Performance Racing Industry - Retailer Profile

posted Apr 16, 2011, 10:50 PM by LRP Admin   [ updated Apr 21, 2011, 3:00 PM ]
Article Originally Published in April 2011 issue of the Performance Racing Industry magazine.

When Mike Leary, owner of LearyRacing Products in Denver, Colorado, started racing, he was like a lot of guys on a budget, trying to get a nickel’s worth of performance out of four cents. He couldn’t afford a top-of-the-line chassis or up-to-date  equipment. He even brought the equivalent of a knife to a gunfight, racing a dirt chassis against more modern asphalt Super Late Models.  “When I was racing, I never had quite the equipment that everybody else had.  My fi rst car, I just chalked it out on the floor and welded it up,” said Leary, who added that it is not an approach that is likely to work in today’s sophisticated racing environment. “We were just in the right place at the right time,” he admitted, to pull off the success he experienced. 

In that Super Late Model series, Leary held his ground and carved up the competition to come close to winning a champions hip, finishing third and second in the season standings. It was a typical performance for Leary, who sometimes had to manufacture his own solutions to get the handling he needed to win.

Even that first car that Leary chalked out on the shop fl oor was competitive.  “We set some quick times and won races
with it,” recalled Leary, who accumulated 25 years experience as a driver. But that car was more valuable than its winning
record. “It made me learn,” he said about that fi rst car and those that followed.

Wanting to win when the odds were against him was a motive for schooling himself. It also appealed to his Mr. Wizard-like curiosity. “I want to know why something works, not just that it works,” said Leary, who studied math and aeronautical
engineering in college.  For the last 15 years since retiring as a driver, Leary has used those chassis-tuning lessons to create a winning edge in business, drawing customers from around the world who are looking for his expertise as much as they are to buy parts.

His store, Leary Racing Products, sits in a commercial business park just south of downtown Denver and sells all types of
performance products for a wide range of cars. But beyond the showroom and the shelves of inventory is what Leary calls
the “mad scientist” room, where he tunes shocks to fi nd the performance edge his customers are looking for.

“My theory when I started was that I needed something to get guys in the store,” Leary explained. His knowledge of shock absorbers and chassis set-up “gives us a competitive edge. It gives people another reason to come here instead of going over to other stores that sell parts.”

Those hours of poring over dyno charts also keep him sharp so he can advise his customers on a wide range of racing
problems, he believes. “It keeps the competitive edge in me now that I’m not racing anymore,” he said.

The store’s retail hours are structured to give Leary more time in the mad scientist room. “We’re only open to the public from
noon to 6 p.m., so we can work on shocks without being interrupted,” he explained, although he noted that a lot of his regular
customers have learned how to get in the back door when they need something in the morning or the evening.

Leary Racing Products caters to a wide range of customers, from oval trackers and off-road to drag race and hill climbers.
Leary builds shocks for all of them, estimating that he tunes at least 2500 shocks in a year.

Many of his customers are local and race throughout Colorado at places like lofty Pikes Peak and down to earth ovals such as Colorado National Speedway and I-25 Speedway. His sales and customer loyalty, however, cross international
boundaries. “We sell stuff all over the country from Florida to New York,” he said, “and we’ve built stuff for guys in Mexico, South America and Europe.”

He even had a customer from England stop by the store in Denver while he was touring the country by train. The customer
shipped his purchases back home before continuing on his vacation.

Leary believes that it is his attention to detail and a high level of customer service that draws customers from such a wide base. “Shocks take a lot of time to get right and my theory is that close isn’t good enough,” Leary insisted. He is an authorized re-builder who is certified by every major shock manufacturer.

He has confidence in the quality from all of his suppliers. “Their tech guys work with me and I work with them,” he said,
emphasizing how cooperatively they share ideas.

“Each shock is a production item, but not all of them are exactly the same,” explained Leary. But each set will fit the
customized needs of the buyer when they go out the door. He talks almost non-stop on the phone, consulting with customers while he fi ne-tunes their shocks to get the results they are looking for. Besides Leary’s expertise on the phone, each buyer gets three sheets of data from the shock dyno as a guide for chassis set-up.

“I’m real particular,” he admitted about details. “But once it leaves my store with my sticker on it, it’s my shock.” He noted that his shocks are not cookie cutter set-ups. “Everybody wants something different, even when they use the same shock,” Leary explained. At least half of the Late Models in the weekly show at Colorado National Speedway, for example, are Leary’s customers, including two of the track’s recent champions.

