Distributor Update: Western Power Sports Braces for Economic Upswing

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Western Power Sports president Craig Shoemaker says that despite the troubling economy’s impact on big-ticket sales, an increase in sales of maintenance items, an expanded sales force and quicker shipping times should have the distributor in the black for the year.

“We’re up. Not up as high as we’d like to be, but probably knowing what I know today we’re up more than maybe expected,” said Shoemaker in an interview at the company’s national sales meeting in Boise, Idaho. “We’ll finish our year-end in September and I’m pretty sure we’ll finish the year up enough to be happy.”

One of the main factors in the distributor’s sales performance for the year, a new 144,000 sq. ft. warehouse in Elizabethtown, Pa., has allowed the company to improve its reach into the Northeast. The company’s sales reps are better able to compete now that shipping has been cut from two or three days to overnight service, Shoemaker said. Additionally, the company can stock and ship more snow products to the region than it could before.

The warehouse was a main part of the company’s nationwide expansion efforts (it already has locations in Idaho, California and Tennessee) that also includes hiring additional sales reps, regional sales managers, product managers and telemarketing employees. WPS employees about 350 workers, of them, including 95 reps.

The company is also continuing to add to its product mix of about 70,000 part numbers. WPS recently picked up Two Brothers exhausts and the Omega neck brace. In a surprise announcement to its reps during the meeting last month, it said it had taken on Spidi apparel and the Asterisk knee brace.

Dealerwise, Shoemaker said WPS is still looking at new territory to capture — about 25 percent of the country he estimates — but won’t do so unless it has the infrastructure in place to properly service these dealers. “I would love to do business with them all, but If I can’t take care of them halfway decent [I wont],” he said. “If I don’t have anybody to walk in there every so often to service them, and I’m four days away in shipping ... I don’t want to do it. So we just stay away from them until we’re ready to do it right. “We did a lot of that in the Northeast. We just stayed away from it until we could do it right.”

He also wants to make sure his dealer network is healthy, he added. This means making sure they’re not back-stocked with products and that their inventory is working for them, not against them, Shoemaker said.

In reflection of the drop in new-unit sales, WPS has also seen sales drops for items such as exhaust systems and expensive apparel. However, as repeated by many in the industry right now, people may have stopped buying, but they haven’t stopped riding. As such, sales of tires, oil and batteries are up. Shoemaker added that many consumers are also looking for more value-minded products.

“Finances are making some of the higher-dollar products a little tougher. That guy who was making “$33,000 a year and buying a bike and $600 helmet and $500 jacket, I think they’re finding out a $150 helmet isn’t that much different and that a $200 jacket is different, but not that much different,” Shoemaker said. “I think when they can afford it they’re going to go back and buy that 500 jacket.”

Shoemaker predicts that the general economy will come back slowly — on the back of the housing market — and that the powersports market will follow, eventually coming back even faster to hit everybody in the business like a rock. He predicts that the company’s past five years of growth have helped prepare it for when things turn around.

“I think we’re in the position that when the market does come back we’re sitting on a rocket ship,” he said. “That’s when the challenge really comes.”

This article is from the October 2009 issue of Dealernews.