Can electric carts generate green for your bottom line?
Tim Martin has been in the art business for 23 years and has never run a dealership. However, he's sold Bourget custom motorcycles out of his Rancho Mirage, Calif., art gallery with some success, so he's comfortable selling vehicles. The two genres of — pricey, one-of-a-kind artwork and unique, high-priced custom bikes — attract the same audience.
Today, Martin's into something new: electric, street-legal golf carts built by Mike Tomberlin. You may remember Tomberlin; he's the entrepreneur based in Augusta, Ga., who began building small-displacement ATVs and dirtbikes in Taiwan and China about 10 years ago under the AlphaSport brand. He's dropped that label and began selling under the Tomberlin name. Today, his hot button is street-legal electric vehicles. He offers one model, the E-merge, and has one on its way.
Martin in January signed up to sell Tomberlin's carts and has been ringing the register regularly since then. He sold 11 units the first weekend in April and is selling 50 units a month out of his 3,500 sq. ft. gallery —without any consistent marketing or advertising. He doesn't even have a Web site.
Martin's marketing tactic is to offer E-merge demo rides, and he says he converts 70 percent of the riders to buyers the same day they take a spin. They hop out of the E-merge, he says, walk into the gallery, and plunk down their money. And many of the remaining 30 percent buy after thinking it over, he says.
Martin sells the E-merge for $500 over the MSRP of $6,295, and his average sale goes at about $8,400 because of all the bling he adds: things like special paint and leather upholstery, special wheels and booming sound systems.
Recently, he says, he sold two $9,500 units to a Club Car dealer in Washington state, and he just shipped an $11,000 unit to a car dealer in Illinois. That one in particular had a Lamborghini paint job with leather and lots of other goodies. One machine has a direct TV system, and 12-inch chrome wheels are common.
The Illinois unit doesn't compare, however, to the $30,000 one Martin's building on spec. "It's not for everyone," he says, "but I guarantee someone will buy it. It will be way over the top. It's for the guy who has everything and wants bragging rights."
Martin is selling on instinct. He doesn't play golf, but he's moving a lot of golf carts because his store is in golfing territory, and because he's doing things differently from the typical powersports or golf cart dealer.
Martin operates in a nice retail environment: an outdoor mall near eight restaurants. His store, he says, is a retail venue, not a dealership. "Carts are a commodity," he says, "and people couldn't care less about them. I'm trying to change that attitude by thinking outside the box."
EXTENDING THE BRAND
Because of his early success, Martin is starting to extend his brand with hats and shirts, and he's even starting to think about the "F" word — franchising.
"Going Green" is a hot topic, and Tomberlin has been ahead of this curve, as he's been with so many other things in powersports. He's expanding the electric vehicle side of his business by opening a 20,000 sq. ft. assembly plant in Palm Desert, Calif., adding the snazzy dealership with Martin, and launching a joint venture manufacturing plant in China to produce his electric and gas vehicles.
Here's the situation: Tomberlin is building two street-legal electric vehicles in China that he sells worldwide. The E-merge is being sold mainly in the U.S. but has reportedly drawn interest from Europe to Australia. The Anvil, a bigger, more exciting vehicle, is expected to be in production later this year.
The E-merge looks like a golf cart and comes as a two- or four-seater. It has a top speed of 25 mph and a range of more than 30 miles.
The huskier Anvil is reminiscent of a side-by-side ATV and is 103 inches long. It seats four passengers, hits 35 mph and has a range of more than 40 miles. MSRP for the Anvil will be around $10,000.
While he won't reveal how many E-merges he sold last year, Tomberlin says that he built his U.S. dealer network from zero to more than 280 in one year. He's been adding four dealers per week so far in 2008, and expects unit sales to increase substantially.
Tomberlin says Martin's business has exploded. "It's just crazy. Celebrities are buying our vehicles. We never had a vehicle that resonated like that," he says.
Tomberlin estimates the golf cart market at about 200,000 new and used units annually, but powersports dealers haven't responded.
"Quite frankly," he says, "they were not as receptive to electrical vehicles as we thought they would be, and retail activity in that channel doesn't reflect what we knew was going on in other channels."