“They are two champion drivers, but each car is different and their set-ups couldn’t be more different.” The marketing advantage that Leary created with his expertise has been a magnet for attracting attention, but it’s the success of his customers that keep people coming back. “My customers have won over 100 championships in the last two years,” he said. “That success, plus word of mouth, is the best advertising.”

That winning tradition extends to Leary’s staff, as well. “Almost everyone who works for me is a multiple champion,” said Leary.

That includes Late Model driver Chris Eggleston, an honors student at Colorado State University, who races in the ASA
series and has a pair of Legends titles, and Roger Avants, a six-time NASCAR Late Model track champion, who also
won the NASCAR Northwest Region Championship in 2002.

“Some guys are intimidated when they walk in the door, knowing that they are talking to a six-time champion,” Leary
acknowledged. “But when they start talking to him, they realize that he’s just another guy.”

Leary and his staff put customers at ease by insisting that “there aren’t any dumb questions,” and reminding them that “we asked those same questions” at some time in their careers. “I learn something every time I go to the race track,” Leary continued. “I learn as much from my customers as they learn from me.”

Just as a race driver improves by logging many laps, Leary and his staff accelerate their learning curves because of the large number of customers they advise. “I can learn in a weekend what a team might learn in a year just because I’ve probably tried (the solution they are looking for) on three cars today alone,” said Leary. “I’m not smarter, just quicker, because I have so much out there.

“I like helping people go faster and being an advisor,” Leary confessed.

That courtesy even extends to racers he comes across at a track who have never set foot in Leary Racing Products.

“Even if they are not a customer, we’ll help them out because people appreciate that and they will remember that we helped them.”

Leary insists that solving a customer’s problem is more important than selling them a part, giving them the same treatment
that he appreciated when he was on the other side of the counter. “We talk ourselves out of a lot of sales because we want to solve their problem and what they asked for is not what they needed,” he explained.

That philosophy also includes treating each of his customers equally and going out of his way to preclude any idea that any of them are getting special parts or service. “I learned quickly when I started the business that it’s best to not race against your customers,” Leary said. “I try to give everybody as much information as I can and try to keep things on an even keel.”

That includes guarantees that customers are getting the same parts and advice as Eggleston or Avants. “If a customer
thinks that Roger has something he doesn’t, I ask them to give me their shocks and we’ll swap them right there,” Leary said.

Leary also gives his customers free rein to use tools in his shop as a service and to preserve money they can spend on parts. “We stock several types of chassis and if a customer asks, I tell him to just go back and measure off it,” he said. “I
appreciated that when I was racing and I remember we never knew as much as we needed to.”

Customers also can borrow expensive tools that they might only use occasionally, such as a spring rater, bump steer
gauge or a jig to mount a Late Model body. “I have customers who come in thinking they have to buy that stuff and I just tell them to take it home and use it and bring it back,” Leary explained.

Beyond the courtesy, he said, “I’d rather have them spend $1000 on other things that will help them on the race track.”
His relationship with local racers has been an advantage in the market and helped Leary succeed when he opened the doors of a very modest store 11 years ago. “There were six or seven places selling parts,” he recalled. “I raced a lot before I started the business, so the guys knew me. I didn’t make a lot of enemies when I raced and the guys trusted me.

When they ordered a piece, they got what they expected.”

Leary Racing Products began in late 1999 in a 1500-square-foot space in the same building it now occupies. Over the years, both the inventory and the space have grown signifi cantly. “We started with $40,000 and now we have about three quarters of a million dollars in inventory,” Leary said. “I look at old pictures and just laugh. What was once our whole inventory is what we buy today in a day.”

When the store opened, it was so small that Leary had to order inventory every day because he didn’t have any place to
store it. “We have 5000 square feet now and we’re bursting at the seams,” Leary said. Coincidentally, his next door neighbor
is quarter midget car chassis builder Tad Fiser, a customer for parts who also gives Leary access to machine tooling in a convenient co-op arrangement.

“He starts out racers at five years old and I get them at 14,” Leary noted, “and 50-year-olds in Legends who have never raced before are a big part of our business.  So, our customers can go from the beginning of their career to the end and never leave the building,” he joked.

