Pre-owned sales, inventory double at RideNow chain
Mark Tkach knows the value of adding pre-owned units to showroom floors. And while several dealerships in the RideNow Powersports retail chain have had success in pre-owned sales for years, all of the nearly two-dozen stores in the chain put pre-owned high on their sales charts in 2011.
Chalk one up for pre-owned. Tkach told Powersports Business in a December interview that RideNow’s pre-owned sales were up more than 100 percent in 2011 compared to 2010, and pre-owned inventory had also increased by 100 percent in 2011 compared to 2010.
“We made it a focus,” said Tkach, managing partner of RideNow Powersports. “We really forced it on all of our stores this year.”
In fact, many RideNow locations now have a used inventory manager. At larger RideNow dealerships, pre-owned units are the pre-owned manager’s lone duty. At smaller stores, the pre-owned manager also handles online leads and transactions.
There’s plenty of work these days for pre-owned specialists at dealerships. And while auctions remain a trusted source of movable product, Tkach has found that obtaining pre-owned from a variety of sources has helped the company’s bottom line.
“Auction for us is playing a less of a role,” he said. “If it’s a closed [Harley-Davidson] auction, we might do that. But except for the Harley side, we’re using the auction less and less to build our used inventory.”
With more than $14 million company-wide in pre-owned inventory, RideNow boasts a nearly equal mix of import to Harley.
“It may be 55:45 ratio — a little heavier — on the Harley side,” he said. “We’re selling a ton of used Harleys out of the import stores. On the front end we’re pulling $500 more on used Harleys out of the import stores than the Harley stores.”
Although obtaining pre-owned inventory can be challenging, Tkach needs to only check the books to see its importance.
“The used business has been great for us,” he said. “It’s working across the board. We had to force the issue and feed the product, but it’s working.”
Tkach estimates that for RideNow’s multi-line stores, pre-owned accounts for about 25 percent of the inventory. But the segment overall ranks a close second in profitability.
“Frankly when I look at every brand I have, only one brand has generated more gross profit than [pre-owned] when I combine them all. Harley is the No. 1 gross profit generator, and used bikes is a close second. Used bikes is the second-best brand we have,” he said.
As Tkach encountered, capitalizing on pre-owned sales isn’t simply matter of painting a “We Take Trades” sign across a store’s front window. Although that’s a start. These days, extensive time is spent searching online and on the phone for pre-owned inventory.
“It’s not easy to focus on used sales,” Tkach said. “You have to work to buy the product. It’s a lot of work, but if it’s easy, everyone would be doing it.”
Bikes that come in for service are also prime candidates for pre-owned inventory, depending on the amount of service repairs that are needed.
“We try to see if our service guys can get an ‘OK to trade’ stamp on it like in the old days,” Tkach said. “We’re also targeting people that bought certain bikes in the past few years that maybe had large factory incentives and bought units well below current market values. We’re calling those people and telling them that the bike they have is a nice bike that we’d like to have back to resell, and see if they’re interesting in trading for a new bike. It takes some beating the streets and making a lot of phone calls.”
It’s a combination that has yielded enviable results at RideNow.