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Apr. 21, 2008 – Industry Leaders Q&A with Bob Miller, the president of national distributor Helmet House

Bob Miller, the president of national distributor Helmet House, saw the company he helped start reach a significant milestone in 2006: $100 million in year-end sales. The California-based company continued its recent growth spurt in 2007, with its year-end revenue growth approaching 10 percent. Besides putting more emphasis on its growing apparel line, Helmet House has worked with its industry partners to provide retail merchandising and product sales training to its dealer network.

What’s the biggest challenge for the industry and what should be done about it?

The growth of the industry is one of the bigger factors. If your parents rode and your brother rode, then you’ll ride. But that’s not getting a lot of new people into the industry to expand the motorcycle market. The cost of motorcycles have gone up and there are safety issues. I think those are challenges. I think the OEMs have to gear their marketing and their advertising toward getting younger people in. There could be some significant growth in this market if we can transcend the transportation into it rather than the recreation. I think in Europe it’s more about transportation than recreation. There are some good opportunities right now where I think the market could lead itself with the gas issues and the insurance issues. I think it’s an opportunity for a different direction.
Along with that, you can educate the riders. As they do driver safety in school, they can do motorcycle safety in schools. If you go skiing, you’re going to wear proper equipment. If you’re going to ride a motorcycle, you should have more than sandals and cutoffs. There are abuses out there. Where riders are not educated and they don’t wear the proper gear and something does happen, then it’s not the fault of the motorcycle, it’s most likely the fault of the rider.
In the helmet market, it’s a lack of enforcing some of the products that are manufactured to the standards they need to be manufactured. The government, which puts out the statistics and (DOT) standards, needs to enforce that a little bit better so there are good products out on the market that can protect you.

What’s been the biggest challenge in your current position and how have you dealt with that?

When we first started, we were everything to everybody. We had tires and batteries and chain and anything we could get our hands on. Then I decided it’s probably not the best direction to be everything to everybody. I would rather do a lot with a little rather than a little with a lot; zero in and focus on specific products and be good at it. I think that’s really what we have done. With the helmet market, we have created over the years brand names, with HJC in particular. I created that back in 1985. I found the manufacturer and set out some guidelines. I’m not a manufacturer at that point. I’m a distributor. I know what the market needs; I know what they want. The manufacturer listened to what I said and we created a line of product that, with the other two distributors I appointed at the time, we kept No. 1 for over 20 years, which is kind of unheard of. That happened because the manufacturers were a company that listened. They manufactured product and said, ‘Here distributor, you sell it.’ It was and still is a pretty good marriage. Going along with apparel, we own our products. Tourmaster and Cortech is an area that we manufacture from cradle to grave, to concept to either success or failure. We’re more of a perfectionist company, to disgust almost. We really take the product — we create and design it — and try to make it the best possible product and most technological product there is on the market. As I tell a lot of the people that manufacture for me, I never ever change for price, I change for quality. I think that is one of the challenges you have when you’re in a market for buying and selling is to come up with products that there is a need for and then go out and market them.
Some of the bigger problems in the market are some of the people we sell to, the dealer network. Half of them are very aggressive and probably merchandising-oriented and want to succeed and are in the retail business, while the other ones make believe. You make a terrific product and you try to get it into the stores, but they don’t necessarily stock it in the proper quantities so they’re never going to sell it in the proper quantities. They choose to be in the retail business, they need to do that. Be prepared for a season. With the atmosphere that we have now in 2008 coming off somewhat a flat year in 2007, I think (dealers) have to be smarter and more aggressive and not be that concerned with the Internet and other components of the industry. They should be concerned with their business and how they can make that successful by all the means they use. They spend so much money on advertising — local papers, throwaways, mailings, radio and television — and then when somebody comes in, shame on them if they let them out without a product. They’ve already paid for them to come in there, don’t let them leave without something. And so many of them don’t do that. I’ve just seen that over the years. The stronger get stronger and the weaker get weaker, especially in times like this. They just have to be more aggressive. I try to explain to our sales force that this is a good time for the dealers to widen their product selection when they’re not selling as many motorcycles as they would like to. At least they could offer their consumer base more product that perhaps they haven’t seen before.

What’s the best advice you can give to others in the industry?

You have to stay focused. You have to do what you do well. As a company, we try to help the dealer in every way we can, by merchandising aids, by training their staff, by giving seminars. And have goals. To me, someone who doesn’t have a goal … why did they bother to wake up that day?
Hire good people. Don’t try to get the cheapest guy or girl available. Hire quality people and you’ll probably get some quality results.
Customer service: It’s the old story, everybody has the best customer service in the world. But a lot of people don’t go back to those same people. You’ve got to train the people to understand the products, you’ve got to give them answers and you have to have the products. Be consistent with how you do business and sometimes you have to pull the trigger on doing something new. You’re not going to expand by any multiples if you don’t try something new once in a while.
One of the things we pat ourselves on our back at Helmet House is we try not to make mistakes. Mistakes are very costly to everybody concerned. When we create a product and I have to buy 20,000 of them, the zipper better be right or I have 20,000 bad zippers and I don’t know what to do with them because I’m not going to push them out on the marketplace. You just have to be careful in how you do business, no matter what business you’re in. Have a target, go after it and do it in a respectful way.

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