Small Stores Versus Big Stores

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Exterior_HIn a column titled Memories of Dealerships Past,” industry veteran Mike Vaughan wondered whether the industry downturn will give way to smaller, friendlier stores.

One thing is apparent. The number of dealerships is falling rapidly. But what types of stores will be the predominate survivors? What will be the best way to distribute the smaller volume of motorcycles, about half the volume of only a couple of years ago?

Going by the trBertsend in the general retail world, where big-box stores have taken over, I’m guessing the ratio of big stores to little stores will increase. That means more people riding or driving longer distances to get to a dealership. But motorcyclists typically aren’t averse to traveling.

Of course, I’m sure there are plenty of large stores that are hurting financially while their smaller competitors are doing fine. Good business sense and operational skills often trump mere size.

But smaller stores have another strike against them that I hadn’t thought of until I read a letter sent to us from a dealer in response to Mike’s column. Here’s the letter in its entirety:

Having been in this business since the small, friendly stores you write about were the norm, I completely understand your point. I have been gradually moving our five-major-line store in that direction.

However, there is a major obstacle to the return of that idyllic past, and that is the enormously increased burden of complying with local, state and federal requirements. Such things as Red Flag rules, truth in lending, environmental compliance, state DMV rules, workmen’s compensation and insurance and tax issues require that a dealership have a certain “critical mass” of size to deal with these costs that didn’t exist in the ’70s. What that size might be is still a work in progress and will be defined by market forces that are largely beyond our control.

Speaking for ourselves, we are focusing more than ever on whatever we can do with our customers to create/maintain that local shop feel that we both remember fondly. I always look forward to your columns! — Mike Jones, Owner, Streit’s Motorsports, Gainesville, Fla.

Mike Vaughan replied:

I understand the difficulties of returning to the “old days,” but I think you’ve hit the nail on the head: The feeling of those days and the personal involvement of the owner can in some ways be recreated. Hope all is well with you, and that you get through these trying times.

So perhaps even large stores can be friendly. After all, stores like Best Buy usually have greeters and helpful associates roaming the aisles.

But even then, you may never see that friendly “geek” again. It’s just not the same as dealing with the same four or five people every time you enter a family-run store or restaurant. You know, the people wearing multiple hats.

I recently interviewed David Damron, owner of Chaparral Motorsports in San Bernardino, Calif., one of the largest dealerships in the country. Surprisingly, here’s what he had to say about being big:

It’s good and bad. This is an enthusiast sport, OK? Everybody that rides motorcycles is a true enthusiast and wants to come in and feel comfortable wherever he is, and lean on the counter and tell stories and talk about his rides through such and such. And to some degree, we’re so big that we don’t have that ability to have them lean on the counter and tell stories. So you lose some of that camaraderie, I would call it, that the small store has. In disseminating information, small stores are sometimes better in that information because it’s the same guy ordering the parts who’s selling the parts. He’s hanging out at the counter.

Damron also had plenty to say about the advantages of being big. Many of these advantages are obvious. Others aren’t. Employees at the big stores, for example, can specialize in certain functions and therefore often do their jobs better than employees who do many different tasks. “So there are plusses and minuses [to being large],” said Damron.

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3 Responses to “Small Stores Versus Big Stores”

  1. AARON MOON Says:

    Southern california…motorcycle meca….Having said that,We have lost lots of big dealerships in the last year or so,and i have to struggle to think of any small dealerships that wev’e lost.In our particular case,We are a small single line(suzuki) dealership in business since 1967.Our boss pays good and, values having employees that really care and,value their jobs.This translates directly into awesome customer service, that will never be matched by the big dealer that pays low wages to young kids that more or,less…dont care about the dealership or,the person they work for.In addition our building is payed for and, costs are kept to a minimum(very hard to compete with!) Also..the argument that keeping a grasp of business laws and regulation is hogwash.In fact we are much more prepared to directly monitor our business because of It’s small size.

  2. Bob Logue Says:

    Own the building- Be nice to people-try not to pay attention to competitors selling at invoice- but most of all be truly knowlegable and commited to your brand. This is my thirtyfirst year as a Honda dealer and it is not getting easier but I still love the business and look forward to coming to work, In 1980 floor plan was 21% now it is 4% I learned early what the OEMs are now relearning that no one goes broke with a light inventory. Thank you Bob Logue Honda museum.com boblogue.com

  3. Dealernewsblog Top 20 Viewed Stories of 2009 « Dealernews Blog Says:

    […] Small Stores Versus Big Stores […]

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