Originally Published: 7/8/2012
Doug Stabler actually saw growth in his business during a slow economy by selling recreational vehicles that are all made in China. He is shown at his ATV Wholesale Outlet in Sacramento, Calif. McClatchy Newspapers
SACRAMENTO, Calif. - In 2007, Sacramento entrepreneur Doug Stabler embarked on an enterprise that, looking back, appears to be the prototype for failure in the recession.
He decided he was going to sell all-terrain vehicles (or ATVs), scooters and motorcycles - the kind of discretionary "toys" that consumers historically forgo in tough economic times.
None of his vehicles would be made in America. They would be imported from Chinese manufacturers with names totally unfamiliar to most U.S. consumers.
Stabler's timing would seem to have been, at best, unfortunate.
Following a 14-year run of sales gains, motorcycle and ATV sales did an about-face in 2007. The Irvine, Calif.-based Motorcycle Industry Council reported a nearly 41 percent drop in motorcycle sales between 2008 and 2009 - 879,910 to 520,502 units, respectively. ATV sales in that period dropped nearly 30 percent, from 454,098 to 321,181.
"I had people tell me I was crazy even before things got really bad," Stabler recalled.
Turns out Stabler was not crazy. He has been so successful that, earlier this year, he moved his ATV Wholesale Outlet business from a 7,200-square-foot operation to an 11,000-square-foot building.
He invested $165,000 in improvements in the new building. He paid cash.
"People ask, 'How are you doing this?' " Stabler said. "We did beat the odds, but I always knew we would."
Stabler's niche is selling Chinese-made vehicles - with associated parts and riding gear, plus on-site mechanic services - at prices generally ranging from $700 to $4,000.
In some cases, such as selling a large, four-wheel ATV, he can get you out the door for around $1,600 - about a quarter of what you might pay for a similar vehicle made by a mainstream manufacturer.
Stabler's business is not a wholesaler-to-retailer operation. Anyone can go in and get a vehicle. The ATV Wholesale Outlet name is an homage to the original business, a strictly wholesale operation begun in Loomis, Calif., in 2003.
New York-based marketing and branding expert Peter Schaub said Stabler was rolling the dice in a tough economy, but he gave Stabler kudos for doing his homework.
"He didn't have what I would've called an ideal business plan, because recreational vehicles everything from boats to personal watercraft to off-road vehicles took a hit during the recession," Schaub said. "But (Stabler) obviously had a plan. If you can sell discounted merchandise in high volume to an interested audience, and do it consistently, that can trump a bad economy."
The Chinese manufacturers providing ATV Wholesale Outlet's inventory aren't exactly recognizable names like Honda (a global pioneer in the ATV industry), Kawasaki and Suzuki. Stabler's suppliers have names like Taotao, SSR, Coolster, Jonway, Meiduo, Hensim and Znen. Stabler says some first-time customers assume that the lesser-known brands are produced on the cheap in substandard Chinese factories.
"That's not even close," Stabler said. "The (vehicles) are made in clean, sterile, modern factories."
He said people in China rely on the same vehicles for transportation in big cities.
"They depend on them to get around," he said. "They're meant to last."
Stabler makes regular trips to China, visiting 30 to 40 manufacturers on visits of three to four weeks. He meets with plant owners/managers and takes note of product design, cleanliness, organization and working conditions.
He also stocks a blizzard of parts.
"We've become the go-to place for parts, because people can't find a selection of Chinese parts for their (vehicles). Even our competition sends customers our way," he said.
One of Stabler's direct competitors, who asked to remain anonymous, conceded: "I've got to hand it to him. ... He's carved out a nice little empire over there. And he's worked hard to make it work."
Stabler said the fact that he's not hooked up with a high-profile international manufacturer enables him to prosper with a low-price, high-volume approach.
"If I was working with Honda, there was no way I could do this," he said. "There, you have to work with marketing costs and all the other costs that go with a company of that size. That raises the price of the product."
But Stabler said he does look at Honda as an example of how to succeed.
"I look at what I'm doing now like the beginning of what Honda was doing years ago," he said. "If you look back and think, 'What if I had the first five Honda dealerships in the United States?' Can you imagine what those would be worth now? Well, that's how I think about what I'm doing here."
Pinning Stabler down on anything is a chore. His mother, Judy, the self-described "shop mom," said her 47-year-old son rarely sits down for 15 minutes at a time.
Stabler's past business ventures reflect his seemingly relentless entrepreneurial nature.
He's the former owner of Credit City Auto Sales, a used car business on Sacramento's Fulton Avenue. By July 1998, he and his mother were operating Body Time & Exhaust Engineering in south Sacramento. The turn of the century found Stabler in real estate, a Citrus Heights, Calif., RE/MAX Gold agent.
Amid career changes, Stabler traveled extensively overseas, with extended stops in Russia and China. He said his visits to China focused his mind on the economic and manufacturing potential in that nation.
ATV Wholesale Outlet at a glance
The concept: Sales of deeply discounted, Chinese-made all-terrain vehicles, motorcycles and scooters, plus related service, parts and accessories.
Location: An upgraded 11,000-square-foot store opened April 1 in Sacramento, Calif.
Employees: Four full time. Owner/operator Doug Stabler also enlists help from his family: mom Judy, wife Tava and sons Isaac, 15, and Jacob, 16.
Origins: Started as a strictly wholesale operation in Loomis, Calif., in 2003, moved to a two-building site in Sacramento in 2007 and then moved into a former oak furniture store in Sacramento this year, spending $165,000 on building upgrades.
Future plans: Possible expansion into key markets, including the San Francisco Bay Area, South San Diego and Los Angeles.
Chinese brands: Taotao, SSR, Coolster, Jonway, Meiduo, Hensim and Znen.
Made in America: The shop carries various American-made accessories, including handlebars, hand grips and drive chains.
Competitors: Arctic Cat, Bombardier, Honda, Kawasaki, KTM, Kymco, Polaris, Suzuki and Yamaha.