“When I started, the idea was that I’d be racing more and sitting around with nothing to do in the winter,” he admitted, a naïve concept that quickly ended. And the pace was quick, if not profi table, from the beginning. “I did three times more business than I thought I would in the first month,” Leary recalled.
Despite that brisk start, Leary didn’t take any money out of the store for its first two years. His wife Nancy, who still keeps the books at Leary Racing Products, supported the couple while  Leary invested revenue in inventory tobuild the business.
Today, the inventory spans the entire range of motorsports. “Late Models are a big part of our business,” Leary explained, “but we go all the way from Legends and sports cars to super stocks, (IMCA-type) dirt modifi eds and rock crawlers.” The inventory, he said,“is pretty wide rather than pretty deep,” reflecting that variety.

“Our theory is that you gotta have it to sell it,” Leary said. Customers are more apt to buy something they can put their
hands on and walk out the door with than something they have to order and wait for, he believes. Based on comments from customers, Leary is right on target.

“People used to call to ask if we had what they wanted,” he recalled. “Now, they call and ask us to set it aside.” But Leary is quick to note that a large inventory is not a guarantee of success.

Unless it is built gradually and well managed, a large inventory can swamp a business and drain profi t. “I’ve tried to control growth to no more than 10 percent a year and avoid debt,” said Leary, referring to the pay as you go philosophy he adopted from the beginning. “Overhead is a killer for any business.”

“We buy enough to grow,” Leary added, “but I believe you make money when you buy inventory, not when you sell it.” To cut
his overhead costs, Leary buys in bulk and redistributes some of the product to smaller businesses. “I’ve gotten big enough that car builders work with us and I distribute to smaller dealers.” But cost cutting with bulk purchases is only one aspect of managing profit.

“Keeping track of inventory is the key to being successful,” Leary said. That includes buying the right items at the right time, something that Leary believes takes a lot personal attention. “I don’t have a computer that automatically buys 10 of an item when I get down to two.”

Instead, Leary studies sales trends, researches quality among competing brands and also watches the calendar. “You have to anticipate what people will need,” he said. “You have a different inventory in January than you do in July.” Seats, fire systems, pedals and safety gear are more likely to sell in the winter when customers are building new cars, for example,  while there is a bigger demand for consumable items at the height of the racing season. He also spends evenings scanning
catalogs and websites, doing some comparison shopping to determine who has the best products and at the best prices. “I’d rather talk the customer into spending a little more than come back because the part didn’t last a week,” Leary explained.

Leary believes it takes that level of diligence to contain costs and create profit. “I tell people I do more homework now than when I was in college,” he quipped.

To stay in touch with customers, Leary spends a lot of time at race tracks. In fact, he made the trek to California’s Toyota
Speedway at Irwindale for January’s Toyota All-Star Showdown, where he and Nancy offered support to five cars that were running his shocks. “We don’t take any weekends off,” he said. It’s important, he believes, that they know he is interested in what they are doing and what they need. But after three years, he stopped taking a parts trailer to support the weekly show  at Colorado National Speedway. Although trackside sales is a staple for many retailers, Leary believes the move cut  overhead without cutting sales and also gave him more time to spend with more customers.

“It tied me to one race track and added about 30 hours to my week,” he said, estimating the time it took to stock the trailer, be at the track, and move inventory back into his store on Sunday. “Now I get to go to a lot of different tracks,” he said, which gives him time to talk with a wider range of customers. By supporting more of his clientele than he would see only at one race track, he added, “It didn’t hurt our sales.” That exposure and time in the mad scientist room has helped Leary Racing
Products weather some tough times in recent years. “Having our own niche helped us,” Leary said, referring to his expertise with shocks. “There are some years when the lower end guys spend more and years when the guys who have money in the stock market are buying chassis. I sold a bunch of new cars this year and that’s a good sign. “Right now, the business is growing by itself and it’s getting closer to where it was before the recession,” said Leary, as he worked double-time to get shocks and other products out the door before leaving for the Toyota All-Star Showdown. Despite the hectic pace and long days that he needed to get ready for the trip, Leary was eagerly looking forward to it. “Ultimately, this business gets down to
talking to somebody,” contends Leary, who spends hours of each day talking on the phone to keep up relationships with
customers. “I enjoy the people in this business and the one on one,” he said, referring to vendors and customers alike.

“I used to work in a service department of a car dealership and nobody ever looked happy going in there,” he added.  “I want people to look forward to coming into our store.”

After all these years, Leary has disavowed that naïve idea that opening a store would give him free time in the winter and more time to go racing. “I’d like for it to get to the point where I don’t have to be here every day,” confessed Leary, who typically works seven days a week for much of the year. “But I enjoy it,” he quickly added. About running the business, Leary said, “It’s a lot of work, but it’s better than getting a ‘real’ job.”