Stand in the middle of your store. Now imagine that it’s grown to almost 58 times its size, draws a gazillion road-trippers annually and attracts potential employees from all over the country. From your brick-and-mortar artery also sprout veins in mail order, catalog and eBay operations, to boot.
A little overwhelming? Not for Chris and Tammy Jones. The owners of Westerville, Ohio’s Iron Pony had a hand in turning this scenario into reality over the course of close to 25 years. Iron Pony’s humble beginnings began in 1986, in a 2,200 sq. ft. space that would close in winter because, well, there wasn’t any business. Today, the 73-employee-strong mecca of parts, accessories and gear is open seven days a week.
The growth is staggering even when you consider where the store was in 2003, the last time we spoke with Iron Pony (“Aftermarket Supermarket,” February 2003): a budding Internet department, 26 employees and 22,000 sq. ft., with a standard layout. Since then, the store has adopted a store-within-a-megastore layout, similar to that of high-end department stores. “We consider ourselves a retailer more than a motorcycle accessory store,” Chris says. “So we wanted to copy what they do.” Initially, this format was a hard sell to a few of its distributors and manufacturers, which were dubious of such a massive change.
“We approached them and said, ‘Hey, we wanted to have an area in our store with just your products, just like how Nordstrom or Macy’s would have a Tommy Hilfiger or Vera Wang section in their stores,’” Chris says. “Not all of them understood the concept. Now you see more stores in our industry doing it. We were the first.”
The skeptics later jumped on board when they realized the format was working — if not thriving. For one, the boutique layout has been especially well-received by women, and this fact alone helps with the store’s overall bottom line.
“They could be riders themselves, or they could just be here with their sons or spouses. When some women come to the front door, they’re apprehensive, but then they peek in and realize that they know this format,” says general manager Alan Schatz. “The hesitation goes away, and the comfort level rises.” Salespeople are also assigned to each “mini-store” brand section. “Even though we’re a large-scale superstore, we want to be like a mom-and-pop,” Chris says. “We’ll have enough staff in each area to have a smaller-store feel.”
Another “small store” area within the showroom is the 31,000 sq. ft. space devoted to closeouts, which Tammy recently redesigned (see box page 18). “To get everything up and rearranged, that was a long project,” Tammy says. “But I think people like it now. It’s a lot easier for customers and for our staff to find things. Especially for mail order — we know exactly where to go.” COMBATING THEFT
Though each boutique area has an intimate feel, Iron Pony still has to manage problems like shoplifting on a large-scale basis. You may wonder how a megastore keeps track of every last bit of merchandise that comes in and leaves, whether by in-store, mail-order or Internet customer.
“It’s not easy,” Chris says, considering that almost all of Iron Pony’s merchandise is out in the open for customers to touch and try on. Daily inventories are a must. Then there’s the biannual inventories performed by outside companies. Iron Pony is also rolling out a computer program that will lay out the store in a more specific fashion to make it easier to locate specific merchandise.
To combat theft, every item is security-tagged, and the sales floor is monitored by a full-color, 64-camera system that records up to a month and a half’s worth of footage. Many of the cameras have high-powered zoom lenses, and can be controlled at managers’ desks and remotely.
“It helps a lot with shoplifting, but also stops counter scams, like when customers will say that they weren’t handed back the right amount of change,” Chris says. “Sometimes we’ll catch shoplifters on camera, and we’ll recognize them. We’ll call and ask, they’ll deny, and then we’ll say, ‘Would you like to come in and watch the tape?’ Then they come in and apologize.”
Each employee also has a unique background, things that Jones and Schatz look for when hiring. Currently, employees include a helmet salesperson who moonlights as an MSF instructor and a clothing saleswoman who leads the local chapter of Women on Wheels. But industry experience isn’t a requirement for all of its new hires.
“We sometimes find that the best employees are the ones we find at the mall,” Chris says. “If we’re at a mall store and we see someone hustling, we’ll give them a card.”
