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PowerNews
TM
www.npauctions.com
VOLUME 3 • OCTOBER 2014
ADDRESSING
AGED
INVENTORY
The Elephant
In The Room
No Dealer Likes
To Acknowledge!
Nobody likes losing money, but how long
should you wait before pushing your aged
inventory out the front door? The experts
say no more than 120 days before a unit
on the showroom floor reaches the point of
diminishing returns! So what is your timeline
and retail strategy for getting rid of the
elephants cluttering up your showroom? NPA’s
regional sales team comprises our panel of
expert elephant wranglers. Between them,
they have more than 75 years experience with
the pre-owned market… and like elephants,
they never forget a good idea.
“In some markets like the Northeast you
have to take seasonality into consideration,
but generally I think that 120 days really is
the max a dealer should hold onto a unit,”
says Dusty Krepp. “Age is not a function
of days, but a matter of the value that you
have in the bike (purchase price, service,
juice and/or cost of capital) vs. the current
market value in relation to the season,” adds
Matt Gunter.
“For example, if you go deep in a trade in
November, you may still have a few months to
retail due to seasonal value increases as you
go into the Spring,” explains Matt. “And if you
steal a trade in April, you will have less time
until the downward market adjustments catch
up to your ‘bargain’ value.” The bottom line
is that you have a finite window before that
terrific deal begins costing you money.
Every dealer wants to squeeze as much
value out of every deal they can. “Many
dealers pride themselves on owning all of
their own inventory and think that because
they do, that they somehow are immune to
the cost of the money,” says Matt. “Even
though there is no blatant flooring charge,
dealers still incur a cost, of capital and
associated missed opportunity costs not
to mention other holding costs such as
potential damage, dead batteries, stale
fuel, gummed up carbs, and the labor
cost affiliated with the corrections.”
“Your
pre-owned inventory is an investment, so
you should be focused on turning that
investment into a profit as quickly as possible,”
says Dusty. “Don’t hold onto the unit for months/
years in hopes of getting few hundred dollars
more. Hold out for retail money for 90 days — if
it doesn’t sell, list it at a discount for another 30
days… then after that, wholesale out of it!” You
need to reinvest your cash into a profitable unit.
The only exception is a unit that was purchased
well below market value in the off season; in that
case it may make sense to give it an extra 30
days into prime Spring retail season.
Use the NPA Value GuideTM and buy your
inventory right. If a dealer uses the Value Guide
for their appraisal, it will help them make the
right decision on taking in trades. So if they have
to go to Plan B after 120 days and wholesale
through NPA, they’re into the unit right and can
still make money, or at least bust out of it. “As
Matt mentioned, good inventory management is
staying in front of the market and wholesaling out
of aged/problem units every month before they
become bigger problems and the dealer is way
upside down on their investment,” concludes
Dusty. In short: “Keep the inventory fresh all
the time!”
see ADDRESSING AGED INVENTORY, p2
IN THIS ISSUE
Addressing Aged Inventory
Tradeshow ROI
Power Profile Orlando H-D
Point Standings 2014
MIC Snap Shot
Media Watch - NPA BBQ
Harleys at the Hard Rock
SAN DIEGO • DALLAS • CINCINNATI • ATLANTA
TOLL-FREE 888.292.5339 WWW.NPAUCTIONS.COM
TRADESHOW ADDRESSING AGED INVENTORY
ROI
Tradeshows Are
continued from cover
Key To Advancements
Within The Powersports
Industry
By Jim Woodruff
It’s tradeshow season! The few times each year
where dealers, OEMs, aftermarket groups and
dealer services join under one roof to take their
businesses to the next level. But what’s the big deal
about tradeshows, and why should you attend?
Let’s face it - with the growth in mobile connectivity
our focus has been diluted to an all time low. Don’t
believe me? Next time you are on a conference call
look around the room and count how many of your
team members are on their phone or tablet. Sitting
in a meeting without texting, emailing and checking
social media is a thing of the past. But tradeshows
are the few times each year where key players
of the industry interact with limited distractions.
