Seems like a new motorcycle business model might be emerging?

[Tennessee]

I have no statistics to prove this, but it seems like some of the most successful motorcycle dealerships are doing it with used bikes, all brands, models, price ranges. This would only be applicable in the USA, as I have no doubt that the India and China markets are expanding. Europe, not sure.

 

It would seem that we have finally hit the convergence of two roads:

On the one hand, the new generation coming up is not that into motorcycles, and as we all know, a lot of brands are contracting, not expanding, at least in the short term. (next five years or so)

 

Secondly, it would seem that at least in the United States, we have reached a saturation of motorcycles. I certainly don't know how many bikes are sitting in garages, barns, sheds, etc., but I think the numbers might be much higher than we might imagine. Used bikes litter the landscape on multiple sales forums, like Craigslist, Cycle Trader, eBay and obviously we all know a number of dealers who might not be there if not for their used bike sales.

 

If you live anywhere near Atlanta, you certainly know of WOW motorcycles. My first visit there was eye opening, to be conservative. About 225-250 bikes on display in their three room showroom, and the nice man who took me around said they have "numerous" buildings where they keep bikes that are not ready for sale yet, still to go through their mechanic staff of seven certified mechanics, and two helpers. They also have an upstairs floor that is chained off. I was told that was where the owner keeps the ones he might want to keep. But with the right amount of coin in hand, they will take you up. You almost miss the place when going through Marietta, GA, just North of Atlanta, as it sits sideways to the main road. Once inside, you cannot believe it.

And I was told that their service center is about three weeks behind on major jobs, two-four days on simple things like oil, tire, etc.

 

And although they do sell a little known brand of electrics called Zero, and seem to handle new Benelli, Hyosung and an outfit called SSR, by far and away their biggest products are used bikes, accessories, and I would think their service center is doing pretty well. But when it comes to bikes alone, used is king at WOW, and I am seeing more and more dealers who without used, would simply disappear.

 

Overall, when I look at a lot of dealers, used is the bread and butter that pays the bills. Scary at best.

 

Maybe I'm wrong, but it seems like the largest new model is the used garage queen, not a 2019 or 2020.

[XV1100SE]

I thought Zero was one of the bigger brands in the e-bike world. Probably the direction of the future.

 

I noticed they have brand new Hondas and Harleys....and even "new" 2013 and 2011 Hyosung. Hyosung didn't take off very well in Canada.

 

New bikes the dealer has a lot of money tied up in inventory. Used bikes they take a chance on being able to resell but mark-up on a used from trade in price to resell price is pretty good.

 

You are probably correct on the used market. They probably take in a used bike to sell a used bike, rather than on a new bike.

[BlueSky]

Seems to me that it would be tough making money on motorcycles, used or new. There isn't that much profit in the sale of a bike, not like autos anyway. A dealership close to a major city in the south would have the best chance to survive I would guess.

[RandyR]

WOW's business model has been to buy large lots of used bikes and NOS from other dealers' inventories and then flip the bikes. They have also become a dealer for new/off-brand bikes. And they did it in a big way. The odds are that WOW has any bike of any year and model you want going back at least 20 years or more. And, the prices there have generally been competitive. I haven't bought a bike there, but have looked at the inventory several times, as they are only an hour away from me.

[luvmy40]

SRK Cycles, of "Bikes and Beards" fame(youtube) is a great example. They are not a dealer for any brand, IIRC. All they do is buy sell and trade used bikes. They have had the same Honda Rune in their possession 3 or 4 times over the last couple years

Edited July 14, 2019 by luvmy40
spelling

[Tennessee]

Randy, that business model is why a couple new Honda's showed up in their inventory list. They are not really a Honda dealer, just carry so many that they had a couple new ones.

