OPINION – Passion and profitability: both are key to the industry

We are a business of enthusiasts. We have to be, our product would not make it on logic alone. It starts with a passion that transcends inhibition and is driven by a need for exhilaration. What we sell is expensive and potentially dangerous. It is not suited for the majority of the public, and therein lies it’s primarily appeal.
From the beginning, long before it could be called a “business,” enthusiast riders endeavored to cash in on their passion, making a living at what they loved. They provided the foundation for what is today a viable, megabillion dollar industry, worldwide. What we do should not be confused with the basic transportation that has always been the primary means of personal transport in emerging economies. As soon as those folks are able, they will have four wheels, be encased in an air-conditioned comfort, with Bose speakers blaring their sound of choice. The powersport business is about just that, powersports.
When I interviewed in 1969 for a position as district manager for U.S. Suzuki, I was told they were looking for people to help the existing dealers be more sophisticated, and to seek out business people that would take the retail segment to a new level. I would imagine that a candidate for the job I held 37 years ago would likely be told the same today.
It is wonderful to view something in the fullness of time. What has emerged is a blend of the raw passion that started it all and the acquired acumen to run what is a complex, multidimensional and multidisciplined business.
Beginning in the 1970s there was great resentment to those of us perceived to be in it for just the money. The enthusiast dealers had promoted the product, sometimes for generations, at the grassroots level. They had staged the “Hare and Hound,” hill climb and trials events that are now relegated to industry lore. They formed and led riding clubs long before the Motor Company promoted “Hog Chapters.” “In it for the money” was an insult, reserved for the perceived Carpet Baggers out to corrupt a purest pursuit, by selling motorcycles to anybody.
The business people did come. Many left, discouraged by the demands of a seasonal business, and a wholesale distribution process that was built to accommodate enthusiast mom and pop operators. And was, to say the least, not forthcoming when it came to providing timely and accurate information to retail dealers. Those who stayed learned to adapt to the challenges presented and to become true students of the business. We identified and learned how to cash in on the peripheral opportunities and focus on developing the means to give our people the needed skills.
The first Lemco “20” club was started in 1981, after I sold the retail business I had started in 1972. No apology was made for the purpose. It was all about making a priority of profitability. We established that we could collect a documentary fee for the services rendered. That we could charge for freight and assembly. We established that we could sell a number of aftermarket products at the time of sale. And, we ultimately established that customers would be willing to pre pay for a scheduled maintenance program that was very profitable and tied him to the dealership, if presented in a way that made sense for the customer. These “Lemco Dealers” were held in suspicion, if not disdain, by a large segment of the retail, wholesale and OEM levels of the industry. The need to address the interests of the customers, staff, wholesale suppliers and OEMs was always recognized as long as profitability was the first priority. This prioritization was new thinking and not well accepted by those who thought they were the primary reason for the existence of the dealership.
Little by little the lessons learned filtered out to the entire industry. The enthusiast dealers, who never did make a priority of profit, have gleaned enough from the lessons learned to remain a bastion for the hard-core enthusiasts they seek to serve. OEMs and others did take note of the learning process and now there are many 20 club options for dealers. It took a while, but the whole industry seems to have learned that viable retail dealers who focus on profitability benefit everyone, even those who have a different priority.
Today we have a true blend of business philosophies co-existing throughout the powersport business. It has been very interesting for me to note that what goes around comes around when it comes to dealers entering the business. Today, as I offer consulting services to people wanting to sell and buy motorcycle dealerships, here is what I find: dealers with well-run dealerships are seeking to cash in on their knowledge and their systems by acquiring additional dealerships. The new wave of dealers, while far more affluent than their predecessors, are driven primarily by the same enthusiasm and passion that started it all. Passion and profitability are both served with informed enthusiasm.
NOT WHAT YOU SAID LAST TIME
I had a chance to meet with several old friends at the Powersports BusinessXchange held recently. As we talked about the business and conditions that existed today and what needed to be done to adjust, it was consistently pointed out that I was contradicting what had been held as gospel in the past. Dealers have many sources of information available to them today. Warmed-over dictum and general truisms from the past are not what you need to hear. And, current and effective new solutions will, in many cases, not be what your staff wants to hear. They are always more comfortable with the old way.
The market remains very good and the basic enthusiasm that drives the sales is still there. But the customers have more resources. If you continue to serve them as you have in the past, the profits we learned how to make will be just that, in the past. psb
Ed Lemco has been involved with the powersports industry for more than 30 years. Lemco, the former owner of Lemco Management Group, is the founder and executive director of the National Council of Motorcycle Dealer Associations. Lemco currently operates a call center for dealers in St Croix.