Outdoor equipment dealerships are moving with the times. Generally thought of as a little behind automobile dealerships in modernizing their facilities, many are now actively looking at emulating auto dealerships in terms of maximizing revenue from parts and service departments.
At the same time, industry trends are creating fewer and larger dealers. Bigger dealerships are getting bigger and smaller dealerships are becoming less common. Many outdoor power equipment dealerships are finding that maximizing space and increasing volume are critical to growth and improved profitability.
For Ahearn Equipment Inc., replacing 300 existing storage shelves with 14 new high-density drawer storage units allowed them to reduce their parts department footprint by 50%, while increasing the number of parts stored. The system helped them decrease average transaction times, better manage inventory and expand sales, all without having to incur the bricks and mortar expenses of an addition.
Expand without adding real estate
Ahearn Equipment, located in Spencer, MA, offers a broad product line, selling everything from push mowers and chainsaws to specialty $150,000 excavators. Its customers are about 60% homeowners and 40% contractors; the dealership is moving to adjust the mix to be 50-50.
Mirroring the industry trend of fewer, larger outdoor equipment dealerships, Ahearn has tripled in size and simply run out of space to stock the inventory they need to support the rapidly increasing number of lines they carry. This was despite the fact that a new building was built only five years ago.
“We were in a bind and were seeking ways to expand our parts department to accommodate the larger equipment and larger parts we were bringing in,” says Jeremy Ahearn, general manager of the busy dealership, charged with making sure day-to-day dealership operations run smoothly in all departments and facilities. “With the high cost of going the bricks and mortar route, we needed another option.”
In addition to being cramped for space, the existing storage system was extremely inefficient and unorganized. Thousands of parts were stored in more than 1,200 plastic bins (300 metal shelves, with four bins per shelf).
“We frequently were losing parts that would fall out of the bins or were of odd sizes and would not fit well into the bins,” says Ahearn. The shelves were 36 inches wide, a foot deep and spaced about 12 inches apart vertically, leaving a tremendous amount of space between the top of the bin and the shelf above it.
In addition to overflowing bins and wasted space, the system left the parts vulnerable to a significant amount of dust. Though the facility was extremely clean, parts sitting in bins collect a lot of dust, so packaging is subject to fading.
Seeking to achieve a reduction in the square footage of the parts department, Ahearn also wanted to become much more efficient in finding parts and reducing lost sale numbers due to missing parts.
“We had been plagued by the fact that a customer would come in, our inventory system would indicate that we had a particular part, but we couldn’t find it when we went in the back to look,” Ahearn explains. “It may have fallen out of one bin and ended up in a different one. We really wanted to eliminate this issue.”
The freed-up space would also allow Ahearn to expand display and showroom space to accommodate their continually expanding wholegoods inventory, without adding new buildings.
Big dealer, small footprint
Ahearn worked with outdoor equipment industry consultant Bob Clements International, Inc. (BCI) to help them figure out a way to reduce their parts department footprint while still allowing them to expand the number of parts they could carry. BCI suggested installing a high-density storage system made by Lista International, a leader in the manufacture of modular drawer storage systems. Lista is BCI’s industry-approved supplier of service and repair shop and storage systems.