February '20

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20 THE SHOP FEBRUARY 2020 both inside and outside the sport that can affect aftermarket business. Keeping an eye on certain indicators, however, can help shop owners stay ahead of the curve. "Well, shops' biggest challenge that they have been fighting for years is mail order catalogs and online merchants," Rueckert believes. "Oftentimes, the online price of aftermarket parts is virtually the same as the wholesale cost that the speed shop is paying. Small shops don't have the buying power (volume) of the big catalog shops, and the online shops have lower overhead so they can sell at much smaller margins than a traditional speed shop. For the racer that still loves the experience of going to the speed shop, the convenience and the camaraderie is worth the extra price." The same goes for smaller engine builders battling an influx of crate motors and larger engine builders looking to dominate the market, he adds. "Even though a smaller builder can usually make more power and offer better service, most of the time low price wins mindshare with the racer. The margins on a full competition race engine being built by a small shop are under pressure," he says. "And, on the fuel side, shops are having to deal with racers buying E85 at the pump and calling it a racing fuel." While shops can't control competition, they can control the products they stock, notes LaFleur, making available inventory an important consideration. "The biggest challenge we see is pro- viding customers with the products they are looking for," he says. "When customers come in to purchase a product and it is not on the shelf, in most cases, they walk out and look someplace else. That is a challenge we all face." Another edge small shops have is their experience and expertise, which makes finding and keeping good help a priority, says Fisher. "I believe that the biggest challenge is more of a perennial one—not just for 2020—that being finding quality, dedi- cated employees," he says. "It's no secret that machinists are in short supply. There is a shortage of quality welders and the landscape of how people purchase prod- ucts is changing at a dramatically quick rate. How to effectively respond to those shortages and changes is the real challenge." Do you want some good news? How about being too busy? "The biggest challenges that engine shops are going to face is the influx of customers who want upgrades," Baldwin predicts. "Once spring hits and everyone has knocked the rust off from the off-season, I believe shops and mechanics are going to have full schedules for upgrades. If one person has major success with a certain product, then everyone wants to get their hands on one." SELLING TIPS Speed shops compete for sales just as fiercely as competitors compete on the track. The manufacturers offer advice to gain that competitive edge. "Shops need to focus on employee devel- opment and delivering a high level of cus- tomer service," advises E3's Fisher. "A good shop is a resource for a racer to make their performance better and safer, which trans- lates into that racer having more fun and continuing to stay involved in the sport. Therefore, the shop owner has to make sure that all of their employees are highly knowledgeable in that shop's specialty. Businesses that are able to do that will be the winners over the long haul." Racer counts are strong, and fans continue to come out to drag racing events. (Photo courtesy E3 Spark Plugs) KEEP IT STRAIGHT When it comes to increasing business with local racers, it is important to help them make educated choices and purchases. (Photo courtesy Skylar Drake—Holley/MSD) While shops can't control competition, they can control the products they stock so that when racers visit, they leave with everything they need. (Photos courtesy Lucas Oil Products)

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