August 8, 2011 – Trailer manufacturer partners with GE Capital
August 16, 2011
Filed under Features
After searching for a major inventory financing program for its dealers since 2008, FLOE International has now partnered with GE Capital.
The snowmobile and ATV trailer manufacturer had been looking to reestablish a floor plan program since Textron Financial decided to discontinue its floor plan arrangements with any manufacturer Textron doesn’t own, which directly affected FLOE.
“It affected us and other much larger companies, such as Arctic Cat,” FLOE president Don VanderMey said. “We had this floor plan arrangement embedded within the fabric of our manufacturer-to-dealer programs.”
VanderMey finds it important that FLOE offers its dealers options to help with cash flow and inventory.
“The PAS (Pay As Sold) element of flooring allows them to have adequate inventory in stock, and pay for it as they sell it,” he said.
Along with the floor plan option, the Minnesota manufacturer launched its 2012 trailer program with free interest flooring until April 1.
“That allows a dealer to have the inventory they need to maximize sales and not have interest payments to carry it,” VanderMey explained. “This means a dealer can stock the trailers they anticipate selling over the next several months while not having the burden of interest payments.”
With the flooring program, dealers can stock a larger selection for the customers and save on shipping costs.
“Dealers will typically choose to have a better selection and deeper inventory,” VanderMey said. “That can save a lot of money on freight as opposed to ordering one or two trailers at a time, which comes with a significant logistic challenge and freight expense.”
The program helps dealerships regardless of their size, adds VanderMey.
“At FLOE, dealers that order five trailers are treated just as importantly as a dealer that orders 100,” he said. “Our focus is on helping dealers merchandise a trailer with features and benefits you just won’t find on the others.”
Those benefits get passed onto the customer, notes VanderMey.
“Consumers benefit by having better selection on-hand at the dealership so they can choose the absolute best product for their wants and needs.”
The recession caused FLOE to retool its entire expense structure as sales had declined more than 30 percent, VanderMey said.
“Making it even more difficult was the trend that each month was almost certain to be worse than the one before,” he said. “We didn’t know how low it could go. Since it bottomed out in 2009, we have seen steady sales increases well into the double digits last year and again this year.”
Part of that increase is because of the positive swing the snowmobile industry has taken during the past couple years. VanderMey is excited about three key metrics for North America: sled sales are up; miles ridden are up; and sled registrations are up.
“The snowmobile industry has been shown to go through historic cycles,” VanderMey said. “The cycles are fairly long, taking 10 or more years based on past trends. The trend right now is clearly going in a good direction. Once it gets revving up again, it tends to build momentum for many years. We feel we are seeing the beginning of a nice trend in the right direction.
“Nobody knows the future, but one thing is for sure, there’s nothing like snowmobiling. Anyone that rides knows why. You just can’t match the experience.”
Unfortunately, the ATV industry doesn’t have as positive outlook in the near future as the snowmobile industry does.
“ATVs are not on that same trend, and I hope that changes,” VanderMey said. “I think it will with the economy.”
While FLOE makes trailers for both ATVs and snowmobiles, its focus is on lightweight, non-corrosive aluminum snowmobile trailers, says VanderMey.
“Our trailers have always matched us up best with the snowmobile industry,” he said. “That’s the market that drives FLOE trailer sales more than any other.”