The Churchill twins of Frank Kent Motor Co. in Fort Worth, TX, invested $1 million to open Frank Kent Pit Stop. While much of the accessories that one would stock for such a business can be acquired on float from manufacturers, cash on hand for operations must be considered.
“Starting a stand-alone operation like this is a big leap of faith for a dealer and it was for us,” says Will Churchill, who pushed the Pit Stop idea to his family for years before it opened in 2001. He has championed the family business ever since.
Accessories can be big business for dealers.
The accessories market has been growing remarkably over the last 10 years, according to Specialty Equipment Market Association (SEMA), from $16.66 billion in 1995 to nearly $29 billion in 2003.
New-car dealerships enjoy just 17% of this big pie, which leaves a large slice remaining for dealerships to capture from the specialty installation outlets, automotive chains and mail-order accessories outlets that together command the market.
According to SEMA, the hidden profit available to dealers who sell accessories is found in the comparison in markup between aftermarket accessories and factory-installed ones. SEMA notes that dealer profit on factory-installed accessories averages about 10% to 15%.
Dealer profit on dealer-installed accessories, however, is 50% to 75%. Consumers on average spend more than $1,000 per vehicle to accessorize vehicles, with independent operations getting much of the business.
Especially for a stand-alone operation, such as a Pit Stop, success depends on having the right manager. This type of operations needs executive authority — the dealer or the general manager — and this individual needs to respond to the needs of the accessories and reconditioning center you're creating.
“The dealership service people can view it as competition, if not handled right, rather than a resource to outsource the kind of work the services departments would rather not do anyway,” Churchill says.
At the Pit Stop, employees wear NASCAR attire, and each is known as a pit crew member.
After trial and error (that included a lounge for presenting accessories to customers) the Pit Stop settled on the traditional counter concept for marketing products.
“Accessory customers like being at the counter and in the middle of everything,” Churchill says.