SOME OF YOU MAY NOT CONSIDER JOHN PARHAM an appropriate person to represent Dealernews' August cover position, since he doesn't actually sell motorcycles.
It's true. Parham doesn't retail any vehicles. But you have to envy what this Iowa-based entrepreneur has done with his parts, garments and accessories business — inside his Anamosa, Iowa, store and elsewhere.
"Everyone thinks we're the mail-order guys — the guys who don't even have a store. Well, we do," Parham says. He defends his status as an independent retailer in a way that makes you think he has done it countless times before. "We're not franchised, but we have a very nice 5,500 sq. ft. retail store here that does a lot of business, attracts people from hundreds of miles around, and is helping transform Anamosa into a destination location."
And then there's the new Daytona store — boasting 150,000 sq. ft. of retail space. "Although we're still fine-tuning the inventory, I can't think of any other place in the southern United States that's going to have as much product on display as what we're going to have for three separate markets."
Parham entered the cycle industry as a 20-year-old in 1975, opening a parts, repair and pre-owned shop in his hometown of Anamosa with his high school biology teacher and fellow motorcycle enthusiast Don Brown (no relation to Dealernews senior research editor Don Brown). The partnership, D&J Cycle, lasted four years until, Parham says, "We split up because he got more into the Japanese streetbikes while I was moving toward the Harley side of the market."
In 1979, John and wife, Jill, established J. Parham Enterprises Inc. as a company that would focus solely on the Harley-Davidson parts and service business. They set up their business in a wood garage constructed atop a dirt floor.
Together with mechanic Ron Payne, the startup served the small local market around Anamosa. Parham began attending weekend swap meets and buying and selling new and used parts to drum up more business. Remember that back then, life wasn't easy for a Harley-oriented business. Harley-Davidson at that time was still on shaky ground, fewer people were riding, and service and repair were hitting a low period.
So Parham made a tactical move that would prove strategic: he decided to distribute a four-page flier promoting the various items J&P had for sale.
The tactic worked. By 1982 the business had grown large enough for Parham to quit his second job and devote all of his time to J&P, and by 1984 the company had grown enough for the business to find a new, larger location — the 2,000 sq. ft. front portion of a warehouse on U.S. Highway 151.
The four-page flier eventually morphed into the first J&P Cycles catalog, a 24-pager that Parham published in 1987, and Payne left the business when the company moved away from service work to concentrate on retail. The rest, as they say, is history.
Today J&P Cycles has annual sales approaching $70 million. It ships more than 2,500 orders worldwide every day. The business is headquartered in a compound of six buildings (195,000 sq. ft. of space) in Anamosa, in addition to the new permanent store in Florida and temporary stores in Sturgis and Daytona for the rallies. The company publishes four catalogs a year featuring nearly 2,500 pages of products. All of those products and more are posted on the company's website.
J&P Cycles' little retail operation in Anamosa does about $3.5 million a year in sales from walk-in customers. That's about 5 percent of the company's total business. The showroom is stocked floor to ceiling with parts, accessories, apparel and collectibles. The main room is dedicated to Harley-related merchandise, and a second room is devoted to metric cruisers and sportbikes. The second-floor mezzanine overlooking the show floor displays Parham's large collection of classic motorcycles.
And then, there's the warehouse.
"The biggest advantage J&P Cycles has over other retail showrooms is our warehouse," Parham says. "While the showroom isn't the largest space, we have the largest back room in the U.S. So while we may not have the space in the showroom to have everything on display, a customer armed with a catalog can have us duck back into the warehouse and pick it."
The showroom employees focus on the overall customer experience, according to J&P marketing coordinator Nicole Ridge. "It's up to us to make sure our service is as excellent as our product selection," she says. "And customers love it that our showroom staff knows how to wrench, as well. In fact, it's a daily occurrence to see staff members in the parking lot helping customers install parts on their bikes."
