Dec. 24, 2007 – A candidate for the dummy bullet philosophy
December 24, 2007
Filed under Columns
SCOTTSDALE, Ariz. — Montana dealer principal Cliff Gullett has a theory for improving life that is probably equal parts sarcasm, honest-to-God belief and good ole Wild West philosophy.
It’s called the “dummy bullet” theory, and it goes something like this: To improve our way of life, give each person one bullet per day that can be then fired at a dummy.
When Gullett shared this bit of sarcasm recently at Powersports Business Congress, our two-day business event for dealers and industry suppliers, I asked if this theory explained Montana’s low population.
Because I value his sense of humor and business sense, I won’t share his reply, nor his thoughts concerning how that theory should be tweaked in regard to the Washington, D.C. population. (We would hate for an independent party to sweep Gullett away from his Yamaha dealership and into a run for the White House.)
I do, however, like the philosophy enough to use my own daily allotment of dummy bullets, albeit in a strictly literal way, on a practice that is handicapping the industry. That practice: the decision by new entrant OEMs and distributors to not report their retail sales volume.
The reason why this is not happening is fairly easy to discern, and discussions with executives of such companies have confirmed my suspicions. The reasons why they don’t provide retail sales numbers include competitive concerns, cost factors and in some instances, staffing issues.
These are all valid reasons, but none of them outweigh the simple business truism that should be stapled to each and every one of our collective thoughts: Knowledge is power. Without good information, we as business leaders must make vital decisions based on instinct and promises. Well who in their right mind wants to do that? Especially when revenue is in many cases shrinking and expenses, like health care and transportation, are increasing. In other words, there is not much room for error in the current business climate.
And yet when Dealer Expo gets here in mere weeks there will be a number of manufacturers/distributors — some of whom have established longevity and the resulting respect inherent in that accomplishment — asking dealers to take on additional lines of scooters. But if dealers have done their homework, they will know the only reported scooter numbers show stagnant sales.
Translation: Even though gas prices remain elevated, the interest in such gas-efficient machines appears to be lukewarm at best. And you want me, the dealer, to think about taking a second line? Is there a punch line to this joke?
But back up a moment and consider that same conversation if the dealer had a better sense of what the actual market must be. With all of the different new entrant manufacturers/distributors selling scooters, is it hard to believe the total number of scooters sold last year (54,000-plus) as reported by the MIC is only half the true market? Or even a third? I don’t think that’s a big or particularly reckless leap to take.
But should a dealer take such a leap in this challenging time without real data to back it up? If I said yes, I might as well tape a target to my forehead.
There has to be consideration by new-entrant manufacturers about how to create a more accurate picture of the scooter industry. It might be that what MIC does for its largest manufacturer members — a monthly retail report — is not financially possible for some of its smaller partners. Perhaps the retail sales report should be quarterly or biannually instead of monthly.
Powersports Business felt so strong about the need for better industry data that we contacted several new-entrant manufacturers and offered to provide a composite report of their sales. In other words, data that would show the sales of all the companies, without singling out any one manufacturer in order to keep competitive concerns at bay. We didn’t hear back from one of them.
Perhaps then we’re not the best vehicle to make this initiative happen. Perhaps it’s best left to the MIC or another industry group. The “how” this happens isn’t as immediately important as the “why” this needs to happen.
We as an industry are looking very closely at dealerships and asking them — with good reason — to improve their retail practices, whether it’s better merchandising or better sales practices. But we also need to provide them with as much relevant industry data as possible to ensure intelligent decisions on their part.
Otherwise, we’re just shooting ourselves in the foot.
Neil Pascale is editor-in-chief of Powersports Business. He can be reached at email@example.com. psb