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2017 OPE Dealer Survey

By Steve Noe

To give you a barometer of how you measure up to your peers and some guidance to perhaps recalibrate how you do business, we at Outdoor Power Equipment (OPE) magazine conducted an in-depth, 28-question, national dealer survey Aug. 23-28, 2017.

It marked the seventh time since the turn of the century that we’ve conducted a comparable dealer survey, with the previous six done in 2001, 2006, 2010, 2012, 2014 and 2016. The first five surveys featured nearly identical questions, ranging from dealership owner age, annual gross income, annual income from sales of whole goods versus service to total number of employees and service technicians, hourly shop labor and technician pay rates, and biggest concerns. However, to reflect the changing times — especially with the emergence of social media — we updated the survey with six additional questions in 2016. For 2017, we repeated the 27 questions from the 2016 survey, but tacked on a 28th and final question, asking dealers to share any comments regarding the state of the industry.

I’ve incorporated many of the dealer comments in this article and included charts for the remaining 27 questions (see pages 17-22), allowing the results to speak for themselves and leaving them open to your interpretation. However, I would be remiss if I didn’t offer my own thoughts and observations.

Ownership

For the first time since we initiated this survey, the percentage of dealership owners in the 60-plus age category dropped — and noticeably too — from nearly 45 percent last year to 37.25 percent this year. Also noteworthy, dealership owners in the 30-39 age category more than tripled from 3.67 to 11.76 percent in the past year, indicating a possible “passing of the torch” movement from baby boomers to their generation X sons and daughters.

Approximately half of all respondents indicated they have a succession plan in place, but only about a third of them plan to sell their dealership within the next five years; both of those statistics are consistent with last year’s numbers. A very encouraging sign: Nearly 25 percent of dealers plan to expand their current location or open a new location within the next year — a nearly 9-percent jump over last year!

Half of all dealers indicated they carry a line exclusively, but nearly a quarter of them plan to add or switch lines in the next year. The percentage of dealers willing to service all brands jumped significantly from 36.7 percent last year to nearly 53 percent this year, indicating a softening service stance.

Income breakdown

For the second consecutive year, most dealers (approximately 55 percent) made an annual gross income of less than $1 million. Eighty-two percent of dealers indicated that 60 percent or less of their income stemmed from the sale of whole goods, and 72 percent noted that 60 percent or less of their income was generated by service.

Workforce composition

The workforce composition has changed very little over the years with nearly 80 percent of all dealerships employing 10 or fewer people, including no more than four service technicians.

Service

Realizing that the answers to the service-related questions would vary from region to region — especially when it comes to hourly shop labor and service tech pay rates — we decided to further validate the results of those questions by breaking down the responses 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

Nationally, a whopping 98 percent of dealers are now charging a shop labor rate of at least $45 per hour, and 82 percent are charging a minimum of $65 per hour. Nearly half of all dealers (48 percent) are charging an hourly shop labor rate between $65 and $79.99, and nearly three out of every four dealers (72 percent) are charging an hourly shop labor rate of $65-$89.99. If you’re charging an hourly shop labor rate of less than $65, you really should consider increasing it to at least that amount.

As for hourly pay for service technicians, 80 percent of starting service technicians are making $11-$16.99 per hour. On the flip side, 88 percent of the best service technicians are receiving a minimum of $15 an hour, with 70 percent of them getting paid $15-$22.99 per hour.

Once again, these numbers vary by region, so please be sure to check the charts on page 22 for the numbers in your particular region.

Website and social media usage

I must admit that I’m a little shocked that the percentage of those dealers having a website dipped slightly from 77 percent for the 2014 and 2016 surveys to 72.55 percent this year. However, I was pleasantly surprised to see that in the past year alone that dealerships having a Facebook page increased sharply from about 64 percent to 82 percent. Across the board, Facebook usage is on the rise on a daily, weekly and monthly basis. Less than 3 percent of all OPE dealerships have never used Facebook!

Biggest concerns

I always find the answer to this multiple-choice question to be fascinating. In 2014, the biggest concern was “cost of operating your business.” Last year, it was “availability of quality employees.” This year, it was “availability of quality employees” once again, but at a slightly higher percent, with “cost of operating your business” a close second.

The growing concern over the availability of quality employees can be directly connected to the 96 percent of dealers for the second straight year indicating they believe there is a shortage of qualified service technicians for the OPE industry.

“The biggest struggle we face in the industry is finding qualified technicians,” said Neil Adams, Neil’s Small Engine, Inc., Larose, La. “The service department is the heart and soul of any successful power equipment dealership. No matter what product you sell, if you can’t provide the service, you’re going nowhere.”

In California, an anonymous dealer echoed the sentiments of Adams. “California seems to have a lack of qualified small-engine technicians available. Escalated housing affordability in the San Francisco Bay area prevents lower-income personnel from living in the area. We should also be able to make a small profit on all manufacturing equipment warranties.”

And another dealer simply stated, “Huge shortage on qualified small-engine mechanics.”

Charlie Saul, Saul’s Lawnmower, Pilesgrove, N.J., expressed other concerns. “I think the Internet, and of course the box stores, have really hurt,” he said. “The sales have been going downhill for the last 3 years, and service is always weather driven. So I think downsizing and just repairing may be the way for us. When the box stores or the Internet sell stuff cheaper than we can buy it from our suppliers, how can we compete? But they are having a hard time with the troubleshooting and repairing — our only niche left.”

Another dealer who chose to remain anonymous shared Saul’s concerns, saying, “Lawn equipment does not belong in big box stores. Makers forgot who put them in business.”

I would like to personally thank all of the dealers who took the time out of their undoubtedly busy schedules to participate in this survey, and I hope the findings will lead to greater success for all of you.

 

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