Thursday, April 11, 2013

Mustard & Mayonnaise

Accessories are a tough nut to crack – selling them effectively in a dealership requires coordination between Parts, Service, and Sales. Easier said than done. So when an aftermarket company offers to take all of the hassle out of managing this part of a dealer’s business, it’s a pretty compelling proposition.

I’m talking about Vogue Tyre, an aftermarket wheel, tire, and accessories company. Vogue currently targets select luxury brands such Cadillac, Infiniti, Lexus, and Mercedes.

You can find Vogue products at tire retailers such as Discount Tire, NTB, and Belle Tire, and also at select new car dealers. These new car dealers are called “Custom Centers,” where the dealer essentially outsources management of his accessories business to Vogue.

Here’s the Custom Center business model:
  • A dedicated, on-site Vogue Tyre sales manager directs the Vogue business within the dealership.
  • Inventory is owned by Vogue – some is stocked at the dealership, and some is off-site nearby.
  • Vogue technicians perform accessory installations, repairs, and replacements.
  • Some accessories are pre-installed – OEM pre-installed accessories may be removed and credited.
  • Dealers receive a margin on each sale (typically higher than the margin they earn on OEM accessories) as well as an additional rebate; dealer staff are also spiffed for sales of Vogue products.
  • Returns and warranty claims are seamlessly handled by Vogue.
Essentially, no one at the dealership has to lift a finger as far as accessories go, and they still see a payout.

Needless to say, they’ve nailed ease of doing business. For dealers, it’s low risk, high reward. You’d be hard pressed to find a Custom Center dealer who doesn’t have positive things to say about his relationship with Vogue. Contrast this to dealers’ comments about dealing with OEMs on accessory-related issues (if you haven’t already, you may want to take a closer look at the results of our most recent Accessory and Parts Manager Satisfaction Surveys).

OK, so dealers love Vogue. But what about end-customers?

Vogue Tyre checks all of their boxes too, offering the right product styling and variety, promotion, and price. In fact, the signature yellow and white sidewall on Vogue tires – dubbed “Mustard and Mayonnaise” – regularly makes its way into rap song lyrics. And, as we discussed in a previous blog, Vogue’s website provides slick build-your-own functionality that helps customers envision what their vehicle will look like after it has been “Vogued out.” Within Vogue’s target market and current brand focus, many customers actually seek out Vogue accessories—others are easily convinced by the flashy displays.

Bottom Line: Vogue Tyre is fairly small, and focuses only on a few brands. So, the sky’s not falling for OEM accessories, but it could be if a Custom Center-like business model takes off on a larger scale. Vogue has set the bar high, offering top-notch service to dealers and products that customers covet. In deciding how to manage their accessories business, dealers will naturally compare and contrast a Vogue-like company to the OEM – how will you stack up?

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