130 East Lincoln Avenue
Chariton, IA 50049
The Chipp Family
53,800-sq.-ft. dealership founded in 1973 in south-central Iowa. The previous dealership in nearby Russell burned to the ground in 1994. Carries Harley-Davidson, Buell, Yamaha, Kawasaki, Suzuki, and Extreme motorcycles; Kawasaki, Yamaha, Suzuki, Polaris, and Extreme ATVs; and Yamaha, Kawasaki, and Sea-Doo personal watercraft. Largest-selling segment is motorcycle. 32 employees including Bob, his sons Robbie, Gary, and Greg, daughters-in-law Amy, and Julie, and mother Jean (who’s the parts receiver).
Bob Chipp’s greatest concern is overproduction. “The manufacturers design programs to push product down our throats. It’s tough to keep up profitability. We’re established, and our debt load is at a minimum. We can withstand a 40% decrease in business, but a lot of dealers are running on a shoestring and if business drops 10%, we’ll see more fall.
“Polaris will put dealerships at existing car or farm-equipment dealerships. When I took on Yamaha, it was motorcycles and ATVs, and ATVs were the bread and butter. Now there’s a John Deere dealership group with four ATV-only Yamaha shops, and a farm-equipment group with seven ATV-only Polaris dealerships. They’re only in the gravy end.”
Chipp also is concerned about the influx of low-price units from Korea and Taiwan. “Once these dealerships go out of business, the customer wants to trade in the machine at our dealership. We have no market for it. They get angry because we won’t take their trade-in. But had they come to us, we would have sold them something we’d take back.”
Hot at C&C: the Harley-Davidson FLHTCU Ultra Classic dresser, new Road King Custom, and redesigned Sportster; the new Kawasaki 2000cc Vulcan cruiser; the Kawasaki Prairie 700 and the new Yamaha YZF 450 ATVs; and the Polaris ATV lineup, especially utility models. Most ATVs go to cattle farmers, with the balance to sport riders.
CUSTOMER BUYING TRENDS
Chipp says the dealership draws from as far south as Kansas City, Mo., “especially for Harley-Davidsons,” and all of Iowa.
“Customers who’ve moved to other states still buy from us, because we’ve treated them right.” To illustrate his broad customer base, Chipp notes that a recent ATV customer is an 88-year-old lady who still lives on her farm.
“We used to be able to read the market a lot better. There’s false advertising on the Internet and in enthusiast publications: advertising below dealer cost then adding large amounts for freight and setup. We’ve always sold Harley-Davidsons at MSRP; we didn’t gouge the customer when we had the chance.”
A trend that Chipp has spotted: “People wanting to buy a vehicle with no money down. The manufacturers created that market. We can get a lot of these customers through the credit process the first time, but the second time, they’ve had late payments and it’s almost impossible.”
Recently an Iowa Department of Natural Resources agent said to Chipp that he didn’t like watercraft or anybody who rode them. “This individual has since retired. And we’ve had some breakthroughs in ATV regulations, but some law-enforcement personnel don’t know these new laws and are still hassling riders. They haven’t closed any lakes to us.”
PARTS AND SERVICE
Parts includes four full-time, year-’round counterpeople, a parts receiver, and extra, part-time help in Summer. There are two separate parts counters: one for Harley-Davidson, one for imports/Polaris.
Also there’s a Harley-Davidson MotorClothes counter with two counterpeople. Chipp says he stocks “a lot” of Harley accessories; motocross apparel, boots, and helmets; “more street helmets than anybody in the state”; brand-name and no-name leathers and rainsuits for Japanese-brand motorcyclists; and ATV accessories like exhaust systems, tire-and-rim kits, and performance parts.
“We display four-wheelers with skid plates, bumpers, tires, wheels, and pipes. Customers can buy them ready to go, and we give them an allowance on their new, stock wheels.”
PROMOTIONAL HOME RUNS
In 2003 C&C held a 30th anniversary open house, and usually has a pre-Christmas open house with special prices on accessories and
parts for imports. The Chariton HOG Chapter meets at the dealership.
WORDS OF ADVICE
“I tell my people that if we just sell a piece of equipment, then we have failed,” notes Chipp. “But if we sell them the dealership and ourselves, they’ll want to come back. Out town has fewer than 5,000 people, yet we sell over 1,800 units per year. We have a reputation for honesty. My salesmen know that if they tell a lie to make a sale, they’re fired. We put everything on the table before the customer and let him make the choice. Then the customer can’t say, ‘I really didn’t want this, but he forced me into it.’”