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Old 04-06-2012, 09:58 AM   #1
srt
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Default Anyone in the Motorcycle business?

Curious if the recent past has led to any dealers getting into the motorcycle business and what their thoughts are. There certainly are similarities in sales service and parts as well as finance and after sale accessories.
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Old 04-06-2012, 12:50 PM   #2
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a family member has been in the powersports bus. for 20 years. its not the same business anymore. everything sold is truly a toy, and in this depression, buyers vaporized.. the last three years have been horrible. even with two of the japanese big four there are no grosses to be made. everyone is gifting product to get rid of 3 year old n.o.s.. service is great in season, but it truly is a seasonal business. most techs seem to have "issues", or be psychotic. and 85% of the credit scores seem to be in the 4-500 range. had a guy in last wee that didnt know how to spell his first name!!! he had to look on his drivers lisence. i'm not making this up. if youv'e got harley or your in a major metro market with any other brands it might be better, otherwise, i'd be real careful.
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Old 04-06-2012, 05:57 PM   #3
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I was in the motorcyle business from 1967-1988 concurently with the auto business. I have turned down several opportunities to get back into bikes but I have several friends that have made a LOT of money in the past years. The money is in the used bikes, new are given away. I saw the P&L from a friends Harley store for last month, $600k gross, about $300k Net!!! Like any other business there are some doing great and others struggling. Any seasonal business has additional challenges.
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Old 04-08-2012, 10:44 PM   #4
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Originally Posted by jayhawk View Post
a family member has been in the powersports bus. for 20 years. its not the same business anymore. everything sold is truly a toy, and in this depression, buyers vaporized.. the last three years have been horrible. even with two of the japanese big four there are no grosses to be made. everyone is gifting product to get rid of 3 year old n.o.s.. service is great in season, but it truly is a seasonal business. most techs seem to have "issues", or be psychotic. and 85% of the credit scores seem to be in the 4-500 range. had a guy in last wee that didnt know how to spell his first name!!! he had to look on his drivers lisence. i'm not making this up. if youv'e got harley or your in a major metro market with any other brands it might be better, otherwise, i'd be real careful.
Interesting comments - thanks for the post.

One of my favorite places is Lake Havasu City, AZ and I've spent a lot of time there with my SeaDoo scouting out the lake. When I was there in 2008 I stopped by Walt's Powersports to buy some oil for my two-stroke engine and I thought the place was a gold mine. The dealership was loaded with customers buying motorcycles, quads, skis, accessories, parts, service, etc.

Three years later and the dealership is out of business - it just closed down with no advanced notice.

I'm also amazed at how many powersports dealerships still have prior year models in inventory. I get the impression the OEMs force cold products on their dealers in order to get the models that actually sell.

Concerning your comment about the credit worthiness of the buyers, I've heard that too. The issue isn't getting a commitment from the customer, the real challenge is to get the deal bought.
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Old 04-08-2012, 10:50 PM   #5
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I saw the P&L from a friends Harley store for last month, $600k gross, about $300k Net!!!
Damn, that's good money no matter what franchise you have. I'm betting there are a lot of Mercedes, BMW and Lexus stores that don't make that kind of money.

Concerning owning both a car dealership and a motorcycle dealership, I'd be curious to hear your opinion if one was more fun or easier to run than the other.
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Old 04-09-2012, 09:42 AM   #6
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I thought I would wait a while to post on this subject

I grew up in our families car dealership, only job I have ever had. I got a powersports business by buying a building that housed the place in 1996, at the time it was Polaris.
The franchise was not kept but one of the techs talked me into keeping the service dept. open. Little of my time was invested in it but it was doing OK bottom line. In 1999 we added Kawasaki and Yamaha, and sales took off. Got a chance to buy adjacent land and add 7500 sq ft to the Jeep store in 2001 to incorporate the powersports to the main building. Worked well with Jeep.....Chrysler did not like it but with separate showroom and service there was nothing they could say. Since I was one of the 789 we do only powersports and have added commercial mowers and plan on golf carts soon.
I don't think the employees in the powersports industry are any more "psychotic" than the car side, it seems there is just lots of adult daycare no matter what you are employing people to do.
srt....if you can add the franchises to your current facility with little increase to your fixed costs it can be a win win.
.......if you have techs that like the powersports industry it can be a great way to keep them busy when the car side slows.
.......be very careful what products you put in. If you have no lakes around NO WATERCRAFT, if your in farm country ATV's and Side by Sides are great business, under NO circumstances do Snowmobiles. If you want Psycho's this the product line they all seem to be in. Motorcycles are very fickel....low inventory numbers are best, someone much smarter than me once said its better to be looking for inventory than looking at it. The Japanese manufacturers are the best to work with, very little forcing of product and factory BS is at a mini mun. I have heard that the domestics can be a real PITA.
I would love to see the Harley store's financials, sounds awfully high, great if he can do it though! Must be in a major metro. Most Harley stores are doing OK but the recession even got some of them and there are several for sale now.
I'll quit now but if you want to talk more Just send me a PM.
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Old 04-09-2012, 06:31 PM   #7
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I sold Kawasaki & Yamaha in the same facility with different showrooms. I did not find it very easy to mix the the motorcycle and auto businesses. In many ways they are similar but many ways very different customers and employees. There was a time when it was every motorcycle dealers dream to become a car dealer, and a time that every car dealers dream was to become a motorcycle dealer (slightly exagerated I know). Just like the RV business, MC dealers that were able to hang on long enough found themselves with expanding demand and very little competition and were able to do very well. I was president of the state MC dealers association and still have several close friends in the business. The Harley dealer I spoke of is a partner of mine in another business and also has 2 smaller Harley stores that each set a record last month. Unfortunatly I have no financial interest in the Harley stores I had the chance to attend the Polaris-Victory-Indian-GEM new model show in Nashville last year and was very impressed. It was great seeing the excitment and passion of the MC dealers again, it took me back 40 years ago but in the end I could not bring myself to open another MC dealership. If it were up to my son he would do it tomorrow...must be an age thing. As I said before, in every buisness there are opportunities and challenges-just depends who is looking.
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Old 04-10-2012, 01:01 PM   #8
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Quote:
Originally Posted by steve_biegler View Post
I thought I would wait a while to post on this subject
I was hoping you were going to jump into this thread and share some of your experience.

