The relationships between your business, competitors and suppliers
The daily management of a powersports dealership can be challenging, not to mention interesting with very few dull moments. Throw in some curve balls from your competitors, your aftermarket suppliers, your OEMs and you have all the ingredients for a reality TV show! Those outside curve balls can be quite disruptive within your dealership so it’s best to strike a balanced relationship with those outside influences.
Let’s start with your competition. I’ve always been amazed at how dealerships in various areas and cities deal with each other. Some regions have dealerships that understand that everyone is trying to make a profit, that each dealer has something different to offer and therefore they get along. Sadly, other regions have dealerships that can’t stand each other and have no interest in getting along with the “enemy”. Life is too short and complicated to get upset and be consumed with this line of thinking. It takes your focus away from what’s really important and that should be your dealership.
There is something to be said for holding your dealership to a certain standard of professionalism regardless of how your competitor’s act. The respect you show is often reciprocated but when it’s not, there’s nothing wrong with taking the high road as it sets an example for your staff and leaves you with less stress in your business life. You can’t control how your competition conducts business, but you can control how your dealership does and you are the one to set that tone.
With regards to suppliers, I split them into two groups: your aftermarket companies and your major unit/OEM suppliers. Your relationship with these groups is crucial to inventory management, which we all have some difficulty in managing from time to time. Their job is to make sure you have lots to sell and they get paid to ensure you have as much of their product as possible. That doesn’t necessarily mean you need to have that much and that’s why your relationship with them needs to be balanced.
The key to a balanced relationship with your suppliers is communication. Your reps are a great group of people who provide you with product that help you turn a profit … but some of them really like to talk … and share information. I refer to some of them affectionately as the underground news network of the powersports industry. It stands to reason as they are the group that covers a large territory so they see and hear lots of things on a daily basis. I know this because I was one of them. It’s good to take those conversations with a grain of salt and keep the focus on your business.
I’ve found that visits and telephone conversations from these two groups are made up of two components; The regional or territory “news,” then followed by business which is the reason for the visit. With regards to the news portion, try to talk less and listen more as you don’t need to contribute to the news. With the business end, your reps need to understand the impact their product has on your dealership. Your relationship shouldn’t be a tug of war regarding orders and bookings as your reps need to be part of a solution, not a necessary evil.
It’s important to share your turns, your inventory levels that include obsolete and non-current stock, along with what your needs are. Be prepared to justify your positions about the direction you want to take regarding orders and bookings and you should be asking your reps to justify their order and booking requests if they don’t make sense to you. Compromise should always be possible.
A business relationship needs to be a two-way street of give and take with the common goal of profitability for all. Jamming a dealer with too much stock is short sighted as there is eventually a backlash encountered of weak future orders due to inventory and financial issues. At the same time, it doesn’t make sense to jump for the carrot by ordering more than you really need. The expense of ordering too much far outweighs the discounts originally provided. Working together towards the right balance that delivers profit and future growth is in everyone’s best interests.
Managing and striking a balance with your competition and suppliers goes a long way in maintaining harmony within your business and keeps you and your staff on the same page and going in the same direction. Managing outside influences is equally as important as managing your internal influences. You owe it to yourself and your business to focus on both.
Bruce Marcia is the director of Bruce Marcia and Associates, a retail management consulting firm that specializes in assisting and supporting dealerships in the RV/marine and powersports industries. As a recognized troubleshooter with over 30 years of experience in inventory finance, dealership general management and as a district manager for a major OEM, Bruce has had the unique opportunity to understand and learn from all three important fields that make these industries function.
Contact: bruce@bm-associates.com
Website: http://www.bm-associates.com
Phone: 587/577-6264
