Record highs are occurring across the Midwest as the mild January temperatures continue into the New Year. Reports also indicate that the warm temperatures are extending farther into the east. What does this mean for dealer snow thrower inventories and repair orders? Many dealers are citing low sales as well as a decline in repairs and maintenance orders since the beginning of the winter season.
"Sales were as expected up until thanksgiving, and then the first week or two into December sales were low because of the lack of snow. Since then it has really dropped off," says Roy Magsamen of RM Small Engine Repair in Fort Atkinson, WI. "Typically I've sold 75% of my yearly sales by Christmas, and I still have probably 50% left."
Well weather reports had predicted an above average snowfall for the 2011-2012 winter season, it has yet to come to fruition. Thankfully, Magsamen kept his orders in line with the previous year despite predictions.
"I ordered about the same as the previous year, because I had a good selling season with minimal product left over," says Magsamen. "The cut off for me is the amount of units where I get my price break. I can always buy more if I need more."
Dealers usually work hard with promotions to get customers in for pre-season snow thrower maintenance. It gets them billable hours and keeps the service department on top of things when the weather hits. While preseason maintenance was strong, it has slowed.
"My preseason preventative maintenance business was good and strong up until December 1, when most of the people who are thinking ahead get their equipment in," says Magsamen. "But after the first it requires snow. Then those people that have equipment in the corner of their garage and think they stored it properly and count on it to start when it snows come in. They haven't even had the chance to learn it won't run yet."
Running sales promotions to get traffic in the showroom has worked some for Magsamen. However, as the season continues, you can only get so aggressive with pricing in an industry with such tight margins.
"I normally don’t have a problem selling at the manufacturers' suggested promotion or sale price," explains Magsamen. "I've been running an ad in the paper since the second week in December for another 10% off the already low sale price and plan to do the same in Janueary. I maybe sold a dozen units that way because people want to take advantage of the extra savings."
On to the Next Season
Whatever is left over at the end of the season will carry over into the showroom next year at RM. Magsamen says he will order the same as he has previously, but take into account what left come spring.
"I know what units are going to sell and how many if there is snow on the ground," says Magsamen. "If I normally order 15, 10-hp snow blowers, and I've only sold seven of them, I'm going to order another seven. I'm not going to say 'I only sold seven I'm going to stick with eight I have on hand'. I want 15 of those no matter what. Right now I'll focus on getting through January, and at that point we might as well start thinking of spring."