J&P staffers also fill their days by stocking product, updating displays and working to improve the retail presentation. "Hot new products, monthly specials and seasonal sellers are just a few of the displays you see constantly changing," Ridge says. "Decorating for the seasons and making sure the correct signage is up also give our displays that little extra something."
Built with an investment of about $5 million, the new Daytona store serves as an anchor in the Destination Daytona complex — a mini mall dedicated to motorcycles that was the brainchild of Bruce Rossmeyer, owner of 13 Harley-Davidson franchises. Rossmeyer owns the other anchor store, the 109,000 sq. ft. Daytona Harley-Davidson.
"This new store in Daytona is going to prove to be just fantastic — over-the-top," Parham says. "Bruce is a smart guy, and so when he told me he wanted to have his dealership and J&P as the anchor stores of a motorcycle retail mall, I think I got in on the ground floor of what I consider a real good opportunity."
Destination Daytona is actually located in nearby Ormond Beach. It's situated alongside Interstate 95 at a split — one direction leads to Orlando and one direction leads to Miami. About 120,000 vehicles pass the location each day.
J&P's Daytona store employs 60 people; some moved down from Iowa, some moved over from Parham's Florida-based call center, and the rest were recruited. "It's important for me to bring that customer service of the way we do business in Iowa to all of our other locations, whether in Daytona or Sturgis," Parham notes. "So what we did was kind of cross-train the new employees, bringing some of them up to Anamosa to work the open house, or to Sturgis to see how things run there," he says.
Parham has been exhibiting at motorcycle rallies in Daytona and Sturgis for 20 years. He now owns real estate in both towns, but uses the properties only during the motorcycle events. "In Daytona, we have a retail store on Main Street that we opened in 1991," he explains. "We use it twice a year for the two rallies and rent it out the remainder of the year.
"In Sturgis, we were in Mr. Al's Alley for five or six years, then shared part of a storefront with the museum, and then built an actual 12,000 sq. ft. brick-and-mortar store on Lazelle Street in 1997 just to use for the rally. Then four years ago, we set up a separate retail store on the property for our metric business."
J&P's retail operations in Sturgis encompass an entire city block. And when they're not used for the annual rally in August, Parham rents the buildings and parking area to an auto dealership. "We don't get a lot of revenue from it, but the principals are a husband-and-wife team who are good people, and take good care of it," he says.
J&P Cycles' growth is from its catalog business. Mail-order and Internet operations now account for about 95 percent of the company's annual sales. Here's how it started.
Parham ran three companies in the 1980s and '90s:
- J&P Promotions promoted motorcycle swap meets, bike shows, hill climbs, dirt track races, motorcycle rodeos, and the All Harley Drag Race Association;
- Zacharia Advertising and Publications produced a monthly newspaper called The Motorcycle Dispatch as well as programs for the promoted events; and
- Nostalgic Toy Creations produced die-cast motorcycles.
Parham used these business dealings — J&P Promotions, in particular — as a springboard for J&P Cycles' parts-and-accessories business.
"While we were making money at shows on the weekends, the weekdays were pretty slow, so the catalog helped even things out," Parham recalls. "Since we always promoted all of our events through direct mail — through door prizes and what-not — we already had a mailing list for the catalogs."
J&P's current catalog operation is supported by call centers in Anamosa and Daytona. The company's Harley catalog is nearly 1,200 pages thick. Its Metric Cruiser catalog, introduced in 2003, approaches 650 pages; a Vintage Harley-Davidson parts catalog, launched in 1999, is more than 340 pages; and a Sportbike catalog, new for 2007, has 100 pages filled with products.
"We added the sportbike products to our metric catalog in 2006," Parham says. "But after some analysis, we found that our sales of the sportbike stuff didn't even cover the cost of the paper it was printed on. We print 800,000 metric catalogs, and since we didn't need that many sportbike catalogs, we took that product and placed it in a separate 100-page catalog that we now can direct right to sportbike owners.
"The plan is to do with the sportbike market what we did with the Harley market."