How to set up your own accessory department

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Ever wonder how to start the ball rolling on an effective aftermarket program in your dealership?

Several hundred people had the same question as they listened to four dealers with successful accessory operations on how to tap into the huge profit centre during SEMA’s second annual Dealer Day last week.

Populating the four-man panel was Steve Lagerquist, Zane Clark, Larry Branche and Mike O’Neil. The store sizes ranged from just a single Toyota dealership to dealer groups with over a dozen stores. The men also represented three of the country’s corners with East Coast operations both north and south and Clark who works out in California.

What follows is a cross-section of the discussion on best practices and tips on creating a profitable accessory system in your dealership:

Getting started

The consensus was that a few critical steps needed to be taken before getting any kind of accessory procedure in place.

Branche, who works with Fitzgerald Auto Mall with dozens of stores in Maryland, Pennsylvania and Florida combined, was adamant about having a solid web-based program for the shop.

According the Branche, the Fitzgerald Auto Mall is looking at upwards of “$15 million in accessory dollars this year” and the Insignia system they run has “greatly helped” with the process.

“We needed something to pull it all together, and the Insignia system really laid the groundwork for putting everything together. It was an organized way to measure what we’re really doing,” he said.

Clark from Martin Cadillac GMC Saab said it was also vital to have your whole team on board with the idea of offering aftermarket products during the sales process for both new and used cars.

He said things like incentive programs for sales associates or groups in the office would go a long way to harbouring some excitement about taking the plunge.

Think about your products

Like with many successful retail chains, regional knowledge helps make money when it is used properly.

If you do decided to commit to an accessories program, do your homework, said O’Neil. Know what will sell in your area and what people want as options.

Heated seats and remote starters are big in colder climates, he said, adding that spoilers do well too. The panel suggests looking at what sells well in your region before loading up on parts through your OEM or the aftermarket sector.

“Your inventory should be driven by customer demand,” explained Lagerquist. “Once something starts selling, put a few of them in stock.”

Clark said stereo upgrades are big in California.

Dealers with a web-based accessory list already in place can monitor the traffic to see what customers are looking at online and then tailor the supply to meet the demand. Plus, gathering that type of information will help with orders in the next year.

When to introduce the program

There was a little uncertainty in the room about when to broach the subject of the accessory options with a customer. While some felt it was better to save the discussion for the end of the negotiation, others, like Clark were adamant about introducing the program early in the sales negotiation process.

He argued it should not be brought up at the end of the sales discussion because the customer would be “tired and drained” and not want to hear any more about how the price will go up. Oppositely, if accessory options were provided after the customer was “emotionally committed” to buying the car, the price increases can be rolled into the total and not seem like an expensive add-on.

“They have finally gotten to a price they feel comfortable with and it will be hard to start throwing a lot of extra stuff on,” he cautioned. “Introduce it earlier when they are still excited about the process.”

Lagerquist echoed the statement of “early introduction,” saying it could cost you more accessory sales if you wait till the end.

Show it off

All the panelists warned against tricking out a vehicle and sitting it on the lot simply because it can become tougher to move with all the customization.

Try instead to find a solid computer program that sales associates could use and see the part on the same model in real-time was the best suggestion for showcasing the products.

Decking one vehicle in all of your shop’s wares could act as a good advertisement, but it may end up being a vehicle with a long lot life.

Avoid cluttering up your showroom with dozens of pieces too. Pick a few that sell well and showcase them in a clean and streamlined display. Leave the entire inventory for the web and the parts department.

While all four admitted to not using social networking programs like Facebook and MySpace, they felt hosting a grassroots club for each of the accessory group that could potentially frequent your store – outdoors enthusiast, high performance gear, utility parts, etc. – could be an excellent way of getting the word out.