TWMX All Access: O’Neal Distributing

Settling into one of the office chairs in Chuck Kober’s office at O’Neal, it’s pretty apparent that it’s one of those spots best suited for kicking back and brainstorming. Chuck’s role is there is Product Development Manager, where he oversees the development of all the O’Neal, Azonic, and Blur branded items from start to finish every year. Chuck describes the process where, “Every season starts with mapping out what’s basically next year’s catalog. What’s new, what’s changing, and what’s staying the same as far as products, and then assigning those products to my artists. After that I coordinate vendors, and oversee the whole design and development process—testing, research and development.” Of course, that’s not all. Like many in the industry, Chuck wears multiple hats. “I started out as a rider rep here, I’ve never gotten far from the rider programs, and I’m still heavily involved in that. We’re kind of a jack of all trades company. We all help out a little bit, going to trade shows, setting up booths, etc. Heck, at Christmas we were totally swamped, and I was out in the warehouse pulling orders. We’re not above anything. (Vice-President) Frank (Kashare) and (President) Jim (O’Neal) were out there, too. We do whatever it takes.”

So where did O’Neal come from, and how long have they been around? Chuck starts in on the history, saying, “Jim O’Neal, started out when he was a traveling motocross racer. Like any privateer, he was scraping to make a buck, and started selling a few products out of the back of his van. I think socks were one of the first things, along with some other products. He realized he could make a few bucks by selling whatever he had to get to the next race, and he’d get some more items…and get to the next race. That turned from a van operation into a garage operation, and into a small office operation over the years. The company started in 1970, and by ’75 or ’76-ish, he started getting into the apparel market. He put the O’Neal name on a long-sleeve t-shirt, which is what jerseys were back then, and sold them.”

While these days the focus is primarily on O’Neal-branded items, as Chuck explains, it wasn’t always that way.

“At one point we were a huge distributorship. We sold more of other people’s products than our own, and over the course of the years to where we are now, we still distribute a couple products from other companies, but we’re mostly focusing on our own O’Neal-branded products.”

“The company is still called O’Neal Distributing, Inc. We still carry Maxima, Scott, and a couple other products that we’ve done real well with. But at one point we had a catalog that was hundreds of pages, with all kinds of little doo-dads. Pipes, sprockets, chains and all kinds of little stuff, but now we concentrate on our branded items.”

“The distributing market is so tough with the Parts (Unlimited) and Tucker (Rocky), and Western Powersports. Selling a pipe when you have to discount it 15%, by the time you ship it, pay your salesman commissions and everything else, you’re just trading paper at the end of the day. You’re making two points on an item. We’d rather take that money in inventory. Instead of stocking $100,000 in pipes, we’d rather stock $100,000 of pants, where we obviously make much more margin.”

“When we first made the move a lot of the sales guys freaked out, because that was where they made a lot of their money. But within months they realized they were making more money selling O’Neal product, and we could stock deeper instead of being out of pants all the time. All of a sudden we had them, because we could focus on the O’Neal product that makes us the money.”

When quizzed on whether there’s a particular segment of the market that O’Neal is focused on, Chuck explains, “We’re pretty wide open. We try to offer something for everyone from the weekend trail rider guy to the top ps. Guys like LaRocco and Hepler. However, we seem to have found a niche in the lower-end line. We have our Elements line of apparel that simply rocks. We can’t keep it in stock. It’s great that it sells great. We don’t want to be pidgeon-holed in as the low-end guy, obviously. In the last few years we’ve made some big strides with our higher-end lines to kind of set it apart. We’ve definitely seen an increase in sales due to that.”

“Besides our Element line, pant/jersey/glove/boot, our five-series helmets that are pretty much our bread and butter. They keep the lights on and that’s what we sell tons of every day.”

In the earlier days of apparel companies, it used to be that you’d go to a helmet company for your helmet, a boot company for boots, and a gear company for gear. Wondering aloud about how O’Neal had expanded into other areas, Chuck said, “I think we came out with our 707 helmet in ’98 or ’99, and at that point there was Bell, Arai, and Shoei, and that was kind of it. At that point there wasn’t really any OEM type helmets out, and we saw a need. Not everyone wants to get a $400 or $500 helmet. We found a way to make a quality, affordable $200 helmet that still offered the same protection, fit, and everything else. It also had a cool graphic. At the time, helmets were just solid colors. Blue, black, like that. If you wanted a bitchen helmet, you had to get it painted. But we came out with a bitchen graphic’d helment for $200. It just took off. We thought we were going to sell a few thousand in a year, and we grossly underestimated that. We couldn’t keep them in stock. We still have that problem today with some of our helmets. We sell every helmet we make.”

