Power-Up Sales

6/10/2016 12:00:00 AM
Stefanie Zalutko
TruckingTimes

Powersports Industry Offers Retailers And Restylers Increased Profit Potential

Spring is a seasonal gold mine across many aftermarket segments and an ideal opportunity for retailers and restylers to take advantage of increased foot traffic and cash in. There’s certainly no shortage of enthusiast activities to fuel a consumer spending spree.

For example:

• Off-road racing fans are savoring the intensity of a short-course dirt track and tinkering with their own 4x4 parts in the garage
• The Jeep® community is hitting the trails top-down style, hoping to get stuck and put that premium winch to good use
• Open-road adventure seekers have their campers in tow, excited to explore the great outdoors
• Gear heads are making final modifications to get their whips road ready for the summer season

But the powersports market, comprised of ATVs, side-by-sides (SxS), motorcycles, powerboats, personal watercraft (PWC), and snowmobiles, has a diehard group of recreational enthusiasts that often is overlooked as a prime target and means for diversification within the aftermarket. It’s a stable industry with healthy margins and a loyal customer base — and retailers and restylers should be tapping into this pool of increased profit potential.

“(Powersports units) need to be towed, hauled or trailered, and you need a truck in order to do that, so there’s strong customer crossover between truck-accessory shops and the powersports market. Keystone offers products for both,” said Tom Gross, a powersports industry veteran of nearly 30 years and owner of Uni Filter, a manufacturer of high-performance polyurethane foam air filters and a top brand choice among serious off-roaders.

Keystone Automotive Operations, the leading and largest wholesale distributor of automotive aftermarket parts in North America, teamed up with two of its valued partners in the powersports industry, Terracross and Uni Filter, to educate retailers and restylers about the current state of business, market trends, crossover and diversification opportunities, as well as profit potential.

Side-by-Sides Leading the Way

Glenice Wilder, VP of Powersports EFG Companies, said the first quarter of the 2016 fiscal year was off to a positive start, as unit sales, dealer profitability, and maintenance service repairs are all trending upwards. But SxS sales are the true story, taking the industry by storm and nearly cannibalizing a once-dominant ATV market. According to Motorcycle & Powersports News, UTV sales are estimated to be in the neighborhood of 400,000 units, which is significantly higher than its ATV counterpart.

“The UTV has become a popular choice among families, sportsmen and off-roaders alike,” said Joe Duncan, owner of Terracross and a 20-year veteran of the industry with extensive experience in the snowmobile and SxS market segments. “It’s an estimated two-billion dollar segment that is expected to nearly double over the next two years. Whereas ATVs are a highly individualized activity, an entire family can enjoy a UTV experience together during all 12 months of the year, and so we’ve seen a shift (in demand),” he said.

Market data suggests that powersports consumers have one of the largest discretionary budgets, spending thousands of dollars on the unit itself and then several thousand more in aftermarket upgrades — not unlike many truck or Jeep consumers who are eager to customize their rig at the point of purchase with LED lighting, side steps, recovery items or front-end protection. “And that discretionary budget doesn’t end there. It includes an increased rate of replacement parts and maintenance service repairs associated with powersports recreation,” explained Duncan.

Do you see dollar signs yet? According to Steve Nessl, Yamaha ATV/SxS group marketing manager, “The SxS market is evolving, and that’s a good thing for dealers and consumers who will have more selling and buying options.” The result: An opportunity for retailers and restylers to attract new customers, diversify their business and share in the powersports profits — from aftermarket upgrades and personal equipment to repair and maintenance products.

Know Thy Market

Duncan of Terracross offered shop owners some candid advice to consider while exploring diversification opportunities in the powersports industry. “Powersports is a specific niche, so you’ve got to know the players, be knowledgeable about the units and aftermarket products, and share a passionate appreciation for the lifestyle,” said Duncan. “First rule of thumb is to know thy market,” he added. “What kind of powersports are in demand within your immediate area? Is there a body of water, a motocross track or trails?

Next, you want to get yourself involved in the local sport — attend an event, sponsor an event, talk to consumers at the event. Pick their brains about what products they’d like to see offered in your shop. You have to know what’s sellable! This is a loyal group of enthusiasts, and if you support them, they’ll support you.” Uni Filter’s Gross also suggested a handful of core products that will always be in demand among powersports users, including maintenance items, such as tires, filters, spark plugs, chains and belts.

