But in the post-2008 powersports market, OEMs and dealers alike are forced to make critical evaluations on how to spend their constricted budgets. It seems that many business owners in our industry are choosing to sacrifice racing support and involvement. Does this make good business sense, or are these cost-conscious dealers throwing out the baby with the bathwater?
To learn whether racing still makes for a compelling business model, Dealernews talked with several dealerships that have created a name for themselves thanks to their involvement in racing at various levels. Each dealership offers a different perspective on how to make the most of resources spent in the sporting side of the industry. These perspectives include everything from hands-off marketing, to various levels of direct support, to dealer principals who themselves still race.
Representing the classic model of how racing can build a business, John Beldock of Erico Motorsports in Denver (a Top 100 Hall of Fame Dealer) is very clear on the risks involved if you expect racing to become a turnkey revenue stream. That being said, he is also quite clear that each business owner needs to carefully consider whether the love of the sport can overcome the potential drain on resources.
“We have been involved in racing over the years at many different levels,” Beldock says. “As far as racing as a promotional activity for dealerships, I have found it to be a revenue drain rather than a stream. There are a few racers that can trade their high visibility and skill for discounted services, but the faster the racer, the faster the drain.”
Beldock is the first to claim how his business was built “hustling crashed bikes to racers” to help them create new track-ready race bikes. But he also feels that the racers themselves are part of the problem. He says that “trackside advertising does serve to build the name and brand, but much of the clientele it targets is the racer crowd.
“Many in this group perform their own mechanical work, negating the need for a dealership’s service department,” he continues. “There are independents that perform work for racers, but they operate at a muted cost level and can offer a more affordable opportunity for those racers. Most race programs are on a pretty tight budget and need to look for heavily discounted services.”
But as mentioned, Beldock understands that for many enthusiasts working in the industry, the potential red on the balance sheet is just part of the cost of being involved in the sport. Racing is very rarely a zero-sum game, and if living the dream is the primary concern, then potential losses of supporting a racing effort can be considered sunk costs. (Continued)