A current buzz phrase in the retail business these days is wow factor. The gist of this concept is to have a product display or store presentation so eye-catching that customers are caught in head-slapping, gape-mouthed amazement.
The wow is usually inspired by the sheer spectacle of the display or by the number of products being presented. At House of Power, Glenn Sandler is shooting for a little bit of both.
About 350 units cover the 17,500 sq. ft. showroom. More than 300 helmets are displayed in P&A. Out front, palate racks hold about 125 ATVs.
"We want to be able to have everything in every color that a customer would want. We don't want to give any customer any reason to leave," says Sandler, the sole owner of the Palm Bay, Fla., Top 100 dealership. "Customers don't come back. They go elsewhere. And it's such an impulse business they might not buy then, but it takes them six months to come back. We believe having everything for everybody at all times.
"Our inventory costs might be a little more than everybody else's, but our sales are just growing and growing. I think our business philosophy is working," he adds.
Sandler's business philosophy is best defined by numbers, as in lots of inventory that's stocked deeply and sold and serviced by a healthy supply of employees at a shop with enough square footage to handle the sales. All of this results in more customers who help the cash register ring with greater frequency.
Quantifying the game comes naturally to the CPA-turned-motorcycle-dealer, who got into it via the car business. For Sandler there's a pure, and direct, correlation between inventory numbers and sales, a connection he claims to have proven many times over since buying the dealership in 2004.
There's also a simply understood relationship among having what the consumer wants, helping him or her buy it and good customer service.
The mainstream retail world lives and dies by volume and inventory turns. The big-box retail industry is based on equations of sales and square footage. With the motor cycle business becoming more of a pure retail operation, Sandler says dealers need to start playing the part. He's already making plans to double the size of his 39,000 sq. ft. dealership within the next couple of years.
"This business, because it's becoming so much a parts-and-accessories-and-apparel business is becoming more of a retail business. You have to be able to stock merchandise in order to be able to sell it. If you can have $300,000 in apparel and accessories on the floor, you'll sell in relation to that," Sandler says. "If you only have $75,000 on the floor, your sales will be less."
His store sells 350 helmets a month because it has 300 to 400 of them on the sales floor at any given time. And if a shop wants to sell $150,000 a month in P&A and apparel, it had better have $450,000 in inventory to do so, he adds.
Nod to Sam Walton
Sandler is fond of name-checking Wal-Mart when discussing his operation. He cites the world's largest retailer's inventory control process as an example that can be followed by even powersports retailers. After all, numbers equal choice, which equals happy customers.
"I've been a CPA since 1982 and I analyze everything and I look for ways to maximize everything. I believe that you have to have goals and staff and [you have to] inventory your store to get to those goals as opposed to the opposite approach," he says. don't want to hire people as I start growing. I hire the people, and then we grow into them."
House of Power employs about 65 people, who include around nine service techs and 20 sales staff. Sandler says he staffs his dealership so that there will always be someone around to help customers.
His first 20 days in business he hired 20 new salespeople and a general sales manager, opened up an F&I department, and made sure he had a dedicated service writer on staff.
All department managers are empowered to make business decisions to keep customers satisfied. Each has goodwill and policy budgets so "they can make a customer happy at any expense," Sandler says. With a store the size of House of Power, he can't be involved in every transaction, so he has to trust his managers and employees to make good based on the owner's business philosophy.
"As long as they operate within those guidelines we'll be fine," he notes.
In addition to a deep inventory, Sandler says he keeps customers happy by keeping long hours. The shop is open seven days a week — six of those days 8 a.m. to 8 p.m. because those are the hours that people shop. In fact, he says that about 50 percent of his business comes after 5 p.m.
"We're no different than a mall. It's not a car dealership and we're not a car business," he says. "I believe we are retailers. How can we possibly close at 5 and 6 o'clock on a weekday and have our customers come in without having to take off work?"
The business is changing and you have to change with it to survive, he says.
"What's happening is the enthusiast dealer is leaving. The businessman is coming in. The guy who says, 'We're closed Sunday and Monday, and we're open Tuesday through Friday because that's when we want to be open,'" he says, "those dealers are going to go away."
Sundays are almost as busy as Saturdays, something Sandler attributes to customers knowing they don't have to rush in on weekdays. The seventh day is also the day when most people haul out their dirtbikes and ATVs. "They wake up in the morning and need a sparkplug or they need a quart of oil or they need a tire change real quick," he says.
Add It Up
Sandler is quick to point out that all the numbers surrounding his dealership have increased since he purchased the business in 2004. House of Power's sales volume has jumped about 600 percent over the previous owner's annual numbers. In his first year in business, he sold about 2,000 units and has since increased that to about 2,500 annually. The dealership's service department now sells about 1,100 service-hours a month.
His used vehicle sales have jumped from near zero to more than 200 units a year. His P&A sales hit more than $250,000 a month.
To keep track of his sales volume and benchmarks, Sandler measures all sales metrics and compares them to national market share figures. He also pays attention to the awards and accolades his dealership gets from the manufacturers and outside organizations. All indicate how he's performing.
"We want to be the largest dealership on the East Coast of the United States. On the West Coast you have Chaparral and Bert's Mega Mall and all those good dealerships. There is nobody [like that on the] East Coast," he says. "We will be that dealership."