There's more to powersports sales than new units

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I usually ride on weekends. Some of the most convoluted roads are in California’s San Diego County within 20 miles of where I live, and I can string together a 50-mile ride with these roads. The sportbike guys tend to avoid them because they’re not “fast,” and the cruiser guys tend to avoid them because they’re too much work. I tend to ride my ’56 Gold Star or my ’67 Daytona — as you can see, we’re not talking about being overpowered here. They’re light, low, and work just fine on these roads. In any case, I’m not likely to see a lot of other motorcycles on any given weekend.

Not too long ago, a passenger in the car while my wife drove into San Diego’s wine country.

Our route took us along one of the major back-road routes through this area, and I’m guessing that I saw more than 100 motorcycles, in the middle of the day over an eight-mile stretch of two-lane road. It made me feel pretty darn good. Not only was I impressed by the number of motorcycles, but by the variety as well — cruisers, sportbikes, tourers, you name it. All these good folks, our customers, out there using their motorcycles, burning gas, wearing out tires, chains, oil, brakes, batteries, gear and of course, entire motorcycles.

While we in the industry tend to focus on the number of new bikes sold, it’s important to remember that it’s just one slice of the motorcycle pie that includes parts, accessories and service. We also need to remember that for much of the ’80s, that particular slice kept getting smaller and smaller, and when it did start growing again in ’93, it didn’t exactly rocket to the million-units-per-year stage we saw in the mid-2000s. During the long climb upward, existing dealerships soldiered on, selling new motorcycles, used motorcycles, parts, accessories and service.

I remember in 1991 meeting up with a Kawasaki dealer I’d known for almost 20 years. This wasn’t the bottom of the market, but damn close. We were at a consumer show when I asked him what kind of year he had. He glanced around the room as if to see if anyone else was listening, bent over and whispered, “Mike, I made so much $#$% money last year, I had to take it to the bank in boxes.” This dealer is still in business and still doing well, though maybe not as well as three or four years ago. The point here is that it’s possible to do well in a down market.

I would guess this dealer, like many of you, started by reassessing his organization, cutting here and there, tightening up processes, making the organization more efficient, and focusing on those things that offered additional potential to make money outside of the normal channel of new bike sales.

One opportunity that seems to need some development is used bike sales. A statistic that I see frequently, but have no way of documenting, is the volume of sales in the “used” category. I’ve heard estimates from one to two-million used motorcycles are sold each year, very few of which will ever see the inside of a dealership. Most used bikes are sold directly from one consumer to another.

According to the most recent MIC study of motorcycle owners, as of 2008 there were about 10.4 million motorcycles in use, with the average age of them being about 11 years old. We’re talking ’97 or ’96 models at best. As we all know, during those 11 years there have been monumental changes and improvements in just about every category of motorcycle, including the addition of a couple of new categories. So aside from the need to replace a worn-out motorcycle or the owners’ desire to simply change bikes, there are more choices these days and it’s possible to buy a motorcycle that’s tailored for the kind of riding you do or would like to do.

I don’t know why consumers avoid taking their motorcycles to dealerships for resale, but I do know that there are a number of used-only dealerships that are hugely successful. While making dealer calls a few years ago I spoke with a gentleman in the Ohio/Michigan area who owned a used motorcycle store. Although the primary reason for the call wasn’t about his sales, I did ask how it was going. This was in 2007 and the market had already taken a definite downward trajectory. He hesitated, and then made me promise not to tell anyone — his sales were better than ever. He was having a great year, the best ever.

Another store that comes to mind is WOW Motorcycles of Marietta, Ga. Wow is right. The place is stuffed with motorcycles of every make, type and color, and would definitely put some “franchised” outlets to shame. Whatever the secret to procuring and selling used bikes is, they’ve discovered it.

Here’s my point: New motorcycle sales will always be a relevant factor in most dealerships. However, when those sales start to sag, there are other ways to supplement the lost income. Used bikes can be a significant boost, as can an emphasis on parts, accessories and service. Look at your store, most people aren’t service techs, they want to take their mechanical problems to an expert — you. Make sure that you are known as Mr. Motorcycle in your market, whether it’s new bikes, used bikes, service, or P&A. We won’t be hitting the million units a year sales mark for a long time coming, but with some creativity and new thinking, at least you’ll be around when comes around again.

This story originally appeared in the Dealernews May 2010 issue.