From Mom & Pop Shop To Multi-Channel Retailing Giant
A typical dealership Iron Pony Motorsports is not. Chris Jones got his start in the industry in 1974 selling only motorcycle parts and accessories out of a corner of his dad’s auto parts store. Sales grew, along with his vision for the future. Several years later, Chris and his wife Tammy bought out his dad and took over the entire operation. Today, Iron Pony is what marketing director Frank Lark calls a “multi-channel retailer,” focusing on every possible channel to sell powersports vehicles, parts, apparel or accessories.
Jones never intended to get into vehicle sales. He was perfectly content with the parts and accessories side of the business, but then opportunity knocked… and kept knocking. Currently, Iron Pony encompasses more than 133,000 square feet of space, with half dedicated to their franchise brands including Indian, Yamaha, Kawasaki, Honda, Beta and 11 other OEMs. The P&A “superstore” occupies the rest of the building, a former Super Kmart.
“I like having many different brands, even though it creates some headaches because every OEM has different end-of-month accounting needs and assessments they want. Each one wants to see things like door counts. Well, a door count on a store like ours is entirely different than a typical dealer. If you look at our door count of 2,000-3,000 swings a day, OEMs look at it and say, ‘you should’ve sold 175 motorcycles that day.’ Well, no,’” Jones says with a wry smile.
Door swing conversions aside, having access to 16 different OEMs means Iron Pony will always have something that sells. Every year Jones says a different brand has the vehicle people want. “Sometimes you don’t even see it coming.” Last year it was Kawasaki with the new Mules and FXTs and FXRs. “Out of the blue, those side-by-sides sales went through the roof! They hit a market around here for the five- and 10-acre guys and gals who have horse farms because they have power steering and big cup holders. They drive like a car, and you know they make sense for these customers. So our Kawasaki sales more than doubled last year. But then some of the Vulcans with their Ergo Fit Kits started selling, too.”
Lark thinks that it is because Kawasaki and Yamaha started taking chances over the past few years and it’s beginning to pay off. “Does Yamaha and Kawasaki miss? Absolutely. But guess what? They took chances. They tried stuff. You’ve got to give them credit for trying.”
In an effort to be a full-circle dealership that not only sells you the bike but shows you how to ride it, too, Jones started the Iron Pony Riding Academy to help train new riders. “What we wanted to do was a little different than Harley who, to their credit, supports some of their dealers’ training efforts.” By different, Jones is politely saying better. “We buy the bikes on our dime. We pay the instructors to teach the MSF curriculum on our dime.” And Jones notes that not everyone passes the course. Before anyone passes the Iron Pony Academy, they have to know the basics and be able to ride… Iron Pony wants repeat business, not some statistics.
Another part of their vision for the future stared them in the face every day for years. After Iron Pony moved out of its original location, which was less than 10,000 sq./ft., they found a mid-sized building down the street with 24,000 sq./ft. Upon the move, Chris says that they didn’t even need to purchase more inventory. “We just spread it out a little bit,” he jokes. From 2000 to 2004 Iron Pony operated from a building less than a mile from the current location.
“I used to come in and think of how we could buy that building one day,” he says. Then miraculously the giant Kmart closed down. “We moved up there, took a chance, and it worked. Customers responded almost from the day we moved in!”
It wasn’t easy and it changed the way Iron Pony did business. “Look at that extra overhead, the extra people and extra computer systems… it was a big deal.” Big expenses required some Big Box thinking. “When we moved into that store it was the first time we departmentalized everything. We had a real receiving department, an HR person and so on. That didn’t mean Cory, Tammy and I weren’t still packing boxes at night and making runs to UPS. And if the floor got busy, we were always there to help.”
But it did mean branching out into e-commerce. When they first moved, their e-commerce business was not like it is today. Jones says there just weren’t as many small- to medium-sized competitors, so they had a larger slice of the online market. “Online sales were a good part of our business then. But back then there weren’t as many players. There were some huge players, but there weren’t as many small players. Now people can just create a web page and buy some warehouse space and call themselves a business.”
Speaking of change, many manufacturers have rolled out MAP policies since Iron Pony entered the e-commerce world. It may sound crazy coming from someone with a large e-commerce division, but Jones is all for MAP. “I love MAP policy because that holds more for everybody. If you’re going to make a product that should be $70, it’s $70. “I still have to argue with a few mid-sized distributors and manufacturers who do these ‘MAP holidays’ around Christmas time, Black Friday, Valentine’s Day and so on… I always ask, how does it help me? It doesn’t help me, it helps them! It moves more product through the pipeline, but at a lower margin for me.” Jones says a MAP holiday or exception should mean a smaller margin for the distributor or manufacturer, not the retailer.
While negotiating the cyber highway, Iron Pony happened to become a destination dealership in the real world when they moved from 20,000 sq./ft. to the Super K’s 100,000 plus sq./ft. as CFO Cory Atwood and VP Tammy Jones was establishing the mail order/e-commerce side of the business. The Iron Pony Powersports dealership and Iron Pony Motorsports superstore have gained a nationwide presence, and people come from all over the country to visit and buy products, bikes or service.
Jones says that most people who come in for the first time are blown away. “They will spend a couple of hours wandering the store. And service customers often shop in the Superstore while the work is being done.” A far cry from the corner of a local auto parts store, this multi-channel retailer sounds like our kind of shopping mall!
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