Tap Into Sales and Profit Potential

“On average, accessories spending is about $2,000 the minute (customers) buy the (UTV). They may spend $6,000-$7,000 in accessories over the lifetime of the unit. If it’s being used in the racing circuit, guys could be spending $50,000-$60,000 when all is said and done between the engine, tranny and differential work,” said Terracross’ Duncan. “Bottom line, there’s a lot of sales potential and strong margins on powersports products, which help offset some of the margin pressures on the aftermarket side of the business,” added Gross. “Guys are towing their toys, so it’s a natural add-on sale for truck-accessory shops.”

And it doesn’t stop there! Above and beyond accessorizing, ATVs and UTVs virtually assure consistent work for service repair shops. “The rise of SxS sales represents plenty of tire changes, service work, parts and accessories profitability for dealers to cash in on,” reported Motorcycle & Powersports News. This provides retailers and restylers an opportunity to showcase the significant range of skills its technicians have to service crossover consumers in both the aftermarket and powersports industries.

Partner with a Distributor

“We’re always looking to bring on more enthusiasts and expand our powersports network,” said Duncan. But the powersports industry has a strict distribution model, so diversification must be done appropriately. Duncan and Gross suggested that retailers and restylers identify a target segment, conduct preliminary market research to determine what lines and products will best suit the needs of local consumers, and lean on the expertise of key manufacturers within the powersports space to direct them to the right distribution partner. “Keystone is dedicated to expanding the reach of the powersports industry by getting our automotive aftermarket customer base excited about and involved in the market,” said Jason Shatrowskas, Keystone category manager. “We carry dozens of powersports lines, many of them very strong crossover brands that make it an easier transition into this space for our automotive aftermarket customers.”

Diversification doesn’t need to be drastic. It can be as simple as stocking popular maintenance parts or as complex as broad inventory and repair service. Either way, consider the impressive opportunity that awaits. Let Keystone be your go-to team, helping you explore a new market, expand your customer reach and increase your company’s profitability.

Recent Articles

Larry Montante - 2021 SEMA Board of Directors Candidate

Larry Montante - 2021 SEMA Board of Directors Candidate

Keystone Automotive Operations is proud to announce that after a rigorous vetting process, our very own Larry Montante is a Candidate on the ballot for the 2021 SEMA Board of Directors.

For more than 37 years, Larry Montante has been instrumental in the success of Keystone Automotive Operations. Launching his career in the warehouse then on to roles in Retail, Sales, Purchasing, and Marketing, Larry has risen through the ranks to his current position as Vice President of Category Management. Throughout his time with Keystone, Larry has fostered important relationships with the automotive retail community along with the manufacturers that supply products to the industry.

Now, at a time when the automotive aftermarket is facing some of its most unique challenges, Larry has decided to parlay his lifetime of experience into a role where he can be a strong, positive influence on the industry as he vies for a seat on the Specialty Equipment Market Association (SEMA) Board of Directors. Having been chosen as a candidate for the position, Larry’s campaign emphasizes his years of experience in multiple leadership roles along with his genuine understanding of the needs of retailers, suppliers, and consumers in this rapidly evolving marketplace.

As he looks to make an impact on the future of the industry, Larry’s knowledge, passion and energy make him an idea individual to join the SEMA Board while they work to protect our industry and continue to inspire and educate future automotive enthusiasts. There is much work to be done and Keystone Automotive Operations is proud that one of our own, Larry Montante is ready to roll up his sleeves and do what it takes to get the job done.

Larry4SEMA

Keystone Automotive Operations and Elby Bikes join forces to distribute Electric Bikes across North America

August 1, 2020

Elby Mobility has entered into an exclusive distribution agreement with Keystone Automotive Operations covering the entire U.S. and various parts of other countries. Elby Bikes created its first e-bike with an industry-leading hydroformed step-through frame design and continues to innovate in the e-mobility market.

