March 13, 2006 – Modernizing a successful dealership

Jim Wilson Jr., president of S&W powersports, describes himself as “just an old school, ‘Bama grad who loves to ride motorcycles and keep my customers happy.”
But his $8 million a year, 25,000-square foot dealership, located in Jasper, Ala., 35 miles outside of Birmingham, undermines the modest claims.
Sitting in his office, surrounded by photos of Coach Bear Bryant and Crimson Tide championship teams from the past, Jim Jr. describes his 61-year-old company.
“My grandfather started S&W as a hardware store, back in 1945. He took on Cushman motor scooters as a sideline in the late 1950s. Then he added Honda to the mix in 1964. After graduating from the University of Alabama in ’75, I wanted him to focus on the powersports business and downplay the hardware side. My philosophy was that if you love something, like I love motorcycles, you should put your heart and soul into selling them. But grandpa wasn’t as enthusiastic as I was.
“So I bought out my grandfather’s share of the business, changing it from a hammer and nails business, into one of the best multi-line dealers in Alabama.”
Since the 1970s, the store has added Yamaha, Polaris, Suzuki, Sea Doo, John Deere, Briggs & Stratton and Echo.
“And our sales have been on a steady climb ever since,” he said.
Last year, three generations of Wilsons — his father, 74-year-old Jim Sr., and son, 22- year-old Whit, also work at S&W — along with 14 full-time and two part-time people realized their best year ever — setting record-breaking revenue levels.
“We’re now the No. 1 dealer in Walker Country, Alabama,” said Jim Jr. “That’s almost as good as beating Auburn University, on their own turf, on a November Saturday!”
Competition and demand
Despite bragging rights to Walker County, Jim Jr. recognizes there’s room for improvement at his dealership.
“We’ve got three issues that I’d like to address over the next year, with the help of this Turning Technology into Sales and Profits program,” Jim Jr. says. “The first is to improve sales. Even though we set revenue records in 2005, our unit volume is flat, compared to 2004. And the competition is heating up.”
Down the street, a new Kawasaki dealer is opening up. Also, out-of-state discount houses are selling all the way into Walker County. These discounters are springing up all over the Southeastern United States, offering motorcycles, ATVs and PWCs at $200 to $400 under wholesale invoice, operating on 1 percent margins or less.
“The second issue that we need to work on over the next year is to get a better handle on our financial processes,” Jim Jr. said. “I’ve been managing this business with a checkbook since ’77. It works fine for me, but at our current size, this type of approach limits my dealership’s sales and profit growth.
“Most business decisions come from my 53-year-old gut. We need to computerize our operation, so that we get a better handle on what works, what doesn’t, what’s profitable and what’s not making us money.”
The service and parts departments also are a concern.
“I’ve got a great service manager and four terrific technicians,” said Jim Jr. “But we need to manage this area better — I just know that I’m losing money in this department.”
Much of the service business comes in waves before holidays and fishing and hunting openings. Because the shop can’t handle the overflow demand, they end up turning away customers.
“We want to get better. Not just at fixing or prepping a customer’s vehicle, but to anticipate customer problems before they happen,” said Jim Jr. “I think this will help smooth out the demand curve and make our customers happier.”
As for the parts department, profits could be improved there, too.
“We don’t rotate stock as efficiently as I’d like. We tend to order everything on an emergency, C.O.D. basis, when we’re out of any given item. That’s really expensive,” he said.
“And if you looked on the parts shelves, you’d see I’m sitting on a lot of dusty, slow-movers. It’d be great if we could pare down our on-hand inventory and focus on the fast movers, without affecting customer satisfaction.”
A number of Jim Jr.’s employees have expressed misgivings about participation with the Turning Technology into Sales and Profits program. “I just don’t think it’s going to work” is a common response.
But Jim Jr. is positive.
“In my 20s, I had fire in my belly to become one of the best and biggest powersports dealers in Alabama,” he said. “And I think we’ve reached that goal.
“Now, 40 years later, I’ve got a 22-year-old son who’s got his own fire and vision of what S&W should be 40 years down the road.”
That vision includes becoming one of the best dealers in the Southeastern United States, extending the business into Louisiana, Mississippi and Georgia.
“With the Turning Technology into Sales and Profit program, I hope to help him move closer to his dream,” Jim Jr. said.
“That’d be even better than ‘Bama beating Auburn.” psb

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