Equally important in hiring is the ‘gut feeling’ about whether someone will fit in with the rest of the team. Sometimes, all it takes is the initial 30 seconds of an informal interview to know whether a person is right for the team.
“It’s an intangible quality,” Schatz says. “Sometimes people are perfect on paper, but then I have a gut instinct that they wont fit in or aren’t right for us. And someone not good on paper we’ll call in, and they’ll turn out to be the best. The resume writing skills sometimes don’t translate to customer service skills.”
For the employees who are offered a place on the team, there are attractive incentive packages in place so they’re comfortable staying for the long run. Health, dental and vision insurance, a 401K with company matching, paid vacations, paid sick days, and discounts are part of the standard package here, attracting potential employees from all over the country. The store’s last hire came from Georgia.
“We get a lot of people specifically looking to move here and work here,” Schatz says. “I’ve been around the block a few times, and I’ve noticed a lot of motorcycle stores offer nothing more than a paycheck. The incentives make hiring easy for me because I have a package to pitch to potential employees.”
Another draw is the employee lounge, a comfy private room with flat-panel TVs and, the biggest draw, an ice machine. “Before we built it, we sent out a questionnaire, asking employees what they’d like to see in there. Five of our employees requested an ice machine. And it made sense — we have close to 80 employees, and our fridge runs out of ice,” Schatz says. “So the commercial ice maker has been a home run. What a simple, easy thing for us to fix.”
Employees also get birthday cards with cash bonuses, and annual awards at Iron Pony’s holiday party. There are awards for everything from Smile of the Year (the employee with the best attitude) to the Mike Butters 5th Gear Pinned award, a top award determined by a voting process and named after a 20-year veteran racer and employee.
“These things go a long way in making us feel like we have long-term careers in something special — not just jobs,” Schatz says. The perks, paired with a fun working environment, are reasons that Iron Pony’s turnover rate is low: Three of its employees have been there for 20 years, and many others have similar longevity stories. Sure, the perks can get expensive, but it’s a small price to pay for longevity and employee loyalty, things that are all-too-familiar problems in the powersports industry.
“It’s money well-spent,” Chris says. “I like to tell people that when we hire them, this may be the last job they’ll ever have.” Jones says. “If you like motorcycles, we are one of the few companies that can offer a lifetime job.”
Closeouts: Watch for the ‘one bad buy’
Few are brave enough to invest in closeouts, but Iron Pony has turned a pretty penny out of unwanted merchandise. Its closeout area is 31,000 sq. ft., recently redesigned and reorganized by co-owner Tammy Jones. The two-month project resulted in a bargain-hunter’s dream, with separate sections for men and women, all organized by size.
“We started running out of room,” Tammy says. “We had to move upward instead of wide, so we could stack almost to the ceiling.”
Last winter, there was so much closeout merchandise that Iron Pony had enough helmets in stock to outfit a football stadium – 64,000, to be exact.
“We can leverage our buying capacity and sales volume on merchandise that’s somewhat distressed,” says her husbandco-owner Chris Jones. “If [a manufacturer] needs to move 12 lbs. of helmets today, Iron Pony is a good option. With our retail, Internet and catalogs, we have the ability to move those quantities of products out fast, so we look at anything within the industry that’s a closeout on a daily basis.”
But closeouts aren’t for everyone. In fact, buying old merchandise is a huge risk.
“One bad buy can really sideways a company,” Chris says. “We’ve made some buys that we thought would be cream puffs, and they turned out to be the biggest turds. A buyout isn’t a great buy unless you have the capacity to move it in a fair amount of time. Even with a store our size, sometimes we get buys that take up too much space and time to maintain.”
The bottom line? Before you start buying up old merchandise, think about the worst-case scenario. If none of it sells, will you be able to bounce back? “One has to have the ability to absorb mistakes,” says general manager Alan Schatz.
This story originally appeared in the September 2010 issue of Dealernews.