Tight Market Won't Limit Parts

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Some U.S. powersports dealers shortchange their sales opportunities by stocking too conservatively in today's tight, competitive environment. So says Greg Blackwell, vice president of marketing at Parts Unlimited/Drag Specialties.

Blackwell encourages dealers to consider variety and visual impact in their showrooms when they make stock plans. "When I hear a dealer say, 'Nobody is coming in,' and then I look around the store and I don't see any product, I wonder," he says.

Janesville, Wis.-based Parts/Drag has one of the largest display areas at the Dealer Expo again this year, surrounded by booths of many of its top suppliers. Blackwell says there are many new products being unveiled at Indy, and dealers need to see everything they can and stock as much as they can.

"Make sure you get what you need," he says. "Things that people with money in their pocket want to buy. Don't let them walk out without buying."

Look to successful retailers such as Target and Nordstrom's, he suggests. "When you walk into Target to buy a shirt, you'll find 25 shirts in one size and 25 different shirts in another size. I wonder to myself how many dealers have only one T-shirt on display?"

When dealers cut back on advertising and other promotions and then reduce their product purchases, failure can become a self-fulfilling prophecy, he says. If a customer can't find what they want in a showroom, often they'll go online to get it rather than settle for whatever is available locally.

Harley-Davidson dealers are successful, Blackwell says, because when you walk in, "there is stuff you can buy."

"Dealers who do stock product aren't going hog wild; they're being cautious, but they're not dropping advertising," he says. They continue to solicit customers and they have product available when shoppers visit the showroom.

Parts/Drag opens more than 1,000 new dealership accounts annually. The distributor services about 12,000 dealers internationally, Blackwell says.

Interestingly, Blackwell says he doesn't anticipate the double-digit annual revenue growth in 2007 that Parts/Drag has enjoyed in recent years.

"We're growing and we plan to grow," Blackwell says, "but right now you have to look at taking business from your competitors if you want to grow. I just think a lot of dealers — everyone in the industry — has to think that way for 2007. The business will be there, but it won't be easy to get."

The company has tightened its operation this year to meet market conditions, but still plans to expand internationally. The company has purchased land in Germany for a European facility, he says, after researching the market for several years. — Joe Delmont