Dealer’s survival still depends largely upon controlling the showroom – April 24, 2006

When I conducted the motorcycle industry’s first 20 club meeting in 1981, times were tough. There was way too much product in the pipeline, interest rates were high on both retail and wholesale finance. Dealers across the country were closing their doors, as would 50 percent of the franchised dealers over the following two years. The theme of that meeting, and many more following, was survival.
There clearly was one positive signal coming from the nouns and numbers we compared. Some dealers were, in spite of everything, still making money. All were strong sales people themselves and if there was a common denominator it was the profitable dealers were already cashing in on the finance and insurance opportunities that were available. They were all controlling what they could control, dealing with customers one at a time.
Many 20 club members at the time followed their lead, or at least thought they did, by establishing an F&I process in their dealership. Some did it with our help, but most clearly got the cart before the horse. Finance and insurance income was the dividend you could reap if you truly were in control of your showroom. We all learned together that we had to first control the showroom. We could not let the customer, OEM, competing dealer or our sales people dictate how we operate.
Today, the business is more profitable than any of us could have imagined 25 years ago. The income opportunities and the product offerings have changed dramatically; the problems and challenges have remained the same. The marketplace is very competitive and the ratio of idiot dealers has remained the same.
I’m not writing this to hurt anyone’s feelings and have my entire adult life demonstrated a genuine compassion for the lot of the motorcycle retailer. That long-standing compassion earns me the right to be blunt, as only an inside member of the family can. When I say idiot dealer, I am referring to so many in our business who have always chosen to be ignorant of the forces that drive their lives.
When you write a “dealer advocate” column, you have to be willing to take on the sacred cows and not be afraid to take issue with anyone not acting in the interest of the dealers. So, your customers expect too much, your OEM supplier demands too much, your staff feel entitled to too much, and the idiot down the street is giving product away. So, given all of that, I should have lots of people to criticize on your behalf.
In 35 years in the industry, I have never been aware of a plot by a dealer or dealer group to screw the public, their staff, suppliers or the government. Every association manager I ever deal with inevitably comments on how straight thinking dealers are. Truly salt of the earth, golden rule kind of folks. You do right by everyone and assume that everyone will do right by you. So, if you are reading this, looking for me to be your advocate and single out the biggest problem you have, please look in the mirror.
There is clearly an opportunity for American motorcycle retailers to go to the next level. The “new thinking” is the same as it was 25 years ago. Control what you can control and make a priority out of profitability. Of course you need your customers and your OEM suppliers and you can not do it without a motivated staff. But accept that no one else is going to make a priority of your profitability. There was then, there are now and there will always be idiots down the street giving product away. Do not let them control how you do business.
Control the showroom, with enough well-directed sales people. Maintain a traffic log and track the results and follow up. If price is an issue with an individual customer, deal with it. Most customers are not price shoppers; never assume they are. I could fill the page with reasons dealers have gone broke, saying no to an OEM would not be on the list. No dealer ever went broke for what he/she didn’t buy. A retailer’s job is to buy wholesale merchandise that can be profitably sold at retail. If you have too much of the wrong stuff, please look in the mirror again.
Most dealers I know are very strong individuals, possessing character and true inner strength. Muster it to control your dealership and stop letting everyone else tell you how to run your business. I have always spoken out on your behalf and appreciate the platform that Powersports Business magazine has provided for me to continue to do so. Look for me to be your advocate, and please avoid being your own worst adversary.
The forces against you will always be there. You can stack the deck a little more in your favor with a strong state franchise law. Be an active member of your state motorcycle dealer association. If your association needs help, give us a call or check out our Web site, Edlemco.com, or call Karen Rasmussen, executive secretary, National Council of Dealer Associations. 340-719-8591.
The next level is the one you raise yourself to.
Cheers, Ed.