Attendees have the opportunity to see, touch
and try the newest offerings and unlike website
descriptions and forums, dealers have direct
access to the people responsible for the products
they are interested in.
To maximize your investment in time and money,
choosing the right tradeshow is key. Make sure the
companies you want to meet with are attending.
Some OEMs are beginning to conduct dealer
meetings at tradeshows, combining the best of
both worlds. Plus, powersport tradeshows like
AIMExpo, DealerExpo, V-Twin — and even some
OEMs and distributors that conduct their own
events — have made large investments in providing
educational tracks for their dealer attendees. By
choosing the right show you can get months’ worth
of introductions while learning new ideas that can
help take your dealership to the next level.
Bottom line: Tradeshows and seminars can
provide a great Return On Investment. Take
advantage of these low-cost resources this fall to
build your business.
CONTRIBUTORS
www.npauctions.com
NPA San Diego, 12400 Stowe Drive • Poway, California 92064
TOLL FREE 1-888-292-5339 • Fax 858-513-1599
Copyright 2014, National Powersport Auctions
SENIOR EDITOR ..............Robin Hartfiel
PRODUCTION EDITOR ... Ryan Keefe
ART DIRECTOR. ...............Efraim Manuel
MANAGING EDITOR .......Becky Sabala
Aged inventory gets expensive in a hurry,
points out Pete Heisser. “First and foremost, it
stops you from buying the stock that does sell.”
Pete’s tips to avoid getting behind the eight
ball are pretty simple: buy right and review
everything that doesn’t sell. “Review each
piece that has been in the store more than
four months,” suggests Heisser. “Of course the
best cure is prevention… and to avoid buying
badly in the first place.”
“Make sure that the inventory is in good ‘Ready
to Sell’ condition. Teach the staff to include a
piece of aging inventory, whenever possible, in
each sales presentation.” Pete points out that
the process of “Managing Your Aging Inventory”
is a part of your ongoing responsibilities as a
manager, so set a calendar on every pre-owned
unit. “Purchasing is a science more than an art.
Use existing information to access data of what
sells and to help you select winners and losers
for your floor.”
Every dealership has an ideal turn time.
“Turn times vary drastically depending on
the overall health of the shop,” says Colton
Clifford. Franchise stores are much different
than independent stores and size seems to
be a big factor as well. “I always find myself
defaulting to my baseball analogy because
I haven’t thought of a better one yet,”
claims Colton.
“Everyone wants to hit home runs, but if
you’re striking out swinging for the fence all
the time, it makes sense to just hit some
singles and doubles so you can have runners
in scoring position,” he says. “Winning games
brings in the fans, not home runs!” Just like a
baseball team manager, a dealership’s sales
manager should view his inventory like “batters”
and understand that not every player is Albert
Pujols. “It’s all about turning the inventory.
Accept the smaller return for this at-bat and
re-invest that money into a better hitter next
time around. Otherwise your bench is going
to look like the Bad News Bears!”
Jon Garrett sums it all up nicely. “Aged
inventory will stop you from buying new
inventory that could potentially sell. This
could be because of cash flow or even floor
space.” The good news, there are remedies
for both:
1) Review each unit that has been in stock
for 90 days. After a unit has been in stock
for 90 days, give it a month at a “Blow Out”
retail sale price and try to earn a customer.
If it does not sell within a total of 120 days,
send it to NPA and replace the unit with
something that will turn a profit on the
show floor.
2) Value Guide! There is nothing in the
industry that can compare to the NPA Value
Guide. This is a tool that every dealer should
use when taking trades. A machine is worth
whatever someone is willing to pay for it.
Therefore, the NPA Value Guide is the best
source for accurate wholesale numbers to
make sure you are not buried after 120 days.
