Outdoor Power Equipment magazine recently asked several dealers about how their business fared in the first half of 2011. Following is the feedback that we received…
2011 has been a challenging year, so far. Our season got off to a late start, due to unusually cold and wet weather. February and March yielded very few mower sales.
We had a break in the weather pattern in April, and sales were good. It was apparent early on that the banks had loosened credit. Some loan approvals were for credit scores ranking in the low 30-percent range. We were on track to equal, or even surpass, last year’s numbers.
But, in May, the weather smacked us down again with more rain, floods and tornadoes. Generator sales were good, but we lost all momentum on mower sales. Even repair work languished, as customers scrambled to deal with one weather-related crisis after another.
Historically, the bulk of our new mower sales happens from February through May; after June 1, sales drop to a trickle for the rest of the summer months. But this year, June brought hot temperatures, and the rain settled into something more seasonal. We have been able to recoup some of the sales lost in May. However, in order to keep momentum going, we have become very aggressive in our pricing. Machines are moving out the door, but our margins are low.
In summary, the first half of 2011, though erratic, has been slightly better than last year. Customers are in the mood to buy, and financing has become less of an issue.
I would like to think that this trend will continue through the summer and into the fall.
I would like to think that. Unfortunately, I expect sales to go flat mid-summer and stay that way until the end of the election cycle in 2012. There is just too much uncertainty and bad news out there to keep this consumer buying surge going indefinitely, and when it goes flat, it’s going to stay flat until some event gives consumers the confidence to buy again.
I’m reminded of the old adage, “Make hay while the sun shines.” The sun is shining now, but I see clouds on the horizon.
— Roger Zerkle, owner
Flat Rock, Ill.
My service business in 2011 exceeded all expectations in the winter because we had almost eight months of unrelenting snow, ice and cold. Our little shop repaired over 175 snow blowers, and surprisingly, they’re still coming in June.
Service work on summer equipment is nearly triple former years. Much of our new business results from the WEBsites and Google searches.
— Flute Snyder
Hudson Mower Doctor
We were pacing a little behind budget for first quarter, but caught up in May. June has been promising so far, but weather has been working against us all year. But, it looks like summer has finally come. I ‘beefed’ up my inventory when most of my local competitors were slimming theirs down — I have been getting a bit more sales due to that, but our store has always been perceived by maintenance contractors to have better customer service and fair pricing.
— Ben Chisholm, sales center manager
Horizon Distributors Inc. #520
After a great 2009 and 2010, this year has really “hit the skids.” It’s been like someone turned the switch off! We are doing all the things that have kept us growing, maybe even a little better, but gross revenue is off almost 50 percent. We have met income projections only four weeks this year as of 6-11-2011, and I’m living off of my income-tax refund and taking zero home! Just wish I knew why.
— Dean Davis
Dogwood Fireplace & Lawn
We are 14-percent up in sales for 2011.
Cost of goods (COG) is 19.5-percent higher in 2011.
Our net gross profit is 5.64-percent lower in 2011 from the same time frame in 2010.
Products have cost more this year than last, and we can’t charge as much for them because of the economy.
Expenses are up 9.8 percent in 2011.
Everything is more expensive in 2011
So we are still showing a profit, but 54-percent less than last year.
This has been our best first half in three years. The cold, snowy winter helped. The cool, rainy spring weekends hurt. However, consumer interest seems to be up. In our shop, we are getting fewer requests to “Just get me through the season.” We are still seeing quite a few mowers retrieved from storage as homeowners continue to drop lawn-cutting services.
On the rental side, the equipment needed to build patios and decks has been busy, a sure sign that homeowners have extra money to spend.
— Rob Leiser
Leiser’s Rental & Sales
A snowy winter brought lots of snowblower sales and service work, helping the first half of the year. I am ahead of last year and hope to remain that way for the entire year. Compact utility tractors have been selling much better than the previous couple of years because of some huge rebates. I need the manufacturers to keep up the rebates and financing plans in order to keep the customers coming in.
— Daniel D’Arcy, president
Due to an extreme lack of rainfall this year, we have seen a considerable drop in both service and new sales for the first quarter. If we don’t see some rainfall soon, the same will be said for the second quarter as well. It is my understanding that a good part of Florida is experiencing the same. However, these circumstances have afforded us the time to re-think about alternative marketing concepts that either we never had time for or never acted upon. You know the old saying, “When the going gets tough, the tough get going.” And that is exactly what we are going to do. Be positive and call on every public works location, major landscaping companies and don’t forget about sitting at the local gas stations in the morning when the private lawn care guy is fueling up for the day. Damn the torpedoes, full speed ahead.
— Carl Johnson, partner/owner
A to Z Mower Inc.
Port Charlotte, Fla.
Always a challenge; we thought it would never quit raining and it’s still raining!!! And I would never complain about rain, but with the cold this spring, it made for a slow start. April 15 has been the normal mow start time in our area; last year, it was pushed up to April 1, but this year was May 1 due to cold weather. So, we lost April, and that’s one of the BIG 3 to make money. Now, we’re well into June and still good rain. If it continues, we will be fine carrying our spring into July. Sales have been good — about the same as last year for May and June. Still seeing a lot of pricing in service, asking for quotes that started with the change in economy; we have changed with it and quote everything before work begins. I actually think you make better customers and more money this way; it takes the surprise out of the work. Kubota equipment is up a bit in the mini excavators and B & BX tractors. Hustler is doing a great job this season, but having a hard time keeping up with demand. Parts business (my favorite) is up in three out of four stores. Ten-percent unemployment and still can’t find qualified mechanics or setup people. Lots of spring storms have been good for business as well. Stihl business just continues to grow and grow.
— Tom Rigg, president
Rigg’s Outdoor Power Equipment
Northern Indiana (Valparaiso, LaPorte, Mishawaka, Lafayette)
Sales are strong with no slowdown in sight. The shop is very busy and has been since the first of the year. I had to add another mechanic, and everyone is on overtime. Life is good.
— Matt Borden, owner
Ed & Matt Equipment
This spring has been good — good rainfall, lots of grass and weeds. Sales and service work picked up early in February and was good up to April 15 (tax day), then slowed a little. Then, $4 gas has taken some toll on business activity. Lawn mower sales have been slow.
— Phil Babcock
E.G. Babcock Co.
Our sales are above what I had predicted for this year so far.
— Chuck Smith, president
Wabash Power Equipment, Inc.
EDITOR’S NOTE: How did your dealership fare in the first half of 2011? Please let us know by sending an e-mail to OPE Editor Steve Noe at firstname.lastname@example.org.