries the fatter margin. The other is the independent repair shop down the road that needs the part in twenty minutes, which is the commercial half and carries volume.

The moat is the parts hub, not the brand. Seven thousand eight hundred and fifty-six stores, of which 6,766 are in the United States, 933 in Mexico and 157 in Brazil, sit on top of a distribution network that can put an unusual part in a mechanic's hands the same day. Nobody replicates that without spending twenty years and several billion dollars, and the customer is not price-shopping a water pump while the car sits on the lift.