Following the merger with Tucker Rocky , one of the steps taken by MAG was to fold the remaining sales of Motorcycle Superstore into a J & P structure that is based on three primary channels - online sales through the J & P website which , at 70 percent of sales , is by far the largest channel ; the 100 plus sales agents that J & P has at its Daytona call center , which delivers another 20 percent of sales , with the remaining 10 percent coming through its three year-round brick and mortar stores ( Daytona , Sturgis and at the former headquarters at Anamosa , Iowa ) and its burgeoning mobile retail presence at the major rallies and other events . Speaking about the impact that the filing process had on J & P , Zach Parham , company President and son of founders John and Jill Parham told AMD : “ We managed to almost entirely maintain our fill rates throughout the filing process , so the impact to our customers was minimal . “ The only real impacts for us were with some of our vendors . Most of the people we buy direct from realized that J & P was a sound and solvent business , but we did end up causing some of our vendors a cash flow issue and some of the smaller ones were inevitably hit quite hard by the filing - but mostly I think we were able to maintain goodwill and find a resolution . “ By February or March , we were current with all our direct vendors . The U . S . Trustee had final decision in who was paid and how much . MAG as a whole was able to pay the majority of industry vendors in full and 100 % of what was allowed by the U . S . Trustee . We
‘ 50 % from the
are grateful to our partners that worked with us through that process and thank them for standing by us . “ We saw some softness for a couple of months as the process played out , but that mostly on a regional basis , and largely weather based . “ Regardless , the filing became a big topic and , under those circumstances , whether or not you are doing well gets clouded by the headline news . The inventory build-up delays we did experience were largely the result of perception - initially some vendors were cautious about continuing to ship , which was quite natural . But for the most part we were able to serve our customers throughout and really saw no effect , to be honest . “ As it happens , we couldn ’ t have emerged from the process at a better time . We had said we hoped to be out by March or April , so being able to keep our word was huge . We are up on last year - in both volume and revenue . May was the biggest month J & P Cycles has ever had , we were up in June and July , and following a very strong Sturgis for us and the vendors who partner with us there , it looks like we ’ ll be up for August too . We are continuing to grow in a down market across all three of our channels .” J & P buys around 50 percent of its inventory from the primary three distributors in the market , including the product they need from Vance & Hines , Performance Machine and the other MAG brands . “ We are a retailer , not a distributor . We retail to the consumer , so do not expect to buy at the same or better prices than distributors . J & P has always been very careful to maintain that line . Hopefully we buy well , our volume should mean that we can get the best pricing available in the market , but we do not leverage our buying power any further than that , and we do not abuse our MAG relationships . We are focussed on the other positive competitive advantages we have . Price is important , but service is everything .” One of those advantages , clearly , is scale . But it wasn ’ t always that way . When John and Jill Parham started their adventure in 1979 , it was a very different world , a very different market . The focus was on parts for older bikes , buying , selling at and running swap meets and ‘ old timer ’ events around the Midwest and their home state of Iowa . The annual swap meet that they staged for many years at McCormick Place , Chicago , was a major event for many years , though gradually , as the market changed , John and Jill pulled back from events and used parts , successfully transitioning the business to retail , building up a huge national following for their annual mail order catalogs ( indeed international following - 10 percent of sales are still overseas ). Fast forward to now , and while J & P do still print
Another competitive advantage that comes with scale is access to the Tucker Distribution Center network in the United States . “ Efficient retailing on our scale is as much about touching a product as few times as possible as it is about anything else . We are able to use the five Tucker warehouses . They touch the product once , drop-shipping the inventory we buy from them direct to our customers . Tucker has improved its fill rates and reduced ship times this year to be better than ever , which has helped us improve our customer experience . “ The inventory we buy direct from vendors and other distributors is more than 50 percent of what we sell , and we receive that direct at our own 250,000 sq ft Louisville , Kentucky warehouse and ship to consumers from there . “ Overall more than 70 percent of our shipments are getting to customers in two days or less . As with everyone else , it is all about getting the product to the customer as quickly as possible .” Returning to the three angles of attack J & P has , its three channels , Zach is especially enthused about its store and event business “ as that gives us the chance to be in front of our customers - to hear what they are saying about their riding , their bikes , their lifestyle . The Iowa store is open year round , and the annual rally we host is the largest motorcycle rally in the state of Iowa . “ Our Tour Truck program consists of two 53 foot semis at 12 events a year - the three big ones and others that give us a good geographical spread . We have anywhere between five and 15 of our own mechanics and techs there with us .
primary distributors ’ |
catalogs , late model and vintage , the center of gravity has moved decisively online and to the website , with social media a major tool for communicating with ‘ home wrenchers ’. Altogether the business offers access to some 100,000 SKUs - from the market ’ s well known vendors , of course , but J & P still has a reputation for the more specialized and harder to source replacements , especially for older models . The core business remains Harley-Davidsons , but Indian Motorcycle accessories are growing , and the company has a strong presence in the metric cruiser market and especially with Honda Gold Wing enthusiasts . |
‘ service is everything ’ |
The company reports having had an excellent Sturgis rally this year
“ We are trying to give our customers a genuine retail experience on the fly , so we look at what we do as really being a mobile showroom . This year we acquired thousands of new customers from our Tour truck events . “ At some of the events we set up with the Vance & Hines truck too , so then it is really a three-truck critical mass . We are fully committed to the Rallies for the long term - so long as our customers keep going , so will we . For the most part we are getting the traffic we need at the events to show record sales . “ It is our long-term intention to have retail stores , and the year-round presence at Sturgis and Daytona is a big strategic advantage . Our call center is upstairs above our Daytona store and , as with the rallies , we get a huge amount of rider feedback with our team through there too . “ Our people are not just “ call handlers ”, they are our eyes and ears . For our customers they are a genuine industry resource . They mostly ride - and we encourage that - and the training they get is as regular , comprehensive and intense as we can make it .” Asked about the future and the changes he is seeing , Zach said that “ J & P has been 90 percent Harley most of its life . It grew as Harley grew . But in the last five years we have started to see that shift . First with Indian motorcycles , and that is growing for us , but also now with new customers looking for parts for different platforms , and with the growing number of parts we are carrying for metric brand street bikes .
28 AMERICAN MOTORCYCLE DEALER - SEPTEMBER 2018 www . AMDchampionship . com