Almost every week I have a meeting with a group of Powersports, Marine, or RV dealers. Prior to those meetings, I set the ground rules. About 4 months ago I added a new rule to my meeting checklist: dealers can talk about anything they want to discuss, with the exception of unit inventory shortages. Spending time talking about the product we don’t have or cannot obtain is wasting time, and part of my job is ensuring that dealers make productive use of their time (and thus my time).
There is a pattern that comes up time and time again. Top dealers are proactive, low performers are reactive. When the pandemic first hit, high performers developed an action plan, monitored conditions on the ground, adjusted where needed, and over the last year they have killed it!
Key things these top dealers have done:
- As unit inventory shortages looked like they could be a possibility, they submitted orders for additional product.
- Increased new and used margins as the product selection tightened up.
- Worked hard to obtain additional used inventory.
- Relied more on their fixed operations infrastructure (parts and service) to carry an increasing share of the dealership’s expense load.
- Bulked up on fast moving parts and accessories to counter escalating backorder situations.
- Adjusted advertising expenditures to focus on the product selection they do have.
- Trained staff to ask for pre-order commitments.
Key things the bottom dealers have done, and continue to do:
- Ran out of inventory, and when it was all gone they complained about not being able to order any more.
- Continued to cheap sell the limited amount of inventory they did have, until it was all gone.
- Spend large amounts of time dealing with service heaters (upset customers) because they don’t have the parts to fix their machines, nor the technicians to work on them.
- Are still spending money on ads for 2 year old machines that they no longer have.
- Tell customers who come in the door looking for product that “we are sold out, and have no idea when we will get any more”. In most cases, they don’t even collect the customer’s contact information.
Spader Business Management, the company I facilitate 20 Groups for, has the reputation of being a little old fashioned. We push dealers to build annual budgets and then we measure how they perform against those plans. This old-school form of managing a dealership has proven itself to be great for when times are tough. Recently, it’s also shown significant benefits for times when business dramatically exceeds expectations. It’s been great to watch dealers proactively comparing performance to plan, and adjusting way ahead of the competition. Adjusting margins, orders, staffing, and all the other things that separate the high performers from the low performers. All the actions leading to the high performers doubling the net (as a %) of the low performers.
If you are running out of inventory, or are out, then you have missed that boat (perfect metaphor for marine dealers). Spending time complaining about not having product to to sell isn’t going to achieve anything. Use your time wisely, and figure out how to take advantage of the opportunities that do exist. You’ve sold a ton of new and used vehicles, figure out how to take care of those customers after the sale. Have your finance department call customers to take a second chance at extended service contracts and maintenance plans. Call customers to see if anyone has a vehicle they aren’t using and are willing to sell it. There’s lots of productive things you should be doing with your time, complaining is not one of them.
Better luck next time.
#Marine #RV #Powersports #Inventory #SupplyChain #AfterSales