3) Do not be afraid to take trades that you
are not familiar with. Besides Value Guide,
you can use your NPA Sales Manager as an
extension of your own used department, to
help put a number on one-off trades, makes,
and models that you do not normally carry
or have a customer base for.
These strategies should prove effective for
taking out the elephants on your showroom
floor… and more importantly, keeping your
bottom line in the black.
CALENDAR OF EVENTS
NPA SAN DIEGO
• October 3rd
• November 7th
• December 5th
NPA DALLAS
• October 10th
• November 14th
• December 12th
SECTION EDITOR ........... Sara Spohr
VOLUME 3 • OCTOBER 2014 • NPA POWERNEWS • WWW.NPAUCTIONS.COM • P2
NPA CINCINNATI
• October 15th
• November 19th
• December 17th
NPA ATLANTA
• October 17th
• November 21st
• December 19th
POWER PROFILE Orlando Harley-Davidson
What’s it like to have somebody
looking over your shoulder?
Will Swart is used to it! As the
GM for two separate high
profile dealerships in the
Orlando Harley-Davidson family
of stores, he has been in the hot seat for the past
15 years. With three dealerships and seven retail
stores serving the Orlando and Kissimmee areas,
Orlando Harley-Davidson boasts that it has the
largest selection of Harleys in the world.
“We have more than 500 new and certified preowned motorcycles at any given time,” explains
Will. Since the distinctive flagship dealership
opened in June of 2000, Orlando Harley-Davidson
has been attracting eyes! The dealership itself is
an exact replica of Harley’s factory on Juneau
Avenue in Milwaukee. The business operation has
been under the watchful eye of HDMC savior and
founder of Harley Financial Services, Steve Deli and
his wife Anne, former Harley-Davidson VP of Global
Marketing. Like Deli, Swart first decided to turn his
passion into a profession by joining the original
launch team for Orlando H-D.
From the beginning, Orlando Harley-Davidson’s
management
team
has
understood
the
importance of the pre-owned market. “We offer
the complete Harley experience with new and
pre-owned sales, service, parts and financing…
this means we have to be flexible with trade-ins
and keeping our inventory levels up.” This selection
of pre-owned units comes from trades, re-purchases
and auctions.
NPA is proud to have worked with Orlando H-D
since the beginning. “We made our first purchase
from an NPA auction in 2001,” says Swart. “We
consigned our first units in 2009. Consigning
to auction works well for non-moving inventory,
purchasing to balance inventory, and giving our
customers a good selection.” What to do with the
non-HD trades they take in?
“We wholesale them or send
them to NPA,” Will explains.
“We utilize all the tools
available — HDDX, HD closed
sales, consignments, NPA
Simulcast, eSale, NPA Value
Guide, you name it, we use
it.” Will says, “The NPA Value Guide really helps
when taking trades.” They use NADA then check
NPA Value Guide as support to NADA. So which
POINT STANDINGS
MONSTER ENERGY SUPERCROSS - 2014 RESULTS
250W
1. JASON ANDERSON - 193
2. COLE SEELY - 188
3. DEAN WILSON - 163
4. JUSTIN HILL - 272
5. COOPER WEBB - 143
250E
1. JUSTIN BOGLE - 188
2. MARTIN DAVALOS - 149
3. VINCE FRIESE - 131
4. KYLE CUNNINGHAM - 127
5. ADAM CIANCIARULO - 120
450
1. RYAN VILLOPOTO - 368
2. RYAN DUNGEY - 304
3. KEN ROCZEN - 285
4. JAMES STEWART - 272
5. JUSTIN BARCIA - 250
LUCAS OIL PRO MOTOCROSS - 2014 RESULTS
250
1. JEREMY MARTIN - 500
2. BLAKE BAGGETT - 421
3. COOPER WEBB - 419
4. MARVIN MUSQUIN - 408
5. JUSTIN BOGLE - 368
450
1. KEN ROCZEN - 532
2. RYAN DUNGEY - 518
3. TREY CANARD - 468
4. BRETT METCALFE - 334
5. ELI TOMAC - 319
AMA PRO ROAD RACING - FINAL RESULTS
Supersport
SuperBike
1. HAYDEN GILLIM - 246
2. DUSTIN DOMINGUEZ - 244
3. WYATT FARRIS - 183
4. COREY ALEXANDER - 156
5. KALEB DE KEYREL - 155
1. JOSH HAYES - 285
2. ROGER HAYDEN - 231
3. CAMERON BEAUBIER - 206
4. CHRIS CLARK - 176
5. DAVID ANTHONY - 175
WORLD SUPERBIKE 2014
CURRENT POINT STANDINGS
tool is the most useful to Orlando Harley? “They
all help, but the three biggest are simulcast sales,
NPA Value Guide and HDDX.”
