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Northwood Equipment

April 19, 2004
Filed under Features

CONTACT
1120 2nd Street NW
Aitkin, MN 56431
218/927-2140
www.northwoodequpment.com

OWNERS
A Partnership

BUSINESS PROFILE
20,000-sq.-ft. dealership founded at the current location in 1977. Carries snowmobiles and ATVs from Arctic-Cat and Bombardier, plus John Deere products. The largest-selling segment used to be snowmobile (“When we got snow,” says dealer principal Gary Miller), but has been ATV for the last few years. 13 employees.

GREATEST CONCERN
“As dealers are being force-fed product from the manufacturers who are trying to keep numbers up, we’re seeing a significant decline in dealership profitability,” says Miller. “Dealerships are going to start bowing out, saying, ‘I can’t make the money with you guys — sorry.’ That’s going to hurt down the road from the customer standpoint when they need service and parts for these vehicles. And when people are out of the market, what happens to the resale value of this product? There’s getting to be a lot of units out there, especially snowmobiles. The ATV market’s filling up, too. At one time a customer wasn’t concerned about the value of what’s sitting in their shed.”
WHAT’S HOT?
Hot at Northwood: The Ski-Doo Rev and the Arctic Cat Firecat, with the 600cc the most popular and the 800cc not far behind. “A significant number of people are changing over to the Ski-Doo Rev because they like that position-forward ride,” says Miller, likening it to a dirtbike feel. “That ride is significantly different in our industry and seems to be a real bright spot for Ski-Doo. Our consumers are accepting it very well — and obviously the other manufacturers are taking a good look at it, because we’ve heard of some model changes to accommodate the need that’s built up. Other people are changing to the Firecat lineup because of the torque and speed. In light of the brand-switching, our customers go for a non-OEM clothing line. Both FX and Castle have done a good job in promoting their lines — and they have good-quality clothing.”

CUSTOMER BUYING TRENDS|
Northwood is just east of the Brainerd Lakes recreation area in Minnesota. “Our customers cover a pretty wide spectrum,” says Miller. “The guys buying Revs are typically 20 to 35 years old. We also have a retirement community here. It circles around — some of the retired people have sold their lake property to the younger group.”

NTI-POWERSPORTS ISSUES
Miller says that a lot of counties in Minnesota are banning snowmobiles from riding in ditches and township roads. “It’s limiting our ability to use these vehicles. We do not have the park systems like California does. If customers can’t ride them anywhere, all of a sudden sales start to drop, and we’re in trouble. More and more counties are getting involved in closures. ATVAM [ATV Association of Minnesota] is an advocate for the ATV rider. This group is out there promoting parks, public lands, and trail production.”

PARTS AND SERVICE
Northwood has three employees in the parts department, and six in service, although they are cross-trained; “It depends where the needs are,” says Miller. “The techs all go through training and keep certified with the factories. The factories are starting to do more on-line training to reduce the cost of sending people out. Ski-Doo is more onboard with that, while for Arctic Cat we still have to send them to schools for hands-on training in Thief River Falls, Minnesota.”

PROMOTIONAL HOME RUNS
Miller says the dealership does “a lot” of advertising. “We use newspapers, radio, and magazines. We’re on trail maps so people who come into the area can find us for service and parts. I sometimes think we spend too much on advertising, but it’s an intangible expenditure so we really don’t know.”

WORDS OF ADVICE
“Since 1977, we’ve built our business on service,” says Miller. “We pride ourselves on being the place to get your machine fixed —and fixed right the first time. That’s all we really sell: Service. We know our customers can buy the same product anywhere else. The only thing they can’t get anywhere else — what we truly own — is our service. If you provide service to your clientele, they will support you and you’ll be able to make it through the tough years.”

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