Thursday, November 18, 2010

Pep Boys, Sears, and more thoughts on the Industry Toilet

A good friend of mine sent me an email talking about the death of the Garden Industry thanks to the Home Depots and all the OEMs selling direct online. You know what I'm talking about with those late night TV commercials on pro-tools and pro-lawnmowers.

He wrote me the story on the high school coach speaking to the new player:

"Are you ignorant or just totally apathetic?" screamed the perplexed coach.

"I don't know and I don't care," came the slacker's retort.

The death of the individual dealer in both the L&G and powersports industries is no laughing matter, but the sad joke is that the market will go away and the big boxes will have the last laugh!

The fact that Sears is now selling scooters is a clear sign of where the industry is headed. This is just another shot at killing the small mom and pop dealership where state laws should be there to protect them. By selling off-road vehicles in catalogs like Northern Tools, Pep Boys, and drop shipping hey I've even seen them on Delta planes lately.

The latest L & G figures indicate dealers are getting older and there are very few young techs and even fewer young dealers. So the older guys are left holding onto the repair work. Basically peanuts because Baja doesn't comply with most state laws. In WA state you have to PAY in warranty whatever the shop hourly rate is, do you think BajaMotorsports can comply with that? Obviously Sears and Pep Boys won't pay warranty they leave it up to the OEM, that just goes to show they think the powersports business is like selling a lamp. The companies have no knowledge whatsoever of motor vehicle sales. If you don't resist the majors like Baja next thing you know you will see SYM selling to Major Box Stores who are in direct competition with the MFGs sales & Service network set up by a company like say Carter, but the Box store has the best price breaks and the service industry is expected to be happy with the service dollar crumbs.

Look at this video from Italy where they sell Scooters in the Supermarkets.

Do you think a Supermarket can give you service? Nope didn't think so.

I don't know when or if the dealer networks will ever wake up but if they do the MFGs are going to be in a world of hurt when the service dealers tell the MFGs we are no longer going to do warranty much less keep repair parts for units unless you stop giving all the gravy to the Box Stores. This is what happened in the lawn industry and its whats happening in the Powersports Industry. Pep Boy sells Kinroad Go Karts. Where is Kinroad USA today? The factory that makes Hammerhead also sells to Pep Boys - look at where the kart market is today with half the buggy dealers closing after 5 years of growth.

What will happen to the US scooter industry 5 years from now if the trend continues? Will Pep Boys be doing the service for the mom and pop shops? or will they put more junk on the road in the states where they are allowed to without any recourse?

Something to think about.

No comments: