S. 148:Discount Pricing Consumer Protection Act
and
H.R. 3190: Discount Pricing Consumer Protection Act of 2009

Your article is interesting, however I think it is dangerously making some very wrong conclusions.

Your scenario:

“: Helmet I sells for a MAP protected MSRP of $450 and dealer cost of $292 (profit: $158)….”

Sounds great in theory, however business does not operate in a vacuum. You are able to sell the helmet for whatever you want in your retail store, but without protection online you end up with a ‘race to the bottom’.

That internet pure play “pajama dealer” (one guy in his apartment drop shipping helmets) is now going to advertise the same helmet with free shipping at $30 above cost. He has no overhead, so why not take $20 to move an incremental unit?

Your customer will see your price of $380 and think ‘gee thats great, now let’s check Google quick and see if he anyone else has it lower’.

This happens all the time with the non-MAP protected items already. Are the Brick / Mortar retailers doing well with those brands? I guarantee you they are not. Are the BIG internet players doing well with them? For the most part I would say no, they do not even bother with them. The business is all being done by the small-mid internet players that are willing to to make 10-15% on the sale.

If you look at the big players (bikebandit, motosuperstore, even Dennis Kirk) aside from closeouts they are not competing on price. They are competing on selection and service.

I only stock and push brands that are MAP enforced, it simply is a losing proposition to make an investment and stock product that a customer is going to come in, try on and then simply go home and buy it at 10% above cost online. That is exactly what happens with non-MAP enforced brands.

Without MAP you are always going to have the “pajama dealer” issue, which actuallyis just as dangerous to the big internet players as it is to the brick and mortar. And in my opinion the ‘pajama dealers’ pose more of a threat to the brick / mortars then the big internet players even do.

Think about it, in-store you can offer any price you would like. If the big internet guys are offering the product at a MAP controlled price online you have the opportunity to win on price every time, or at least be on par. Without MAP, there will ALWAYS be a pajama dealer offering the product at a price which does not make economical sense to offer (for a business with overhead!)

Oh, and if the doomsday scenario happens and someone like Amazon or Walmart is selling direct? You better hope there is MAP still intact or we can all say good night.

The social work / mental wellness industry is another great industry plagued by the perceived “coolness” of their field. Only in their case, it isn’t how cool it is to be around fast and loud machines, but instead how cool it is to help those in need.

A few months ago I interviewed with a company in the wellness industry to be hired on as a marketing exec. The company was manged and owned by ex social workers and supplied services to large public and private institutions to promote mental well being in their client’s employees.

The interview went great, by the end of it they were sure I would be a fantastic addition to their team and we began to negotiate compensation. Their offer? $25k a year. Not too terrible for a kid working his way through college or an intern, but for somebody they we’re going to hire as a marketing director / manager? Come on… fast food assistant managers make almost twice that.

So I did what any reasonable individual would do and laughed. I laughed hard and for a good while.

Once I was able to catch my breath again I asked them if they we’re serious. Surprisingly, they were. Their reasoning? They were very competitive in their industry.

They explained to me that a social worker with 5 years of experience and a masters degree typically doesn’t make much more than $30k and since I didn’t have my MSW, they thought they could pick me up for less. This was coming from a company that acknowledged just 10 minutes earlier that their current team of ex-social workers were somehow failing to achieve their marketing goals.

I’m sure a background in social work is important for client relations – but for writing copy, designing promo materials and placing media? It’s not important.

I’ve written plenty of successful copy for financial advisers, but I don’t have a series 7 license. I didn’t need it for the capacity I was hired. If you think about it, the entire freelance creative industry is based on this premise.

I don’t care what industry you’re referring to, a successful manager understands the importance of discovering their company’s weaknesses and hires the best individual that they can find to fill that niche. They also understand that the only way that you can attract those individuals is to offer them compensation packages based on the field of their expertise and skill set, not comp packages based on the industry that they are in.

Cheers!

LinkedIn discussion is here: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=139818&discussionID=16968203&split_page=1

I’ve been lurking here for a few days reading these replies. For the most part I’m encouraged by what I’ve read. This has been a topic that’s been stuck in my head since I started working in this industry a few years back. I actually think it’s one of the most important factors in the eventual success or failure of the business model for powersports here in the US.

So much so that I wrote a column on it in Dealernews… http://www.radicalpowersports.com/selling-online-38-you-get-what-you-pay-for-hiring-pt-i/ and http://www.radicalpowersports.com/selling-online-39-you-get-what-you-pay-for-hiring-pt-ii/

From my perspective it’s interesting because I came to this industry, and have remained active in it, for one, and only one reason; motorcycles are cool. So I would put myself in the “enthusiast” column. It’s certainly not for the money, women, or fame.

