So what’s the biggest challenge or the greatest opportunity of running more than one powersports dealership?
The answers from 15 multistore dealers from around the country were as varied as the dealer locations themselves, but several common themes emerged. Multiple stores not receiving volume discounts for orders or store-level billing instead of corporate-office billing was a top comment, followed by the compounded difficulty of finding quality workers.
Many dealers wish they were Barry Matteson, owner of Motorcycle Times Inc., the operating company for Harley-Davidson stores in Anchorage, Soldotna and Wasilla, Ala. “Running multiple stores really isn’t a challenge,” says Matteson. “I try to visit the stores regularly but don’t always manage, and that’s OK because I have really good managers.”
He notes the Wasilla store is 50 miles from Anchorage and the Soldotna store 150. But operating multiple dealerships in Alaska isn’t all sunshine (or lack thereof) and blue skies. Long, cold winters can impact sales and general overhead keeps creeping upward, Matteson says.
Matt Mechling, owner and general manager at Performance Power Sports in Seneca and Interstate Cycle in Cornelius, S.C., echoes the comments of many when he laments OEMs and accessory vendors that treat his two stores as separate entities.
“I’m dealing with this issue right now,” Mechling says of his second location, which has been open for less than a year. “If there’s one rep per store, I have a battle on my hands to make sure each parts manager doesn’t order too much.”
Some vendors work well with multiple locations, Mechling says, but many others don’t.
“I wish it was easier to combine purchasing power,” Jimmy Allison says in response to a question about how he’d like to see the industry change. Allison is a managing shareholder at two Champion Motorsports locations in New Mexico. “Some companies won’t do that and allow a price break,” Allison says. “They want to keep a few more pennies for themselves.”
Tejas Motorsports does receive volume discounts from many of its major suppliers for its stores in Victoria and Houston, Texas, but dealer principal Steve Ertle says negotiations are necessary with smaller vendors. “Our parts managers talk to each other to make sure they are paying the lowest price,” Ertle says.
Other comments were centered around employees and the level of professionalism that’s required of workers to compete effectively in the powersports business. “A lot of people started their dealership as a hobby, but now it’s big business,” Matteson says. “We’re not growing the internal part of the business as much as we can.”
And that requires hiring, training and retaining the best and the brightest, adds Scott Lyons, co-owner of Reynolds Powersports, Gorham, Maine, and Big Moose Harley-Davidson in Portland. “Just being able to keep good employees is a challenge,” says Lyons.
When asked to provide a reason, Lyons pointed to the high cost of insurance and benefits, but also said, “It’s a little bit of everything. Other dealers are having the same problems,” Lyons says. “We try to make this a nice, clean, friendly, fun place to work.”
Better training opportunities, such as those in the automotive industry, would go a long way toward improving the image of the powersports industry as a career choice, says Chris Watts, owner of three America’s Motor Sports locations around Nashville, Tenn. It also would improve the skills of those just coming into the industry.
“With the right people, the business runs so much smoother,” says Roc Northey, owner of three Sky Powersports locations in Florida. “It doesn’t matter whether you’re trying to sell on the lowest price, service or some other factor, it all boils down to people.”
Northey envisions OEMs enticing store owners to train employees on their products by offering specials to participating dealers. And that training shouldn’t consist of just a manual or a course offered by the dealership sales manager. “The trainer has to be a good trainer,” is how Northey puts it.
Clay Wilwert, owner of Wilwert’s Inc. locations in Dubuque, Iowa, and Galena, Ill., wishes Harley-Davidson would separate the invoice billing for his two locations so he could gauge the profitability of each store without parsing the list himself. And Watts would like to see OEMs exercise some restraint on where they locate new dealers and the amount of inventory they pump out to dealers.
Speaking of manufacturers, Kurt Finley, president of the two-store Colorado Powersports, expressed a desire for stronger ties between manufacturers and dealers on such issues as inventories, training and financial support. “Manufacturers and dealers are important to each other, but you wouldn’t always know it,” Finley says.
The need for greater cooperation also was expressed by Greg Mackey, president of four dealerships in the Florida Panhandle, including Honda of Jacksonville, and two in South Georgia. Mackey says Honda has what he calls restrictive guidelines on how many stores an owner may have in a zone or geographic area, and Harley-Davidson wants on-site owners, which isn’t a good fit for his company.
And with six stores, Mackey has filled out more franchise paperwork than most other dealership owners have and laments the cumbersome amount of documentation that’s required. “You can have a good history with a company and still have to dot the ‘I’s’ and cross the ‘T’s,’” Mackey says.
Any business venture can be exhilarating and frightening at the same time. The bigger the venture, the bigger both the risks and the rewards.
“Owning multiple stores is tough and not for everybody,” says Northey from Sky Powersports. “When things are going good, it’s twice as good. But when it’s bad, it can be twice as bad.” psb
Copyright 2007 Powersports Business