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Watch for profitable P&A trends

By Chris Peters

Dealership finds growth by looking ahead

Buy low and sell high. It’s a formula that’s worked so well for America’s Motor Sports vice president and co-owner Chris Watts that the dealership has acquired Suzuki and Polaris points.

With its flagship location in Nashville, AMS strengthened its presence in middle Tennessee by acquiring Polaris/Suzuki of Nashville in February. All Polaris and Suzuki inventory was shifted to the downtown Nashville location, with the other stores in Madison and Dickson.

Knowing the local business climate helped Watts and Co. decide that picking up the Polaris/Suzuki point would be beneficial to the company’s bottom line.

“We really thought we needed Polaris on our side of town. If we couldn’t get an open point, we were going to have to buy out the owner, so that’s what we did,” he said.

America’s Motor Sports bought the assets and inventory and closed the deal in December.

The chain is coming off a year that saw 20 percent growth compared to 2010. Watts credited being able to maintain key staff and “buying right on new and used and P&A” to the success at AMS.

Service was a key driver to success in 2011, and its taking momentum into 2012, where service is seeing anywhere from a 45-70 percent increase in business every week.

Cultivating existing customers also drives sales to the various departments.

“We did more marketing to our existing customer base. In the past we had been a pretty big advertiser in the Nashville market. We have throttled back on that,” he said. “We do more email marketing to our existing customers. We’re calling them up and reminding them in the winter to get their service taken care of. And we focus on things inside the store to hopefully capture them when they come in.”

Electronic messaging signs

One of those touch points comes from electronic messaging signs at all three AMS locations. The downtown Nashville location alone has about 117,000 cars pass by its 8-feet tall by 24-feet wide sign daily. Signs at the other stores are 8-by-8 and 2-by-8.

“The signs allow us to put out more of an immediate message that we can control, like ‘Free donuts right now.’ We’ve found the signs to be pretty impactful,” he said.

And while the signs are surely an investment, Watts used a relationship with a customer to ease the financial burden to purchase one of the signs.

“Our store in Dixon didn’t have a sign, but we had a customer who had closed down his retail flooring business, and he wanted to get rid of the sign,” Watts said. “So we traded him a motorcycle for the sign — a Yamaha Super Tenere for about $50,000 worth of signage. It was literally done with a handshake.”

UTV accessory sales

Getting to know his customers also helped business in other ways. In parts sales in 2011, AMS saw a major increase in UTV accessories.

The dealership progressed from not stocking an aftermarket item like Pro Armor doors at all to simply adding one to the showroom floor.

“First the order was one at a time, then we were ordering 10 at a time every three weeks. Then it was 20 every three weeks. We noticed the trend and started going deeper and deeper.”

Watts also capitalized on closeout items.

“We put together some deals with distributors where we would buy right and buy deep. Whatever I can do to make it grow, I’m going to do it.”

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