Jun. 2, 2008 – Location, location, location
June 2, 2008
Filed under Features
By Neil Pascale
P.J.’s Motorcycles is situated in an industrial area of Albuquerque that possesses an advantage and equally notable disadvantage.
The Ducati-Triumph dealership is located southwest from where the bulk of the residential population is and where the increase in the area’s housing is expected to occur in coming years.
On the other hand, it has easy access to a nearby highway and is on a route that leads riders to what one motorcycling Web site calls a “must see” area: the picturesque and curvy Sandia Crest road.
Whether owner P.J. LaMariana should move his prosperous dealership to a larger, more optimal site is one of the first issues he and Ducati North America looked at as part of The Italian Job, a more than year-long project seeking to increase dealer profitability.
The location question has been nagging at LaMariana for nearly two years, especially as he continues to hear from those within the industry that his already escalating sales could potentially climb higher with a better location. For the past five years, LaMariana and his staff have endured at a 5,000-square-feet location where the parts storage space is cramped and the office space is minimal. The confined space has not, however, affected sales. Total sales were roughly $5.5 million last year, up from $3 million just two years ago.
So with the growing business, why not move to a more visible spot that would potentially be in the thick of the new Albuquerque development?
“I haven’t felt that the business is solvent enough to move,” LaMariana said. “I want it to be really solid.
“In the beginning with the business, it was easy to take risks because there wasn’t much to lose. Now the business makes good money and there’s a lot to risk. It’s the risk that has been holding me back.”
Namely, LaMariana wanted to get his store’s daily business operations in better shape before considering the move. With information now in hand from a recent study funded from Ducati North America, the decision to move will be set aside for probably another five years or so. The study examined a host of factors, including motorcycle registration data locally and nationally during the past few years, where the city’s population growth will occur in future years as well as local competition. The study also proposed future spots for a possible move for the dealership.
However, in the end, the study found a move probably would not result in a significant amount of new business gained in terms of new unit sales.
The study also found the current dealership, although not in a prime location, is not situated far enough from its customer base to pose a huge challenge or tremendous inconvenience for consumers.
“All else being the same, you (the consumer) would want to go to the closest store because it’s more convenient to you,” said Mitch Phillips of Urban Sciences, the company that conducted the location study. “The thing here, is all else the same? And in this case, we’re finding maybe all else isn’t the same. He’s treating the customers better.”
That, coupled with LaMariana’s desire to get his dealership in better working order before committing to a new and more costly alternative, will mean the store will stay put, with some extensive remodeling.
“If everything was perfect with the business, I would have felt comfortable,” LaMariana said of finding a bigger location, “but I knew we really just didn’t have the reserve. Yeah we could make the money on a monthly basis, but what if things got really tight? What would it do for us? And that’s what kind of pulled me back.”
Those concerns did not hold LaMariana back from looking for a new location in the past two years. He has closely examined other options in Albuquerque, including leasing one site and buying another.
“There’s always been something that’s just of kind of pulled me back from it,” he said. “The bad part is it has been very expensive to engage in this stuff, with attorneys and inspections and all of these different things.”
The decision to remodel — LaMariana is looking at building a small addition on the current site to house his service department — has freed him to look more closely at his overall business operations.
“It’s where I put a lot of energy,” he said of his efforts at relocating the dealership, “and we only have so much time and energy we can give to anything and it was taking away from other things at the business.
“It’s a relief in the sense that it’s not my focus anymore. My focus is right on the immediate business.”