The powersports industry has always been a tough business to make money in. It takes dedication, commitment, and a varied skill set to be successful in this industry.
When looking at the industry data that Spader collects, I find that large powersports dealerships are outperforming smaller stores by a wide margin (net profitability). In prior articles I’ve talked about the reasons why this happens, so I won’t go down that road again, but it is clear that while it’s not easier to be big (typically multi-brand), it is more profitable.
Talking to dealers across the country, there are definitely a lot of the smaller dealers who would like to sell their businesses and retire, the problem is a severe shortage of buyers. With the low returns offered in this industry, there are lots of safer investment choices.
I like the personality of small stores, but ultimately this country has more dealers than we need. With the shortage of buyers, what is going to be the catalyst to reduce the dealer count? Will the OEM’s settle for a lower dealer count? How can OEMs and dealers work together to find a middle ground that works for all?
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