Second-Hand Sales

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If you're an enthusiast whose passion led you into the retailing end of this business, here's a question for you: Was your first bike new or used?

There's a good chance it was used. (There's also a possibility it was a POS money pit that sat more often than it ran. But enough of my history.) That used bike got you in the game, and there you stayed.

Knowing this, what kind of used bike business is your dealership doing? How are you getting the young and cash-strapped onto motorcycles? Um, you're not? Neither are a lot of dealers, apparently.

The used motorcycle (and ATV, PWC, etc.) market is a vast, untapped profit center. Dile Brown, owner of Knoxville Harley-Davidson and a member of Dealernews' editorial advisory board, estimates dealers are only tapping 15 percent of the used market's potential. At his three dealerships he tries to keep a sales ratio of one used to every two new.

Dile notes that his used sales land him a nice margin and help push new unit sales. Customers know he accepts all used bikes and is open to trade. So if their first ride is used, they know they can come back and trade up. Or if they don't find the used bike they're after, they're a prospect for a new bike sale.

Dealernews senior research editor Don J. Brown says dealers should be committing more resources to selling used bikes. DJB estimates that in 2006, there were 6 million streetbikes in use — half of which werecruisers. The used market is a natural result of a decade-plus of year-on-year sales growth, he notes.

Care to know what the used market looks like? Attend a powersports auction.

In March I attended a National Powersports Auction in Poway, Calif., researching a story for this issue's segment on the used market (see page 52). The auction action was not only exciting but stunning in scale. Harleys. Hondas. Triumphs. If it had two wheels, four wheels or floated, a bidder was hitting on it.

NPA operates four auctions around the country on a rotating schedule. At the Poway sale, there were 408 people bidding — live and via Internet simulcast — on 1,475 motorcycles, ATVs and PWCs. At its Atlanta facility (NPA's largest) the auction house moves about 2,500 units a month.

That's a lot of used powersports product going to a lot of dealerships and beyond. NPA and two other major auction houses, Eastern Powersports Auction and Manheim, have reported business growth that continues to climb.

The dealers who do work the pre-owned market know that having used bikes available is essential to landing a deal with a customer who can't afford (or just doesn't want) a new motorcycle. Plus it gives dealers a wider product lineup. You can also up P&A and F&I sales with used bikes.

Our cover dealer Rick Roush works the pre-owned business at his Medina, Ohio, dealership not only to keep his techs employed through winter, but also to have a showroom full of bikes ready for springtime buyers. The used section is Rick Roush Motor Sports' biggest profit center.

So remember back to that first bike and what it meant to you. How it didn't matter that it wasn't new — just that it swooped you into that rarified space that exists between the beginning and end of a ride. If you could pass on this experience to a used bike customer, why wouldn't you?

Dennis Johnson Senior Editor dennis.johnson@dealernews.com