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An online quandary: When to add more staff?

April 22, 2008
Filed under Uncategorized

By Karin Gelschus
Associate Editor
Dealers are struggling with where to draw the line regarding Internet staffing possibilities.
Rising online activity is generating more sales opportunities but a slow economy and tighter budgets aren’t giving dealers much room to work with.
For now, a recent Powersports Business survey revealed more than half of dealers are placing Web responsibilities on existing personnel, while 45.5 percent of dealers have online sales specialists.
Dealers on both sides of the survey, though, are having mixed results, leaving questions unanswered as to whether the time and money spent on an online sales staff is worth it.
Mt. Holly Powersports in Lumberton, N.J., added an online sales position last year, which has benefited business. Owner Steve Hyde says the online sales person does a lot of sales through eBay, which moves a lot of obscure merchandise out of the dealership.
“The more obscure, the better for eBay,” he said. “We do better with hard parts that are incredibly specific like a CEI for a 1982 YZ60, which I remember someone buying from us in New Zealand. The likelihood of someone coming in here and asking for that is zilch. We used to throw away stuff like that.”
Hyde adds they do about $1,000 a week in online sales, but it’s all stuff that’s been written off. “The next step would be the trash can for this merchandise,” he said. “In the old days, it didn’t have value; we couldn’t sell it. It’s worth something on the Internet, and there are plenty of buyers overseas.”
Craig Freeze, owner of Kearney Yamaha in Kearney, Neb., agrees the Internet is a good way to remove obsolete parts from his shop, but the dealership cut its online sales position because it wasn’t worth the effort and costs.
“We were actually going backwards by the time we paid all the fees and everything,” he said. “We were going the wrong direction with it. Our parts manager is still doing that (selling parts) through our Web site and our online catalogues, but we’re not doing anything as far as listing them anywhere else on the Internet anymore.”
Freeze says his dealership experimented with a few different things online, such as auctions, selling vehicles and selling parts through eBay for about a year. But in the end, they decided it was more important to focus on the customers in the actual dealership.
“The way I look at it is other dealers are complaining to me that their sales are down, and for the first three months of the year, mine are up 22 percent,” Freeze said. “Everybody is wanting to focus on the Internet stuff, but if we just take care of the people coming in the store, I think we would be ahead of the ballgame.
“They all might be right though, and I might be wrong. You don’t know.”
Justifying the time and money is a concern for Michael Battaglia, IT and sales manager for Renaissance Motorcycle, Tucson, Ariz. He has handled the online business for about two years, but it’s barely even part-time because of the numerous other hats he wears at the dealership.
“If we’re lucky, I put in a couple hours a week. I’d like to do more, I just don’t have time,” he said, adding it can be difficult to decide what to invest in. “There will be a lot of money wasted until we figure the Internet out. You can throw a lot of money at it and not get a lot of results. It is the future and you need to embrace it, but how much money do you want to spend at any given time?”
That answer is zero for Ford Sports in Cape Girardeau, Mont. IT manager Steve Break says it’s a cost the dealership doesn’t want to spend.
“We have talked about it, and it’s probably not profitable,” he said. “We have decided not to sell anything online and just show our stuff.”
Hyde of Mt. Holly Powersports has observed first hand that the Internet can be profitable if worked into existing staff’s responsibilities.
“The parts manager makes the call if he’s going to do an in-store sale vs. an Internet sale,” Hyde said. “Certain things we seem to do better than if we were to sell it at cost or below cost in the store, and we actually make a few dollars. The other Internet application that seems to work is used bikes. We list our old inventory on the Internet and that generates calls and e-mails. It’s a great way to merchandise out old stock, get some advertising that’s practically free.”

Further investment
Because of the success Mt. Holly Powersports has had with the Internet and its online sales position, Hyde says the dealership plans to expand its use of the Internet more during the course of the year.
“We’ll expand what we’re already doing somewhat,” he noted, “but I don’t plan on getting into current merchandise on the Internet.”
Another dealership looking to utilize the Web more is Open Road Harley-Davidson in Fond du Lac, Wis. The dealership doesn’t have a full-time online sales person, but it’s not out of the question in the future. Lori Thiel, vice president, says it’s a timing issue.
“We’ve been in business about 14 months. Being an emerging dealership, it hasn’t been a hot priority, but it is something we plan on getting more involved in,” she said. “We have had more pressing things to concentrate on, like our own branding and building a customer clientele. We’ve heard from some of our peers that [the Internet] has been successful, so it’s something we want to develop.”
The dealership currently has its assistant manager in PG&A take care of the Web business. Thiel says they sell general merchandise and P&A on eBay, but not year round.
Lack of success will keep Kearney Yamaha’s involvement in the Internet the same for now, and it will continue to only work with it on the side. Freeze says the dealership did OK with selling used vehicles, but it created too much hassle with the new inventory.
“All we were getting were price offers (from people) who wanted to compare us to (a dealership) 1,000 miles away,” Freeze said, “and we weren’t getting much for sales off of it.”

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