"With the growth in the e-bike market over the past few years, businesses like ours need to secure, strategic partnership programs with a company like Keystone, that deliver products to market more efficiently and quickly," said Frank Stronach, owner of Elby Bikes and founder of automotive products manufacturer, Magna International. "Our strengths have always been creating and designing high quality industry-leading products and bringing them from concept to reality. We are also excited to show what we have for 2021, and we feel Keystone is the best partner to launch with"

Elby Mobility evaluated several options before landing on Keystone. "I have been a pioneer in the automotive aftermarket for decades and we feel that Keystone is the perfect fit for the growth of Elby Mobility. Under our new leadership team, we are excited to support the distribution and B2B platform once again."

"We are very happy to partner with Elby Mobility in this rapidly growing space." Said Andy Morgan, category director for Keystone Automotive Operations. "Elby’s ebikes are extremely high quality, use top notch components and are consistent with the quality we expect. The product is very well designed, operates impeccably and most of all are fun to ride! We are excited to serve a new dealer base as well as offering them to our existing customers."

Elby Bikes

About Elby Mobility

Founded in 2019, Elby Mobility is pioneering a revolution in the way we move through our communities and cities. Elby Mobility’s ebikes provide empowering alternatives to move people through their communities with ease. By providing a scalable, leading-edge solution, we strive to relieve the pain points of transportation and build value for businesses. At the same time, we know our electric-powered solutions are contributing toward a sustainable future, reduced congestion, a cleaner environment, and higher quality of life for everyone.

Elby Mobility sells directly to consumers but is also a leading provider of ebike fleets to hospitality properties, corporate and collegiate campuses, high-density residential communities, and municipal governments. These fleets provide organizations with new opportunities for revenue generation, improved customer engagement and loyalty, and methods to advance corporate sustainability initiatives.

Elby is welcoming, aspirational, connected, and built to carry us all into a better future. Most of all, they’re incredibly fun to use. Elby. Feel Electric.

For more information on Elby Mobility, please visit https://www.elbybike.com

COVID-19: How we are responding, a message from our President

To our trusted suppliers and customers:

The unprecedented effects of COVID-19 (coronavirus) are having a tremendous impact on our lives and businesses. The health, safety and wellbeing of our employees, customers and suppliers is our primary concern and we are continuing to take actions to mitigate the risks across all our facilities based upon guidance provided by the U.S. Center for Disease Control (CDC), the World Health Organization (WHO), the Occupational Safety & Health Administration (OSHA) and other public health authorities and resources. We continue to expect that all employees and drivers remain vigilant in maintaining proper hygiene habits in addition to social distancing.

Our practices have been enhanced to include more frequent, regular cleaning and disinfecting of delivery vehicle surfaces such as interiors and steering wheels, remote controls on lifts, doorknobs and other areas of the vehicles that are frequently touched. We have modified travel and in-person meeting policies appropriately and expect our employees to stay home if they show symptoms or feel sick. We have instituted rigorous cleaning and sanitation practices throughout all our warehouses, vehicles, offices and facilities. Where possible, employees have been transitioned to work at home while we have established strict distancing guidelines for associates working in any of our operating facilities.

We actively monitor the fluid developments of this situation as we continue to serve our customers and support the interests of our suppliers. Many of our customers and suppliers are small and medium-sized, independent essential businesses and as a vital component of the supply chain, we are doing everything we can to service them and the communities and consumers they serve. In the furtherance of this objective, we continue to receive and process orders and maintain deliveries where there is demand and not limited by government restrictions.

We understand the economic realities of this unprecedented situation with their impact on our industry and believe that in staying the course, we can take steps to mitigate the disruption to our business partners. We are confident that this challenge will pass, and we will move forward together.

We wish you safety and health and thank you for your support.

Thank you,
Bill Rogers

eKey App Used by Over 1000 Jobbers

The eKey Mobile App launched early 2019. No more were Jobbers tied to a computer terminal. The app gave the flexibility to access eKeystone tools from anywhere they choose. In addition to Year/Make/Model and VIN barcode reader, Jobbers can use the Smart Search tool they are familiar with from the eKey website. It doesn’t stop there, once the parts are orders on the app, Jobbers can track the status of their delivery truck, ensuring that service schedules can be maintained. The app is available for download on the iTunes App Store and Google Play.

Keystone News