“Over the course of the years obviously everyone else caught on. We were one of the first, and now I think pretty much everyone has their own helmet. It’s a very competitive market.”

“The market’s definitely getting bigger. When you look at any of the MIC numbers, or bike sales numbers, the sport’s obviously growing. We go to the races and see that the stands are full every week. Also at some of the So Cal series races and you’re there from 5:00 am to 10:00 pm. So there are definitely more people riding and racing. I’ve been going out to the desert and playing a little more. I got my wife a bike and the desert’s packed…the trails are packed. There’s more need for helmets.”

You see some of the smaller, I don’t want to say fly-by-nights, because they’re established in some other area, but you’ve got graphic guys making helmets, and guys who just make protective stuff making helmets. They’re selling them, and they’re doing okay. But it’s tough, it’s getting crowded, but the market’s growing so it helps that there’s a little room for all these guys, and I think everyone’s doing a decent job.”

Of course, when things get competitive, cutting prices is one way to attract attention, and grab market share, though there thresholds that they won’t cross. “Basically, we don’t want to sacrifice quality. There are some non-Snell approved helmets out there for $49 or $59 that’ll never be an O’Neal helmet. We have one that’s just over $100, and that’s about the lowest we’ll go. We just try to keep a good-looking helmet with good finish, and quality features, where we can stick to that $100-ish price range for the low end. That’s where it’s really competitive.”

“We’re fortunate that we have been around for a while as a helmet player. I think people realize that, too. They’re looking at $100 Snell-approved O’Neal helmet versus a $59 Joe’s helmet, they’re going to spend a couple extra bucks.”

Obviously there are some fairly traditional combinations in the MX color palette, but with manufacturers straying from that, the next question was whether O’Neal would be straying into more experimental colors…maybe a nice taupe or mauve. “You’ll see some different colors from us in our ’06 line. We’ve always been kind of the…I don’t want to say traditional guys, but we’ve been more red, blue, black, gray and yellow type company. Where this past year we’ve obviously seen some of the competitors come out with some pretty outlandish colors. Neons and stuff that when it came out, everyone said, ‘Wow, that stuff is hideous,’ but over the course of the year, you’re starting to see it at the tracks. There’s definitely a market for it, so yeah, you’ll see some different colors. You’re not going to see pink, or anything like that, but you’ll definitely see some color combinations that will be new to O’Neal.”

With O’Neal’s franchise rider, Mike LaRocco, getting toward the end of his career, and Broc Hepler coming up as a solid star, Chuck was asked how they replace a guy like Mike. “It’s funny you ask, ’cause I had a meeting with my race support director and I asked him the same question and we both stared at each other for a few minutes of uncomfortable silence. Mike’s a stud. He’s my age, 34/35, and he’s still out there getting it done. Podiums this years. There are the top three guys, but besides them, I think he’s got as many podiums as anyone. He’s fourth in points and behind Windham by I think nine points. He’s kicking around maybe going one more year. We, of course, would love it if he did. But as far as replacing him, you can’t replace Mike LaRocco.”

“Who’s the next guy? I can’t tell you right now. I don’t know. We’re looking, and there are some possible guys, but there’s not really that next guy. There’s also not the next Stewart or Carmichael coming out of the 125s. Obviously we’re really stoked on Hepler, and he’s only in his second season, and he’s got at least a good two more years in the 125 class. It’s tough. We’re going to do some searching this year to try and find that next guy, even if Mike does stick around, we need to get someone in the wings. There are a lot of fast guys, but as far as an elite top guy, the company guy that Mike’s been, and that we’re hoping to make Broc into, it’s tough pickings.”

“In the last probably four or five years, it’s gotten very competitive when it comes ot signing riders, especially with the introduction of agents. Obviously it’s what they do, and they’re good at it…for the riders, I should say. Not for us, because we’re the ones who pay, and we’re paying more. Though in the last couple years we’ve seen we’ve seen kind of a plateau in the prices going up, and maybe some of the second or third tier guys are maybe even coming down a little bit. There was a rapid spike four or five years ago. Prices shot way up, and even a mid-40s or 50s number guy could command some pretty decent money. But this last year there were some decent teams and decent riders who were looking for that kind of money that they’d gotten in the past and they were finding that it wasn’t there. I think a lot of the gear companies realized that these agents and some of the riders were playing all of us off of each other. They’d call say, us at O’Neal and get a price, then call Thor and say, ‘I can get this from O’Neal.’ Then it would be a vicious circle. I think we all realized we were just killing each other.”