Quote:
Originally Posted by steve_biegler View Post
I would love to see the Harley store's financials, sounds awfully high, great if he can do it though! Must be in a major metro. Most Harley stores are doing OK but the recession even got some of them and there are several for sale now.
I noticed a couple of closed-down Harley stores when I was making my trip from Phoenix to Seattle. It appeared they probably built a new facility next to the freeway right at the peak of the market and then the economy went into the tank.

I did a quick search on BizBuySell and found four Harley Davidson stores for sale. The profit levels range from $42K to $1.6 Million. Here's a link to the search results from BizBuySell - click here
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Old 04-10-2012, 01:08 PM   #9
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Originally Posted by Kitfox View Post
I had the chance to attend the Polaris-Victory-Indian-GEM new model show in Nashville last year and was very impressed. It was great seeing the excitment and passion of the MC dealers again, it took me back 40 years ago but in the end I could not bring myself to open another MC dealership.
It's good to hear the excitement and passion is back for the MC dealers - thanks for your comments.
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Old 04-10-2012, 05:43 PM   #10
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I understand that Harley can be very demanding and several dealers have not been able to survive with all the overhead. My friend had a nice facility but "felt the need" to build a $7m+ facility. Scares the heck out of me but he has done very well.
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Old 04-24-2012, 12:55 PM   #11
lsx only
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I always figured powersports would be fun if u are in the right market,gonna purchase a new polaris ranger crew next week im so ready to ride.
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Old 04-24-2012, 01:22 PM   #12
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if you havent been in a kawasaki teryx le w/ eps yet, you ought to try one before committing to polaris. that 750 v-twin is a rocket motor!! just our opinion however.
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Old 04-24-2012, 01:31 PM   #13
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I always figured powersports would be fun if u are in the right market,gonna purchase a new polaris ranger crew next week im so ready to ride.
I've always thought that would be a fun business too.

Based on some of the forums I read (mostly Greenhulk.net) I get the impression that it's hard to find good service at many powersports dealerships. I think it would be cool to own a powersports store that had a reputation for being able to fix what the other shops couldn't.
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Old 04-24-2012, 05:09 PM   #14
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The only good experience I've had buying or servicing motorcycles was buying a used Kawasaki from a BMW M/C dealer. The "big three" Japanese dealers went out of their ways to either make me feel like I'm some kind of blithering idiot, or would ignore me entirely if I'm not drooling over the newest literbike or chrome-laden cruiser. If I'm not having my intelligence questioned, they are trying to rake me over the coals for some excessive uncrating/setup fees or other invoice-padding charges. The parts and service side of the business didn't fare much better. The only role that the local powersports dealer has for me now is to kick tires and try stuff on while going online and buying it elsewhere. I like to support local businesses, but when every dealer in town (aside from the above mentioned BMW dealership) goes out of their way to make sure I have an unpleasant experience, and there are too many other dealerships out there who I'd prefer to do business with.
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I've always thought that would be a fun business too.

Based on some of the forums I read (mostly Greenhulk.net) I get the impression that it's hard to find good service at many powersports dealerships. I think it would be cool to own a powersports store that had a reputation for being able to fix what the other shops couldn't.
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Old 04-25-2012, 08:17 AM   #15
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If I'm not having my intelligence questioned, they are trying to rake me over the coals for some excessive uncrating/setup fees or other invoice-padding charges.
I had a similar experience several years ago when I was shopping for a new SeaDoo RXP. Some dealers would advertise a low price for the ski and then hide a laundry list of fees at the bottom of the ad in fine print.
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