By Neil Pascale
FORT WORTH, Texas — Steve Johnson, president of national distributor Tucker Rocky, can see both sides of the recession coin.
There are the cautionary steps a company must take, which is why Johnson in an interview with Powersports Business preached inventory control, watching costs and taking care of customers when he discussed how the privately held corporation has handled an industry-wide drop in aftermarket sales.
But there’s also the flip side of the recession: Not withdrawing into a cost-cutting shell so much that opportunities cannot be jumped on. Tucker Rocky did just that recently when it became a co-distributor of popular helmet brand, Scorpion. In its National Sales Meeting held recently in Fort Worth, the distributor also showed off other new suppliers, including Renthal, DVS shoes, Von Zipper and other new manufacturers.
“The industry is not dead, it’s changing,” Johnson said. “The mix of the product has changed.”
What kind of retail sales volume change has occurred within the industry? Johnson said the same store sales information provided by ADP Lightspeed to Powersports Business, which has shown parts and accessory sales down around 15 percent for most of the year, is an accurate portrayal.
“Clearly, there are product lines that are being impacted more than others; specifically those that are typically financed with new unit sales. However, many dealers are packaging those same accessories with used bike sales, which are on the increase,” Johnson said. “The products that are not affected are the service items — tires, oil, chains and batteries. These products are doing very well.”
But the downturn has forced Tucker Rocky to re-examine its business model — “a hard thing, but a good thing,” Johnson said of the process.
“We’re looking at all of our processes. We’re looking at making sure if we see a volume drop that we’re responding to it, whether it’s on the operations side or the customer service side.”
Like its dealer partners, Tucker Rocky also is looking at its inventory and whether it can simplify its inventory in places and “focus on inventory turns,” Johnson said.
“We have grown massively in the number of manufacturers that we have brought on board in the last six years,” he said.
“On the one side, we always look at manufacturer performance,” Johnson said. “But the other side is we still perceive ourselves as a growing company and there are other brands out there, great brands, that we want to distribute. We plan to continue to aggressively look for new opportunities.”
That was certainly the case with Scorpion helmets, a brand that had a significant presence at the distributor’s Fort Worth show. Until the new arrangement announced earlier this summer, Scorpion had been distributed dealer direct only through SSI.
Johnson says Tucker Rocky’s previous relationship with Scorpion’s parent company — Kido Sports had manufactured products for Tucker Rocky — led to the new distribution arrangement. Johnson also believes the distributor’s systems and shipping — it has seven warehouses — and their sales force also played a part in Kido Sports’ decision to change its distribution model.
“If you’re going to grow, it’s natural to think about Tucker Rocky,” Johnson said.
In addition to looking at its inventory as well as monitoring its fill rates, Johnson and Tucker Rocky are closely watching the health of their dealer network.
Johnson said the distributor has had at times become a “bank for parts and accessories,” providing credit to dealers to continue their business in this rough retail environment. One prominent dealer even stepped forward during one of the distributor’s National Sales Meeting events and thanked Tucker Rocky management for being supportive of the dealer network.
“We obviously want to work with good dealers and dealers that are going to be here long term and survive all the current economic changes but we have to be cautious and mindful of credit,” Johnson said.
Even with those challenges and perhaps even more that lie ahead for the industry, Johnson does see a number of positives, including the growing consumer base of motorcyclists, enthusiasts and commuter riders. While there are fewer new units being sold, Johnson believes the total number of used units being sold is growing. He believes if the dealers focus on customer service, stay connected to their customers, create an environment that attracts customers, have good clean inventory and watch the financial side, there are still huge opportunities out there.
“As the economy turns around, I think that we and our great dealer base will be in a fantastic position to take advantage of those opportunities,” he said.
Copyright 2009 Powersports Business