And I think the fellow up in Pennsylvania, he doesn't even have a service center, yet... He had an Indian that went sour on him, and he posted a couple of Youtube videos on why he would never buy another Indian, when actually, the problem was his, not the buyers. He took a lot of flak for that. Can't remember what the problem was, have to look it up. But it was something he should have caught before he put it out on his floor.

 

But make no mistake, I think he is making good money.

I have a guy near me who does consignments, and repairs. About three employees, and they are doing a ton of sales and repairs. You want tires put on? At least three-four days. He sells consignment bikes, and the only reason he slows down in the summer is he can't get the bikes since everyone is riding them in the summer, not selling them. He just recently put in a line of little dirt bikes for little kids. Probably Chinese, have not stopped in, but saw them lined up outside his showroom. Next to the consignment bikes.

 

I think actually a dealer who knows what they are doing can make easily more on a used bike than a new one. Take a trade wholesale, sell retail, just like cars. Tack on an aftermarket warranty, make more money.

And for sure, we are drowning in used bikes in the United States and Canada.

[Condor]

 

Overall, when I look at a lot of dealers, used is the bread and butter that pays the bills. Scary at best.

 

Maybe I'm wrong, but it seems like the largest new model is the used garage queen, not a 2019 or 2020.

 

I used to preach that to all by dealers when in the gun biz. There was very little percentage of profit in new guns, but the trade-ins usually doubled their profits. And new generates trade-ins. It been known for quite a while in car dealerships the service dept generates the bulk of the profits.. Mechanics... $30/hr. Shop rate $100+ an hour. That's how they can afford those huge dealership facilities. If they had to rely on new car sales they'd go broke... The light bulb has finally turned on for MC dealers.. 'Bout time...

[Gary N.]

We have a local dealer here in SW Ontario that used to be a big HD dealer but lost the franchise because he wouldn't spent the money to build the big Taj Mahal show room like most of them have now. This is a family run business that's been around for ever. They started bringing in used HDs from the states and where ever he could buy them and business is booming. Between the used bike sales and service they seem to be doing great.

[Kretz]

The Government love it too!

Don't know how it works in the US, but here in BC (& I think it's the same in the rest of Canada) every time a bike (or any vehicle) is sold the Gov't collect full taxes on it again. So in BC that's 12% (7% Provincial +5% Federal). So not only do they claim taxes when the vehicle is sold new they collect taxes every time that vehicle is sold afterwards!

So a new bike that costs say $15k attracts $1800 tax when new, if it sells after two years for say, $11k that's another $1320 & so on every time that vehicle changes hands during its lifespan!

The tax is paid by the new owner & it also applies to private sales, the tax is collected when the new owner goes to register & insure his new (to him) bike.

[BlueSky]

That's seems outrageous. Here in NC, the sales tax on autos is 3% every time it's sold. Back in the early 70's I bought and sold a lot of cars with no sales tax but later in that decade, the sales tax was added to the sale of used autos so I quit selling as many.

[Graywulf]

seems the other 'interim'? model they are all starting to use is small capacity bikes made in Asia. KTM, BMW are doing so (India) HD are having the non USA 500/750 street made in India, and seems they are entering a contract with a Chinese manufacturer for 330cc bikes in Asia.

[big-norm]

what is so crazy to me is that I called my local Yamaha dealership here and I have called about looking at new motorcycles as well as service and I have not received one call back. Not one. Zero zip. In order to do the services on my motorcycle I have actually been using this website to do it myself and get what I need done. I actually went to the dealership and they pointed me over to some bikes and they said, "come back and tell me if you see something." I could not find the salesperson again. I don't need a royal red carpet for my arrival or special treatment but I am surprised at the lackadaisical to someone with cash in hand for sales or service. I am sure the dealerships have thinned out staff just to stay afloat and they are just so busy.

 

They need to take care of the die-hards. I have loved motorcycles since age 12. it is not a hobby or a mid-life crisis toy. I think it is sad that a motorcycle stays in the garage. I want to take them out and put 50K miles on them and then buy new or used ones. My wife does too! I don't need a medal but the dealerships should at least call us back when I want to put one of my bikes in for an oil change because I would rather ride more than spend time in the garage. How silly!

