Powersports Profitability: Sin City edition

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The main draw of the Specialty Equipment Market Association show is always the selection brands and new product highlights that dominate the annual Las Vegas mega-event. However, at this year’s event the primary motivation for powersports dealers to make the trip to Sin City took place across from the show at the Renaissance Hotel.

For more than two full days, powersports consulting experts Gart Sutton and Associates led the 2010 Powersports Dealer Update Workshops. Thanks to SEMA and GSA, dealer principles and managers were able to attend a variety of department-specific seminars, ask questions to industry experts, and get a feel for the industry as a whole by discussing the market with their peers and guest keynote speakers.

Just like previous Dealer Update Workshops, the focus for this year was in-depth seminars designed to maximize profitability in each department. Subjects included using menus to maximize sales at write-up, streamlining physical inventory, avoiding management overload, improving F&I performance and designing visual merchandising to maximize sales.

In order to give attending dealers the most value from each seminar, GSA began with the basics of a given subject but then built upon them by offering specific examples and techniques that have been proven in the field as well as giving dealers the opportunity to compare notes and strategies among themselves. For example, Jim Rasmus of Retail Design Associates led a discussion of store design that included the basics of product fronting and color blocking, but went further to show many photos and examples of each point. Another key topic discussed in several different departments was the use of menus to increase sales. Again, GSA provided specific examples of menu formats, ‘four squares’ and similar documents that provided a baseline for dealers to use the techniques presented.

Key to the strategy of GSA is keeping track of every aspect of a business through detailed reporting of profitability, efficiency and similar numbers. While this should be second nature to most business owners, GSA not only helps get dealers start using these metrics, but again provided in-depth training to make the most of these numbers. During his presentation, Rasmus challenged dealers to perform a sales-per-sq.-ft. analysis for each department to determine how much space the separate areas really deserve. GSA’s seminars illustrated this point time and time again, making it clear to attendees that it is simply not enough to know overall sales, but to know every aspect of why those sales figures are behaving as they are. GSA consultant Steve Jones asked attendees, “Look around; those empty chairs are folks who didn’t track numbers, didn’t use the tools available to them.”

However, the two-day conference wasn’t all lectures and doom and gloom. A State-of-the-Industry panel was held on the second day that made several positive points. According to the assembled panel — which included Richard Kimes of Helmet House, Jim Rasmus of RDA, Craig Cervenka of PSN, Philip McCaleb of Genuine Scooters, Troy Billen of McGraw Insurnace, Dean Kelly of Motorcycle Product News, Curtis Conner of ZiiOS Dealer Managemnet Software and of course, Gart Sutton — the powersports market is getting ready to rebound. A variety of data was shown that supported this theory, including current versus previous year numbers, but it was an opinion shared by nearly everyone present. It was agreed that ‘order taking’ is nearly done, and that dealerships that survive this recession can not count on bikes selling themselves anymore. But most importantly, GSA showed that it can give dealers the tools needed to beat the recession. Dealers utilizing GSA’s services were nearly fifty percent better off than the industry average, showing a drop of only 8 percent in new cycle sales versus MIC’s industry average drop of 15.3 percent.

While there certainly isn’t space to recount all the lessons available to dealers who attended GSA’s Powersports Dealer Update at this year’s SEMA show, the numbers show there were plenty of reasons why dealer principles and managers should plan on it for next year.