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OPE’s 2014 Dealer Survey

By Steve Noe

At Outdoor Power Equipment, we recently followed up our nationwide dealer surveys from 2001, 2006, 2010 and 2012 by conducting a similar survey. Topics ranged from hourly shop labor and technician pay rates based on skill level to annual gross income and social media use.

We sent the survey to approximately 2,500 dealers on Aug. 19, and I’m pleased to report that we received an excellent response rate of nearly 6 percent, with some dealers electing to skip a few of the 22 questions.

Realizing that the answers to a few questions would vary from region to region — especially when it comes to service technicians’ salaries and shop labor rates — we decided to further validate the results to those specific 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

Without further delay, I would like to share with you the findings of our survey with a few observations along the way. (For more specific numbers, please be sure to click on the tables at the end of this article and view them as a slide show.)

AGING OWNERSHIP

If you take a look at all of the graphics in this article, you will be hard pressed to find a more notable trend than the aging dealer population and the industry’s inability to attract younger dealers.

When we first asked about the age of dealership owners in 2001, only 18.77 percent responded that they were at least 60 years old. That figure has more than doubled to a whopping 39.2 percent this year. What may be an even more telling statistic is that nearly three out of every four dealers (76.4 percent) are now 50 and over.

Meanwhile, during the same 13-year period, the percentage of dealership owners who are 20-29 years old has been nearly non existent, and risen from a mere 1.96 percent to 2.7 percent.

Passing the torch to the next generation or finding someone outside of the family to take over the business has apparently been a major challenge facing dealers.

WORKFORCE COMPOSITION

On the bright side, I’m glad to see that although many of you are either having a hard time finding a successor or in no hurry to retire, you are deciding to hire more help.

More than half of the survey respondents continue to operate with no more than 5 employees and about 20 percent have 6-10 employees, but nearly 28 percent have 11 or more employees, which is up about 8 percent over 2012.

However, the number of service technicians per dealership appears to be about the same as usual with 46.3 percent having 1-2 and 32.7 having 3-4. Incidentally, nine out of every 10 dealers believes that there is a shortage of qualified service technicians for the industry, so perhaps that’s wherein the problem lies. Let me assure you that Erik Sides, executive director of the Equipment & Engine Training Council (EETC), is doing everything in his power to address the critical shortage of qualified service technicians as the EETC recently released a student career recruitment video.

INCOME

More than half of the survey respondents (54 percent) have an annual gross income of less than $1 million, but I was pleasantly surprised to see that 18.2 percent of dealers belonged to the $4-million-plus club. That number has nearly tripled since 2012.

Meanwhile, satisfaction with profit margins remained about the same as 2012, with nearly half responding that they found it “fair.”

SERVICE

More than half of the survey respondents are currently charging a shop labor rate of $65-$79.99 with nearly 20 percent asking $65-$69.99. Nearly 75 percent of all starting service technicians are being paid $9-$14.99 per hour, while nearly the same percentage of the best service techs are receiving an hourly wage of at least $15. Please be sure to refer to the charts for your specific region.

What dealers are willing to service remains relatively unchanged from 2012, as nearly half of the survey respondents service brands that they sell and selected others.

Nearly 84 percent of the survey respondents said warranty payment satisfaction was “fair” or better, which is good to hear.

BIGGEST CONCERNS

Out of seven possible choices, dealers said their biggest concern was the cost of operating their business, with one out of every four dealers (25.3 percent) clicking that selection. The economy was the second-biggest concern at 20.6 percent with a third-place tie at 15.1 percent between profit margin from sales and availability of quality employees. Rounding out the seven choices were weather (12.3 percent), other (6.9 percent) and competition (4.8 percent).

Since “other” topped competition, and we gave those dealers clicking “other” the opportunity to provide written responses, I thought I’d share those concerns with you as well. A few dealers said that all or more than one of the choices were a concern. Other concerns, listed in no particular order, were as follows: manufacturers and distributors demanding more and giving less to dealers, Environmental Protection Agency (EPA)/California Air Resources Board (CARB) regulations/policies, the anti-business climate in one particular state, government control, the presidential election/direction of the country, recordkeeping, taxes and paperwork.

WEBSITES AND SOCIAL MEDIA

Nearly three out of every four dealers not only have a website, but also a Facebook page for their business. In terms of other forms of social media currently used by dealers, Google+ was a distant second at slightly more than 30 percent with LinkedIn and YouTube each used by 17.7 percent of dealers.

I would like to thank all of those dealers who took time out of their busy schedules to complete the survey so that we could validate the results. I hope you find them helpful.

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