As a final question, we asked Chuck what’s next for O’Neal. “We get the feedback from all the riders and our dealer network and see what the customers and riders are looking for. We’re fortunate that everyone here still rides. Jim O’Neal still rides. I ride a couple times a week, and we’re out there riding and racing, so we have a pretty good first-hand knowledge of what works in the gear and what doesn’t.”

“Sales are great right now. We’ve completely outgrown the building we’re in, which we’ve only been in for a couple years, and we’re looking for a new building. We’ve got so much stuff in our warehouse that we have to move stuff around constantly just to ship and receive. We’re just going rs from us in our ’06 line. We’ve always been kind of the…I don’t want to say traditional guys, but we’ve been more red, blue, black, gray and yellow type company. Where this past year we’ve obviously seen some of the competitors come out with some pretty outlandish colors. Neons and stuff that when it came out, everyone said, ‘Wow, that stuff is hideous,’ but over the course of the year, you’re starting to see it at the tracks. There’s definitely a market for it, so yeah, you’ll see some different colors. You’re not going to see pink, or anything like that, but you’ll definitely see some color combinations that will be new to O’Neal.”

With O’Neal’s franchise rider, Mike LaRocco, getting toward the end of his career, and Broc Hepler coming up as a solid star, Chuck was asked how they replace a guy like Mike. “It’s funny you ask, ’cause I had a meeting with my race support director and I asked him the same question and we both stared at each other for a few minutes of uncomfortable silence. Mike’s a stud. He’s my age, 34/35, and he’s still out there getting it done. Podiums this years. There are the top three guys, but besides them, I think he’s got as many podiums as anyone. He’s fourth in points and behind Windham by I think nine points. He’s kicking around maybe going one more year. We, of course, would love it if he did. But as far as replacing him, you can’t replace Mike LaRocco.”

“Who’s the next guy? I can’t tell you right now. I don’t know. We’re looking, and there are some possible guys, but there’s not really that next guy. There’s also not the next Stewart or Carmichael coming out of the 125s. Obviously we’re really stoked on Hepler, and he’s only in his second season, and he’s got at least a good two more years in the 125 class. It’s tough. We’re going to do some searching this year to try and find that next guy, even if Mike does stick around, we need to get someone in the wings. There are a lot of fast guys, but as far as an elite top guy, the company guy that Mike’s been, and that we’re hoping to make Broc into, it’s tough pickings.”

“In the last probably four or five years, it’s gotten very competitive when it comes ot signing riders, especially with the introduction of agents. Obviously it’s what they do, and they’re good at it…for the riders, I should say. Not for us, because we’re the ones who pay, and we’re paying more. Though in the last couple years we’ve seen we’ve seen kind of a plateau in the prices going up, and maybe some of the second or third tier guys are maybe even coming down a little bit. There was a rapid spike four or five years ago. Prices shot way up, and even a mid-40s or 50s number guy could command some pretty decent money. But this last year there were some decent teams and decent riders who were looking for that kind of money that they’d gotten in the past and they were finding that it wasn’t there. I think a lot of the gear companies realized that these agents and some of the riders were playing all of us off of each other. They’d call say, us at O’Neal and get a price, then call Thor and say, ‘I can get this from O’Neal.’ Then it would be a vicious circle. I think we all realized we were just killing each other.”

As a final question, we asked Chuck what’s next for O’Neal. “We get the feedback from all the riders and our dealer network and see what the customers and riders are looking for. We’re fortunate that everyone here still rides. Jim O’Neal still rides. I ride a couple times a week, and we’re out there riding and racing, so we have a pretty good first-hand knowledge of what works in the gear and what doesn’t.”

“Sales are great right now. We’ve completely outgrown the building we’re in, which we’ve only been in for a couple years, and we’re looking for a new building. We’ve got so much stuff in our warehouse that we have to move stuff around constantly just to ship and receive. We’re just going to keep doing what we’ve been doing, get the good riders, the good marketing, the ads, and quality product.”

Contact:

O’Neal Distributing
9600 Topanga Canyon Blvd.
Chatsworth, CA 91311
(818) 998-1049
www.oneal.com

ing to keep doing what we’ve been doing, get the good riders, the good marketing, the ads, and quality product.”

Contact:

O’Neal Distributing
9600 Topanga Canyon Blvd.
Chatsworth, CA 91311
(818) 998-1049
www.oneal.com