OPE’s 2010 Dealer Survey

By Steve Noe


To say that a lot has changed with the maturation of the outdoor power equipment industry since 2001 would be a huge understatement.


For example, in 2001 we at OPE conducted a nationwide survey that revealed less than half (48.74 percent) of OPE dealers had a Web site. Through a similar survey that we did in 2006, we learned that figure had jumped to 55.62 percent. Fast forward to 2010, and we discovered through our latest survey that approximately two-thirds (66.9 percent) of OPE dealers now have a Web site. Personally, I was surprised that figure was not even higher.


We e-mailed this year’s 20-question survey to 1,876 dealers nationwide on June 16, and I’m pleased to report that 7.1 percent of them completed the survey by the June 25 deadline.


Knowing that the answers to a few of our questions would vary from region to region –specifically when it comes to shop labor rate and technician pay — we decided to break down the possible choices to those particular questions into the following five regions:

Northeast: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont
South: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia
Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin
Northwest: Alaska, Idaho, Montana, Oregon, Washington, Wyoming
Southwest: Arizona, California, Colorado, Hawaii, Nevada, New Mexico, Utah

Without further adieu, I would like to share with you the findings of our survey, along with some of my observations:


 Ownership


The age of dealership owners has been steadily on the rise since 2001.


In 2001, we found that half (50.7 percent) of OPE dealers were at least 50 years old. Now nearly three out of every four dealers (76.1 percent) are 50 and over. I guess that means dealership owners really love what they’re doing for a living; can’t find someone ready, willing and able to take the business off their hands; or have been forced to postpone their retirement.


Furthermore, nearly nine out of every 10 dealers (92.5 percent) have already celebrated their 40th birthday.


Employees


The makeup of a dealership workforce has remained relatively the same since 2001 with about half of all dealerships having a total of 1-5 employees, including 1-2 service technicians.


I commend you for stepping up your efforts to take care of your employees, with 54.9 percent of you offering medical coverage (versus 42.01 percent in 2006) and 37.3 percent of you providing a 401(k) or other retirement plan (versus 24.26 percent in 2006).


Annual gross income


In addition to ownership age being on the rise since 2001, so has annual gross income, suggesting that owners are aging like a fine wine.


In 2001, 68.62 percent of dealers had an annual gross income of more than $250,000; now that figure sits at 77 percent. Those owners pulling in $251,000-$500,000 has gone up slightly from 14.85 percent in 2001 to 15.8 percent this year. Perhaps most notable, the percentage of respondents in the $3-million-plus club has skyrocketed from 12.32 in 2001 to now 19.4.


In addition, about half of the respondents (51 percent) said that their satisfaction level with profit margins was “fair,” which was slightly higher than it was in 2001 (45.66 percent) and 2006 (48.2 percent).


Sales trends


Taking a closer look at annual gross income, the highest percentage of dealers said that 81-90 percent of their business stemmed from consumers, while commercial made up 10 percent or less.


One disturbing but perfectly understandable trend, given the current tough economic climate, was that 20.3 percent of respondents said that they downsized their business in the past five years and just 44.1 percent expanded during the same timeframe versus 2001 when 61.06 dealers expanded their business during the previous four years and just 11.2 percent downsized during that same time period.


Service


In 2001, the going shop labor rate was about $45 per hour, most starting service technicians were making $7-$8.99 per hour, and the best service techs were being paid nearly double that amount at $15-$16.99.


Since then, the going shop labor rate has shot up nearly $20 per hour, and with the federal minimum wage now at $7.25 per hour, most starting techs are making at least $4 more per hour. However, the best service technicians are still making about the same hourly wage as they did in 2001. Before you read too much into these hourly shop labor and technician pay rates, please be sure to reference the charts that break down these numbers regionally.


Dealers are also becoming much more selective on which brands that they are willing to service. In 2001 and 2006, approximately 47 percent of dealers said they would be willing to service “all brands,” but that percentage plummeted to 36.1 this year in favor of servicing “brands sold and selected others,” which skyrocketed from about 40 percent in 2001 and 2006 to 54.2 percent this year.


By the way, service selectiveness doesn’t appear to be tied to warranty payment satisfaction, with 49 percent saying it was “good” and an additional 9.8 percent saying it was “very good.”


Biggest concerns


When asked what their biggest concern was, 31 percent of respondents said that it was the cost of operating their business, with the economy a close second (29.7 percent). Rounding out the seven possible choices were as follows: availability of quality employees (13.8 percent), weather (11 percent), profit margin from sales (6.2 percent), competition (2.8 percent) and other (5.5 percent).


Concern over the availability of quality employees was underscored by 88.9 percent believing that there is a shortage of qualified service technicians in the OPE industry.


I would like to thank all of those dealers who took a leap of faith and valuable time out of their busy schedules to complete the survey so that we could validate the results.


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