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Ride West BMW owners Ann and Keith Thye learned their neighboring competitor, Tacoma BMW, was up for sale just before packing up their K 1200 LT for a tour through California's Gold Country in the summer of '03. During the trip a quartet of young women U-turned their van directly in front of the riding couple a few miles outside Downieville, California, on highway 49, leaving Keith a Hobson's choice.

"There was just no hope," says Keith. "We plowed into the left front wheel well and went flying over the hood. Ann ended up with 14 broken bones and a sliced liver. I smashed my right shoulder and broke my right arm. The bike slid across the road and ended up in the middle of the Yuba River. But we are a walking tribute to having the right riding gear on."

Following the double helicopter evacuation, Ann spent two weeks in the hospital and another two weeks in a nursing home, all the while weighing the options over what to do about their competitor's store. "I had plenty of time to lie around and think about it," laughs Ann. But when a known discounter expressed interest in purchasing the dealership, the Thyes considered their options depleted.

"Frankly, we didn't want that kind of competition, so when they called us and asked if we would be interested in buying, we didn't even take 30 seconds before we said 'Heck, yes,'" Ann says of the decision to increase their powersports dealer network to two.

Building a Swan

BMW stipulated that the Thyes had to relocate the new dealership within 18 months of the purchase.

According to Ann, while driving the freeway between Seattle and Tacoma to negotiate the deal, they kept passing a building in the city of Fife wearing a large For Lease sign. The Thyes wanted to move the business to Fife, and BMW had suggested Fife, so the location seemed promising.

Leasing the ugly yellow warehouse wasn't an option, but the owner--having just received a letter informing him the furniture company that was contracted to a 15-year lease had just gone into receivership, and if he wanted any further rent payments he'd have to go to court--was willing to sell the structure. After purchasing the warehouse, Ann and Keith called the contractor they used for Ride West.

"He was available and ready to go, so from the day we closed we had contractors in there the very next day turning the warehouse into the dealership we have today," says Ann.

The 30,000 sq. ft. building's exterior isn't yellow anymore, and the interior is a combination of BMW styling provisions and Puget Sound influences. The expansive structure shrinks the 122-foot-long hearth and massive fireplace, which were chosen as much for their comfort and warmth as for their economics. Ann had considered installing four large windows, but when she realized the windows cost $40,000, she opted for the quarter-of-the-price fireplace.

"Some of the things you see in the dealership are a departure from BMW's norm. They are allowing dealerships to become more regional in their design and architecture," says Ann. "Because of making the decision to allow dealers to go regional, we were allowed to interject some stonework, and cedar work and hardwood floors rather than the cold gray tile BMW wanted--because it's already cold and gray around here."

"We bought the business, found a building, bought the building and remodeled it in one year's time," says Keith. "And we moved over the weekend and never lost a day of business," adds Ann.

Singularity

As a single-line franchise South Sound BMW can't afford to lose a day of business. BMW unit sales in the United States for 2004 were down a lackluster 9 percent, and the R 1200 GS didn't arrive in showrooms until late in the year. Without ATVs, dirtbikes or scooters to help supplement bike sales, that type of revenue decrease isn't easy to absorb.

"We consider used bikes our second line," says Keith.

Besides having pre-owned machines year-round, Keith hosts a biannual Bike Swap. The advertised event is a chance for anyone to put his used bike up for grabs during the weekend-long sale.

"We have people bring their bikes down and leave them with us for the weekend, and we arrange it so they don't have to be here--we do the selling for them. We also take care of financing and all the paperwork and take a 10 percent commission," explains Keith.

And if the person's bike doesn't sell, Keith will often buy it for the store.

"When the owner comes in to pick the bike up we'll negotiate. Obviously they're hungry to get rid of it, so it's a perfect opportunity for us to buy used bikes," says Keith.

"Plus, we now know he has the money from the bike he just sold us, and he's without a motorcycle, so then we try to sell him a BMW," adds Ann. "We are always looking for ways to bring in people who are not BMW customers and turn them into BMW customers."

Insurance is another profit center (see "Insuring the Bottom Line" on pages 30 and 32), as are events.

"We are an event-based business," says Keith. "We have events every month of the year. We have slide shows in the winter, swap meets twice a year, bike swaps and a three-dealer fun run we tie in with two other dealers in the area with a $1,000 prize," says Keith.

Experts in Their Field

Dealernews featured Ride West BMW in the September 2001 issue. Now owners Ann and Keith have returned with a new store, a new location and an indelible understanding of what goes into making single-line BMW dealerships successful obligations.

"Over the last nine years we've figured out what sells and what doesn't in this area," says Keith.

South Sound opened with the projection of doing half the business Ride West does but is already doing 65 percent. Given that the dealership has a larger area than its sister store, that percentage will assuredly keep rising.

Dealer Data

Owners: Ann & Keith Thye

Number of Employees: 11

Years in Business: 1

Years at Location: 1

Shop Size: 30,000 sq. ft.

Dealer Management System: Lightspeed Windows

Franchise: BMW

ACCESSORIES DEPARTMENT

Manager: Matthew McKiernan

Employees: 1

PARTS DEPARTMENT

Manager: Darren Thackery

Employees: 3

Department Size: 2,000 sq. ft.

SALES DEPARTMENT

General Manager: Brendan Ferrer

F&I Manager: Wayne Elston

Sales Employees: 2

Showroom Size: 10,000 sq. ft.

SERVICE DEPARTMENT

Manager: Larry Vevig

Technicians: 3

Department Size: 9,000 sq. ft.

Shop Rate: $72 per hour

Business Hours:

Tuesday-Friday, 9 a.m.-6 p.m.

Saturday, 9 a.m.-5 p.m.

South Sound BMW

3605 20th St. E.

Fife, WA 98424

(253) 922-2004

Fax (253) 922-2006

www.southsoundbmw.com

% of Income by Department

Parts & Accessories:   18%
New Units:             43%
Used Units:            17%
Insurance:              2%
Service:               11%
Apparel:                9%

Note: Table made from bar graph.

Advertising Expenditures

Yellow Pages:            5%
Magazines:               2%
Newspapers:             25%
Billboards:              5%
Direct Mail:            50%
Military Publication:   13%

Note: Table made from bar graph.

RELATED ARTICLE: Insuring the bottom line.

What do haircuts and insurance policies have in common? Indispensability. Hair grows and requires an occasional shearing; insurance because of governmental laws mandating its use. Motorcycle insurance is probably better safeguarded than haircutting because the majority of motorcyclists would gladly give up haircuts before relinquishing their beloved bikes--many already have.

Last year upward of 700,000 new street-legal two-wheelers were sold--meaning a commensurate amount of insurance policies also were sold. Factor in used bikes and renewals on existing policies and that's insurance policy writing of carpal tunnel proportions.

South Sound BMW owners Ann and Keith Thye got involved in the indemnity racket to ensure better business at their motorcycle shop. Previously they told customers to check with their own insurance provider, or to, gawd forbid, visit another dealership that sold insurance. Now they are their own limited liability insurance company.

"We are now Ride West Insurance LLC, a recognized insurance agent in the state," says Keith, "and we can sell anything from motorcycle and boat insurance to health and life coverage. We decided we did not want to be a subagent because we wanted our name on the policy, not someone else's, and we didn't want to give any commissions away."

The process took two years before state approval was granted, and another three before becoming profitable enough to pay the insurance writer directly from insurance profits, but it was apparently worth the wait.

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