However, I’ve never been able to shake the feeling that so many of the “problems” we have could have been avoided or at least mitigated if it was a little _less_ populated by “enthusiasts.”

[over-generalization alert!]

On of the problems seems to be that the pool of folks that want to work at a dealership (and are _willing_ to work at a dealership) is mostly populated by The Young, and The Old.

The Young typically seem to be kids that are into powersports, but have never really been all that interested in things like school, business, etc. I’d say that most 18-25 year olds that WERE into those things are not willing to work in retail in general, and at a motorcycle shop in particular, unless they are quite a way out on the tail of the distribution or have some kind of unique circumstance.

Most of their previous jobs were at Jamba Juice or delivering pizza. They land a “dream job” at a shop and for a week or two it’s the coolest thing they could possibly imagine!

Eventually however something happens and they realize that it’s still a job.

You know… Work.

They have to deal with customers…

Motorcycle shop customers…

They have to be somewhat “professional”. To make matters worse, they often are managed by a boss (owner, GM, etc.) that has, as Mr. Banks pointed out, an attitude of “You’re working for (add your Big Brand here), you’re part of a global phenomenon… you should be paying us to work here.”

I think it’s pretty obvious that The Young could be helped out if they had management that knew how to actually manage (educate, motivate, mentor) _people_.

Heck, even go-getters out of college getting a job at a Fortune 500 company are basically worthless until they get properly mentored by decent managers. There’s probably not a lot of high-ranking officers in those top companies that made it there through a succession of crappy managers.

The Old are “enthusiasts” that are retired, semi-retired, etc. that are looking to get into the business they’ve always been passionate about. They typically know their stuff when it comes to bikes, riders, gear, etc. etc. However, they are (often) not working there because they _have_ to. They want to walk into a building full of motorcycles everyday and talk to other motorcycle folks.

Again, that’s not a bad thing. It’s actually a potentially huge asset. However it presents some very unique and difficult management challenges when it comes to things like motivation, education, etc.

Hell, managing just these two disparate groups of “enthusiasts” would present a serious challenge to the best managers out there regardless of industry or education level.

How’s a person that’s never been managed by a good manager themselves, never received the education necessary to know how to properly manage or lead, etc. supposed to have a chance to become a good manager themselves? Luck? Good genes? Divine intervention?

A good manager is not just someone that knows the part numbers to rebuild a carb from 1970 or knows how to do co-op paperwork. Functional knowledge is not enough to make a good manager.

The good news is that exists plenty of educational and training opportunities (some even developed by and for our industry) that teaches people how to actually become good managers/leaders.

Now back to technical knowledge…

The requirement of in-depth technical knowledge in our industry makes things even more “complicated”.

Customers (especially the internet-forum reading, club president’ing types) HATE it when the poor girl on the other side of the counter can’t tell them off the top of her head exactly what brand of oil a manufacturer recommends for break-in after rebuilding his 1949 P.O.S. that no one has ever heard of…

“I’m sorry sir, I just answer the phones here… Please stop yelling at me.”

Add on top of that the insane amount of parts, apparel, gear, etc. that are available in our industry… I’m amazed every time I look through Dealernews’ annual directory!

So you essentially need to find an enthusiast that is capable of significant internal motivation to learn an insane amount of technical and trivial detail, is an excellent people person, is reliable, and is willing to work for less than they could be making selling hot pretzels in the mall…

Yet we still have folks in our industry that say stuff like (sorry Jim, I’m just offering up the other side): “Unfortunately, most dealership employees seem to lack the professionalism neccessary to make themselves valuable to their employers. Beyond the enthusiasm, employees lack the determination needed to transform a dealership into a viable business.”

Most shops don’t pay very well, offer much in the way of benefits, etc. A lot of GM’s and owners have somehow convinced themselves that they can pay less than what a guy makes at the Boost Mobile kiosk in the mall because again, they perceive that the motorcycle shop lives in a parallel universe where “coolness” has tangible value when it comes to buying food, paying rent, or paying for insurance.

Until this industry realizes that’s complete self-delusional B.S. there’s going to be problems. I’ll offer up, with myself as Exhibit A, that there ARE people that recognize that there is a premium value to being in this industry, but I still think it’s a mistake to build the entire industry on that belief.

The good news is that there are now good people out there that could function very well as managers that are looking for work that could be valuable in building out a strong organization.

[flame: on]