Dealers’ Domain: Mid-year Report

Question: How has your dealership’s business been for the first half of 2010?

We are happy to advise our total sales are up 12.8 percent for the year versus the same time period in 2009 with gross profit down 3.3 percent. This pressure is being caused by mostly Internet pricing of wholegood equipment. Equipment sales are up 1.5 percent with gross profit down 2.3 percent, labor sales are up 11.3 percent, parts sales are up 20.2 percent, and salt sales are up 143.02 percent. Equipment sales represent 53.7 percent of total sales, labor 15.8 percent of total sales, parts 21.4 percent of total sales, and salt 9.1 percent of total sales.
We are hopeful the weather remains at least normal with no drought conditions this summer and that manufacturers enhance Internet polices. We believe 2010 will be a growth year overall. We are hopeful dealers will work together to create the profit needed to survive now and into the future. We all deserve to make appropriate profits to invest in our businesses for the future. I hope the manufacturers work with dealers to maintain and enhance these opportunities moving forward.
— Dale W. Magie, general manager
West Chester Lawn and Garden
Liberty Twp., Ohio

Our season started slowly. We didn’t start selling mowers until late March. Maybe it was the weather, maybe the economy; it’s a little hard to get a grasp on what was going on.
Then, things took off and we had strong sales, not only on mowers, but across all lines of equipment. If you had asked me three weeks ago [response received June 21], I would have predicted that we were on track to see about a 7-percent to 10-percent increase in gross sales over last year. I’m not so optimistic now. The last three weeks have all been losers. We are back in a rainy, stormy weather pattern, and the clock is ticking away.
For our area, July 1 marks the end of the mower selling season. We will sell a few throughout the rest of the summer and into fall, but the concentration of sales that we count on to fill the cash drawer, is over. It is time to look to another profit center for the mid-summer, and quite frankly, there just doesn’t seem to be any emerging.
Our powersport stuff has slowed, barbecue grills have slowed, generators never took off, our mini-skids and mini-excavators are in their natural slow time, and it is too early for stoves and winter merchandise. The next couple of months could be pretty flat unless things change.
So there goes my prediction for a better year over last year.
By the time we get to fall, I think buyers will go on “hold” until after the mid-term elections. That doesn’t leave much time to put together a great year.
I hope I am wrong, but 2010 might turn out to be worse than 2009 unless customers loosen up and start making major purchases again.
— Roger Zerkle, owner
ZDE, LLC
Flat Rock, Ill.

My little one-man operation has been so deluged with business, I’ve had to farm out repairs I’d rather not handle. Also, I’ve sub-contracted a delivery man to pick up and deliver. Now, for the first time in a couple of years, I can have my evenings free from deliveries. Next, I’ll have to learn to turn off my cell phone after supper time.
— Flute Snyder
Hudson Mower Doctor
Hudson, Wis.

With the start of the New Year, we had high expectations. However, with that said, at the end of February, our sales were behind ’09’s. Still, we stuck with what has made us successful over the years, and our March was great. Then, we had our largest sales months on record for April and May. So, hopefully, overall, this year’s sales will be slightly higher than last.
— John P. Moon
Moon’s Farm-Yard, Inc.
Ulysses, Pa.

We had a relatively slow start. Total revenue lagged behind the last two years until April gave us a good boost. Currently, sales are a bit flat. All of the negatives are in large equipment sales, which tend to skew the numbers quickly. Service and parts sales have held up pretty well throughout the economic downturn. Things look a bit better this season, but we’re a long way from the good ol’ days!
— Bill Valliant
Fayette Mower
Fayetteville, Ga.

The year started slow, then — wham — by April, we were full out. We have surpassed last year’s numbers and things are going great with no end in sight.
— Matthew Borden, owner
Ed & Matt Equipment
Greenville, R.I.

Overall, our sales are flat compared to the same period last year — so is gross profit. Fortunately, due to the drought in 2007 and 2008, we made adjustments in expenses so our net profit is actually up slightly.
We’re trying to increase sales by increasing our outside sales force, but frankly not a lot of results. No one is buying big stuff. Handheld equipment is up a little, but the increase is completely offset by the decrease in mowers above 21 inches. Even the increased rainfall didn’t help this year.
I guess flat is the new up. ; ) At least everyone tells me we’re lucky we are able to maintain year-over-year sales.
— Paul D. Lasiter
Mason’s Saw and Lawnmower Service, Inc.
El Cajon, Calif.

I really can’t complain. We are 7 percent over projections for 2010. Our projections are based on a 5-year average per each month, with a small percentage added for growth. This doesn’t include 2009, however, as we had 110-mph winds on May 8, 2009, with nine counties declared a federal disaster area and sales were off the charts!
— Dean Davis
Dogwood Fireplace & Lawn
Carbondale, Ill.

This has been the best first-half year ever for us. Haven’t sold a lot of ride-on equipment — still hard to compete with the pricing and hours of the big box stores. I’ve noticed the public is more interested in price not quality ‘til after they own it and start seeing the repair bills. Then it’s, “Well, I spent $1,000 on this new rider.” I would love to respond, “What did you expect for $1,000?” However, walk sales were up, and the handheld equipment was good. Our techs were busting their tails this year on repairs. Looks like a classic hot summer coming up, and we all know what that means.
— Tony Nation
Nation’s Small Engine, Inc.
Hot Springs, Ark.

This year has been wonderful! In January, we had some snow. But in February, we had some of the worst winter weather ever in Pittsburgh. The last bad winter we had in Pittsburgh was 1994. The last good year for us was 1995. Since then, snowblower sales had been decreasing more every year and had been very low. This winter, however, we got so much snow that we sold out of our snowblowers, but fortunately were able to get seven shipments from dealers in other parts of the country where they were not getting snow. We had every one sold before they came in and no one canceled their order. We are already taking deposits for this winter and have sold more than previous winters. We have had power outages too and sold every generator we had in stock. It goes to show that the weather is the biggest factor in our business. The spring season has been much better than normal too. We have been getting rain, which has really helped. The last few years, lower-priced units like mowers and handheld products sold well, but higher-ticketed ones didn’t. This year, we have cleaned out ALL of our old inventory. Large zero-turns and commercial walk-behinds that had been in stock for two years or more have almost all been sold, and we didn’t have to sell them at cost. We usually slow down by the end of May, but this year, we are still selling equipment and service is still very busy. We are working lots of hours but feel we are blessed to be doing so well. We hope this continues.
— Sally Miller, president
Dobosh Center
Pittsburgh, Pa.

Our business has been good the last three months, but January, February and March were terrible. Could have shut the door and stayed home.
— Kay Annear
Annear Equipment
Adel, Iowa

This has been the best six months. Sales are strong.
— Bill Schram
Chatham Outdoor Power
Chatham, Ontario.
Canada

Service business strong — wholegoods sales weak.
— Donny Black, owner
B&B Enterprises
Batesburg, S.C.

Our business has been on an average of two weeks behind since the first of the year. Right now, we are about three weeks out, but I have hired another mechanic to resolve that issue.
— Gordon Jamison, service manager
Lawn & Leisure of Lee’s Summit
Lee’s Summit, Mo.