Bold Idea No. 8 – Taking advantage of lower, off-season preowned prices
July 9, 2010
Filed under Features
Location: Muskego, Wis.
Staff: Total 4 full-time employees plus part-time and intern staff
Sales: Used units only
Adrenaline Powersports, located in a rural area southwest of Milwaukee, is unlike most powersports dealerships in two ways.
First, it sells a diversity of action-sport items, from wakeboards to jet skis.
Secondly, its sales are growing. Even its unit sales.
One reason why: The dealership is taking advantage of off-season wholesale prices at auctions to build its business during the traditional busy times of the year.
Take the snowmobile season, a busy time for the Muskego, Wis., store that has area snowmobile trails nearby. In two weeks time last snow season, the dealership sold more sleds than its two competitors did during their entire winter. One reason? Adrenaline was selling sleds that had been purchased at auctions during the off season, meaning not only were they supplying used product, but used product at attractive prices.
“People just aren’t going out and spending the big dollars,” Jean Ringer, owner of Adrenaline Powersports, said, “but they still want to play, they still want to have a good time with their family.”
To get product for the area middle-class families, Adrenaline combs auctions during off seasons to build its supply. A past Powersports Business report that showcased National Powersports Auction data showed offseason purchase prices at the auction can be anywhere from 15 percent-24 percent lower than at peak times for a variety of vehicle segments.
“Oh even more,” Ringer said of the difference in prices between buying in offseason vs. in the traditional top-selling times. “For sure you’ll see that (price difference), but often even more.”
There are, of course, some challenges with buying off-season product and then holding on to it until the busy season arrives. Namely, financing. Ringer says the Adrenaline owners and an investor finance the off-season purchases.
“There are advantages other than just getting the prices lower,” Ringer said of buying at auction during off-seasons, noting she sold used PWC in the winter this year because she had product where so many other dealers simply did not.
Adrenaline also sells its off-season stock to dealers. In fact, Ringer recently sold three Harleys to an Indiana dealer and two PWC to an Illinois dealer.
To get that offseason stock, Ringer says the dealership plans well ahead of the particular season. For example, her son Rick started purchasing sleds at auction last month for the upcoming snowmobile season.
Plus, the family keeps close tabs on the wholesale market, attending auctions in nearby states and participating in other auctions much farther away — San Diego and Atlanta to name two — via the Internet.
“Wednesday is auction day here,” she said.