Of course the GM of a dealership modeled after
the old factory would have to ride an appropriate
bike. His first Harley was a 1995 Heritage Softail
Classic! With the powersports universe descending
on Orlando for the 2nd annual AIMExpo in
October, Swart will have to contend with a lot
more eyes on his business… “Bring it on,” he says,
“I’m used to it.”
World Supersport
World SuperBike
1. MICHAEL VD MARK - 185
2. FLORIAN MARINO - 109
3. JULES CLUZEL - 107
4. LORENZO ZANETTI - 90
5. KEV COGHLAN - 88
1. TOM SYKES - 352
2. SYLVAIN GUINTOLI - 321
3. JONATHAN REA - 285
4. MARCO MELANDRI - 267
5. LORIS BAZ - 262
MOTO GP 2014
CURRENT POINT STANDINGS
Moto2
MotoGP
1. ESTEVE RABAT - 278
2. MIKA KALLIO - 245
3. MAVERICK VIÑALES - 204
4. DOMINIQUE AEGERTER - 143
5. THOMAS LUTHI - 116
1. MARC MARQUEZ - 292
2. DANI PEDROSA - 217
3. VALENTINO ROSSI - 214
4. JORGE LORENZO - 202
5. ANDREA DOVIZIOSO - 142
ATTENTION AUTHORIZED H-D DEALERS
Are you looking for an edge when it comes to pre-owned inventory? Are you making decent margins, but
feel you are leaving money on the table? Have you made an offer on a trade-in without knowing the true
market value? The pre-owned landscape changes daily, and all too often dealerships around the country
are not aware of the newest pre-owned trends and tools available to them to maximize their pre-owned
inventory appropriately.
Harleys at the Hard Rock is a two-day event November 5th -7th, 2014 in San Diego, CA focusing on
the best practices of pre-owned. All H-D dealers who attend the event will receive two nights free stay at
the Hard Rock Hotel, along with shuttle service to and from the airport. The event will also include
a closed pre-owned auction open to all authorized H-D dealers.
For more details: www.hd-dealerexchange.com/hardrock2014
VOLUME 3 • OCTOBER 2014 • NPA POWERNEWS • WWW.NPAUCTIONS.COM • P3
MEDIA
WATCH
PSB Cooks Up NPA’s 24 Anniversary BBQ
th
Something is always cooking
when it comes to NPA in the
media. Powersports Business
Editor in Chief Dave McMahon
attended National Powersport
Auctions 24th Anniversary
BBQ celebration at NPA’s
San Diego headquarters this
summer and feautured it
in the trade journal and
on the magazine’s website.
