Keep Quality Brands On Your Store Shelves

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A large mail-order and Internet dealer experienced some of its biggest days in business this May. Naturally most Internet companies focus on bolt-on parts and wearables because they don't require a technician to install and tune. Does this mean customers are switching their purchasing habits from the brick-and-mortar stores to cyberspace? Let's look at the shift and figure out why it might be happening.

Have you recently told your P&A managers to:

  • keep shelves full?
  • decrease levels of P&A inventory and purchasing?
  • increase profit margin?
  • increase turnover rate?

If you have, you're not alone. But when you add up all of the above, you may have pushed your parts manager to dump premium and middle-priced brands and replace them with the cheapest no-name crap on the market. Is that really where you think your customers want to spend the little money they have?

Where do you spend your money in a recession — if you spend it at all? Do you buy cheap stuff frequently or respected quality products less often? Think about this. We are primarily in a recreational business and not a commodity one. Customers with any discretionary income at all in this recession still want recognized brands, but they want them at a better price. Cars are fun and functional for me (like bikes), but I really haven't changed my tastes to a Kia — I simply want a Ford or Toyota at a better price. Now there is plenty of overstock in the aftermarket powersports market from manufacturers and distributors so you might consider some top-quality close-outs in your P&A department rather than entry-level brands from Lo-dolla or Cheap-i-stan. Here's why.

Riders in this market didn't downgrade their expectations of performance even if your P&A department did. We are not riding less or lowering our annual mileage because of the recession, damn it! If you aren't stocking the major brands of parts and accessories that were so well known to the market last year, then we will seek out last year's models on the Internet for 20 to 50 percent off instead. You honestly need to re-think the dumbing-down of the brands and quality inside your store. Stop it, in fact!

Get back to basics and simply revise your outlook. Major brands are for sale everywhere. So keep your major brands in prominent places, but search out the quantity discounts wherever possible. Carry those discounts over to your customers with incentives to buy more.

DO...

  • Give one free item with purchase of two items.
  • Fill at least 66 percent of shelf space with premium items.
  • Advertise known brands at a discount.
  • Increase margins on premium products.

DON'T...

  • Carry over a 33 percent discount from the manufacturer
  • Fill shelf space with cheaper brands.
  • Advertise cheaper brands.
  • Lessen your margins on cheap stuff.

Be sure to keep your customers' sights high. Customers didn't lose their desire to have the best — they only lost their high-priced budgets. And since the manufacturers still have more inventory in the distribution pipeline than usual, all of their main products are now available at terrific prices, enabling you to make terrific margins on known brands like never before. You still need those entry-level no-name products, but don't make the mistake of filling your store with them.

Keep a stiff upper lip even if you have a high turnover rate with the cheaper stuff. You don't want to get the reputation in town of being the thrift store for motorcycle parts and accessories once we are on the other side of this recession.

Longtime columnist Eric Anderson is vice president of Scorpion Sports. Contact him at eric@scorpionusa.com or via editors@dealernews.com.