[Tennessee]

I agree with you, big-norm. About 18 months ago, my wife and I walked into our local HD dealership and I was wearing my US Navy Retired ball cap, and we were dressed OK. We walked that showroom for almost 20 minutes, looking at bikes, and the three sales guys in the building were either on their computers or fiddling with their phones the whole time.

After the girl in the front said "Hi", that turned out the be the total conversation we had with anyone in that dealership. When someone obviously in their 60's with a wife walks into a dealership like that, usually you don't get 20 feet into the room before some eager beaver is glued to you.

 

Not this place. Thunder Creek Harley Davidson, Chattanooga, TN. Now out of business and renamed White Lightning HD. Wonder why?

[Graywulf]

what is so crazy to me is that I called my local Yamaha dealership here and I have called about looking at new motorcycles as well as service and I have not received one call back. Not one. Zero zip. In order to do the services on my motorcycle I have actually been using this website to do it myself and get what I need done. I actually went to the dealership and they pointed me over to some bikes and they said, "come back and tell me if you see something." I could not find the salesperson again. I don't need a royal red carpet for my arrival or special treatment but I am surprised at the lackadaisical to someone with cash in hand for sales or service. I am sure the dealerships have thinned out staff just to stay afloat and they are just so busy.

 

They need to take care of the die-hards. I have loved motorcycles since age 12. it is not a hobby or a mid-life crisis toy. I think it is sad that a motorcycle stays in the garage. I want to take them out and put 50K miles on them and then buy new or used ones. My wife does too! I don't need a medal but the dealerships should at least call us back when I want to put one of my bikes in for an oil change because I would rather ride more than spend time in the garage. How silly!

I think many dealers are under the gun from manufactures these days, but there is no excuse for poor customer service.

 

I'm very lucky with my local dealer, been going there 12+ years, they have a very good attitude, fix things when they screw up, and always prepared to go that extra 'bit'. The sales team has been stable for years.

However over this decade+ they have gone through 3 major manufacturers. Yamaha they had for a long time, till Yamaha started demanding how the shop is 'layed out', wanting a segregating wall between them and other or s/hand bikes. They were one of the earliest Spyder dealers in NZ, and ended up dropping them because Canam started to follow the Harley dealer principle... clothing, extra's and if you sold quads, seadoo's etc you got a higher dealer discount on trade prices. They now sell Suzuki as their main marque and seem happy with them. They also sell Enfield and Triumph. We have had more than one shop in NZ who sell HD get immense pressure to dump any other brand and be HD only (with a total country population of 4 million?)??I am assuming that similar goes on in the US?

 

It must be very hard for dealers now with dwindling customer bases, and I am shocked that you in the USA seem to have so manty dealers who have a poor customer attitude.

[cowpuc]

There was a Polaris Indian dealership (closed now) not to far from us who was regularly hitting up the auctions purchasing used HD's for their showroom and actually doing a better business on the resale of the used HD's than on their new bike floor plan. Back then (no idea if its still happening) the ploy for Polaris Indian was to grab the used HD's off the used bike market and claim them (to the public) as trade-in's in an effort to show that ton's of HD riders were jumping ship to Polaris. The money was good on the resales of the used bikes but not sufficient enough to maintain the Dealership and in the end, they closed.

Here in America (at least in Michigan), used bike shops do not have to pay sales tax on the bikes they take in as long as they are for resale (inventory). The consumer does pay sales tax when purchasing the used machine from them though. You have to have a business license to do this, if this is done in private sales it is referred to as "jumping titles" and is not legal but is still a common practice by many people who consider the sales tax placed on the scoot when purchased as new as the only "legal" taxation of a product.. Its crazy when you think about it,, we seem to still be fighting the taxation battles even years after the Boston Tea Party