North End Cycle – Elkhart, IN – March 29, 2004
March 29, 2004
Filed under Power Profiles
2426 Cassopolis Street
Elkhart, IN 46514
24,000-sq.-ft. dealership founded in 1969; at present location since 1972. Carries full lines of Yamaha, Honda, Suzuki, Arctic Cat, and Polaris; Sea-Doo PWC, Ducati motorcycles, and E-Ton ATVs. Largest-selling segment is streetbike. “I used to be in partnership with my brother and I just bought him out,” says Williams. “Before that, my dad owned the dealership. So it has been in the family for 35 years, and we try to run it the same as we always have.” 30 employees.
Williams’s greatest concern is profitability. “Dealers need to realize you have to make money, and not drive the value of the bikes right into the ground. Don’t give them away.” He has seen dealerships open up, sell a lot of units, then sell the business — which goes under a year later. “It’s a scam.”
Hot-selling streetbikes include all cruisers and the Yamaha R6 sportbike. In ATVs, best-sellers include the Yamaha Grizzly and Kodiak, and the entire Honda lineup. “In accessories, we sell a lot of aftermarket items for cruisers — pipes, backrests, windshields, etc.”
CUSTOMER BUYING TRENDS
North End has a wide variety of customers, age 20 to 60, with cruiser customers averaging in their mid- to late-30s. Williams says more people today are financing than ever before, and accessorizing their bikes at time of vehicle sale. “The market is getting so tough because dealers just want to give stuff away. Dealers don’t want to make money — it’s pathetic. That’s the hardest thing to battle.”
Does North End stick to MSRP? “The best that we can,” says Williams. “But people are being misled by ads in the vehicle sales publications like The Auto Trader. Dealers advertise vehicles for $2,000 less than we paid for them wholesale — but then add $3,000 for ‘freight.’ It seems like the customers are getting more educated and fed up with this. We tell them, ‘Here’s our out-the-door price. If you go to another dealership and it’s not that, come back.” Are customers overall bargain-shopping more? “Oh, yes.”
Williams states that there are no anti-powersports issues in his portion of Indiana right now.
PARTS AND SERVICE
North End Cycle has nine service technicians and nine parts salespeople. “All our service techs are certified,” notes Williams. He adds that he does not assign specific techs to specific brands — all technicians work on everything.
PROMOTIONAL HOME RUNS
North End holds open houses in the spring and the fall. “We advertise on billboards, the radio, and a little bit on TV,” says Williams. “We don’t do much with the print vehicle sales papers, just because we don’t need to — essentially, other dealers advertise for us.” Clubs that meet at the dealership include those devoted to Gold Wing riders (which holds bake sales in the
Spring and the Fall), and a new Yamaha Road Star group that wants to meet in the Summer.
WORDS OF ADVICE
“You have to make money,” advises Williams. “You don’t need to get rich off one sale, but you have to make more than a 5% profit so you can stay in business. Some dealers are averaging 3% to 5% in gross profit. You need to be at a 15% to 17% gross to make it work. You hear that ‘More is better,’ but not when it comes to the number of vehicles sold. I’d rather sell 2,000 units and make X number of dollars than sell 5,000 units to make that same amount — all the while making customers mad because you can’t service their vehicles.” psb