MIC SNAPSHOT
JUNE 2014
YEAR TO DATE
VEHICLE TYPE
GENERAL TYPE
2014
CURRENT
2013
PRIOR
UNIT
CHANGE
PERCENTAGE
CHANGE
ATV
ATV
107,283
106,686
597
0.6%
MOTORCYCLE
DUAL
20,033
18,688
1,345
7.2%
MOTORCYCLE
OFF-HWY
39,742
37,349
2,393
6.4%
MOTORCYCLE
ON-HWY
186,394
183,332
3,062
1.7%
MOTORCYCLE
SCOOTER
17,644
17,691
-27
-0.2%
MOTORCYCLE
TOTAL
263,833
257,060
6,773
-2.6%
GRAND
TOTAL
371,116
363,746
7,370
2.0%
GENERAL TYPE
2014
CURRENT
2013
PRIOR
UNIT
CHANGE
PERCENTAGE
CHANGE
-5.6%
MONTH
VEHICLE TYPE
ATV
ATV
17,681
18,720
-1,039
MOTORCYCLE
DUAL
3,585
3,201
384
12%
MOTORCYCLE
OFF-HWY
7,182
5,939
1,243
20.9%
MOTORCYCLE
ON-HWY
37,520
38,076
-556
-1.5%
MOTORCYCLE
SCOOTER
4,474
4,266
208
4.9%
MOTORCYCLE
TOTAL
52,761
51,482
1,279
2.5%
GRAND
TOTAL
70,442
70,202
240
0.3%
The motorcycle industry is on a roll… literally. According to the
Motorcycle Industry Council Tire Sales Report more than 1.1 million
motorcycle tires were sold in the first six months of 2014. This doesn’t
include ATV/UTV tires or and scooter tires, either. Knowledge is
power and the MIC has some of the most powerful tools available for
forecasting information, MIC provides its members with quarterly tire
market reports and the quarterly “Flash Reports” depicted above as
ways of benchmarking new unit sales. Although NPA specializes in preowned inventory, we felt it would be beneficial to share this data with
you (with MIC’s permission, of course). Much more detailed figures,
including make and model breakdowns are available to MIC members,
as is their comprehensive Statistical Annual and trend data from Polk.
In a change of long-standing policy, dealers can now become MIC
members and access much of the same data as the OEMs, including
the Flash Reports like this one and the aforementioned Tire Sales
Report. For more details on the benefits of MIC membership visit:
http://membership.mic.org
Prior to the Friday auction, dealers
came out in full force on Thursday to
preview bikes and enjoy a BBQ dinner
under a sun-soaked afternoon that
included mechanical bull rides and a
DJ. VIP guests from NPA’s lender and
transportation partners were also on
hand as part of the event.
“Our main goal in hosting the
event is to tell our dealers, lenders
and transporters thank you,”
Marketing Director Ryan Keefe
explained to PSB. “You build
great relationships with
people over 24 years, and
we want them to know we
appreciate their business
and friendship. It’s also
a great way for our staff
and guests to interact
with each other in a fun,
relaxed environment. We
definitelyaccomplished
all these goals again
this year!”
NPA ON THE MOVE
Taking The Dragon By Its Tail
In August a few NPA lifers decided we
needed a ride. Nobody really knew
where we wanted to ride, but we all
agreed that it needed to be at least
two days and include several different
terrains. As we discussed possible
rides and locations, nothing seemed
to pan out. Then someone mentioned
the Tail Of The Dragon. We’ve all heard
about the legendary route, but being
from southern California none of us had
ever ridden it. It was a road trip we all
wanted to experience but never found a
good enough reason. Then we got word that the Harley-Davidson Dealer
Meeting was taking place in Nashville the week after our Atlanta auction.
Tail Of The Dragon was on the way (in a roundabout sort of way) from NPA
Atlanta to Nashville. Later that day, the tickets were booked and the bikes
were shipped. We spent three days exploring the Smoky Mountain National
Park and finished with the Tail Of The Dragon. 650 miles later with a few
sunburns and battered rain gear we all arrived in Nashville with smiles from
ear to ear. Next time you are looking for a great ride, check out the Tail Of
The Dragon, you won’t be disappointed.
VOLUME 3 • OCTOBER 2014 • NPA POWERNEWS • WWW.NPAUCTIONS.COM • P4