Manufacturer direct

[Fred1956]

I have been watching different items go to direct distribution in this industry, EVS, Fastway, Smart Carb, Asterisk, etc. Basically I used to buy these products and others from my distributors and now I have to set up as a dealer directly with the manufacturer. It got me to wondering if the motorcycle manufacturers would ever go to this type (or some variation of it) of system at some time. I can see advantages for the manufacturers- possibly better margins at lower retail as the dealer profit is out of the mix, bikes are getting very high on the showroom, plus I've heard dealers talk of double digit numbers of some brands '13 models still on the floor and it's time to order '14s. I bought my used '10 GG sight unseen from a guy in CA & had it shipped but I'm probably not the norm. KTM, GG, Sherco & Husabeg?? all have demo fleets so it seems possible that you could get a chance to 'throw a leg over' a new bike at some point & try it out on the trail instead of just sitting on one in the showroom. Maybe if you bought a new bike and 'referred a friend' you could get 'manufacturers bucks' towards parts or even your next new bike??.Dish Network will give you $50 to refer some one that enrolls. I'm an independent repair/accessory shop so it wouldn't bother my business but if I was a dealer what would it do to me? Would it be- Easier because I don't have that floor plan to sweat out & the possibility of leftover units? or Harder because brand loyalty wouldn't steer customers back in to me for parts etc? It seems as though more and more people are online buying (even GG owners are shopping with Mikel) so could it extend to the whole unit instead of just parts and accessories?

So here is my question- Would you buy a new bike if you couldn't haul it home with you? Simple answer is yes or no but I'd love to hear thoughts on the whole thing

 

[bowhunter007]

when it comes to buying "anything" motorized...I'm all about being able to touch it, inspect it...whatever. What if my potential new bike had some sort deal breaking..."whatever"? I wouldn't buy a truck or car based on read reviews or commercials, so neither would I purchase a new bike in that manner.

 

[ScottyR]

I wouldn't think twice about buying a 2 stroke dirt bike online or across the country. I have done it several times. With the internet you can have parts in 2-3 days from anywhere in the world.

I might be a bit hesitant to buy a fuel injected 4 stroke without any service support though.

I think that the days of buying "online" direct from a OEM/distributor and having dedicated service centres are coming sooner than we think. Prices of bikes are getting so high and the margins are so slim already. The return on investment is so small the manufacturers may have no choice but to lower their prices and cut the middle man out of the equation altogether in order to keep people riding.

 

[twowheels]

A lot of where you stand on this issue may depend on where you sit

If bikes are a commodity (think YZ250s or CRF450s) then maybe it doesn't matter if you buy it at Walmart or a dealer, because in some sense the larger dealers are just like a big-box store.

If instead bikes are an emotional entity (as may be stated as the case for GasGas and TM and Beta) then perhaps a more intimate dealership experience is necessary. The problem is that the volume of Spanish and Italian bikes sold in a year doesn't support a vast dealer network, and you're left taking a chance on having a bike shipped or driving a long distance to pick it up.

If you decide you'll accept a bike shipped, it can just as easily come from a distributor or manufacturer or a dealer, but then who takes care of the customer from that point forward?

Looking at the automotive business as a larger scale but somewhat analogous example, it can be seen that manufacturers need to limit their supply and customer base in order to effectively run their businesses. Ford may sell a couple million cars a year, but they only have a couple thousand customers - the dealers. They only have to deal with that fraction of entities when it comes to deliveries, payments, warranty transactions, etc. and that makes the business manageable.

Some of the acceptance of the "ship it in" model may have to do with a rider's ability to handle what whatever little mechanical gremlins pop up, or their availability to spend time sorting out issues. I've bought bikes from all over the country sight-unseen because I was willing to invest the time to make them right if they arrived flawed.

All of that having been said, in a lot of ways many of my good customers have followed the "direct" model in that they bought their bikes elsewhere and so I have to differentiate my business in other ways instead of expecting return business simply because they bought a bike here.

 

[Rick]

I have never bought a dirt bike from a dealer......in fact the only brand new bike I've ever owned was the one I received for Christmas, back in 1974, Kaw KD80.
Bought my GasGas from a forum member in 2000, via email and telephone.

I don't feel the needed get all touchy freely with a bike on the show room floor.....if you know what you want.....you'll buy it.....IMHO.

 

[twowheels]

I don't feel the needed get all touchy freely with a bike on the show room floor.....if you know what you want.....you'll buy it.....IMHO.

But how do you know what you want ...? Who's word do you trust?

 

[Fred1956]

But how do you know what you want ...? Who's word do you trust?

That's where the demo rides come in, or the 'manufacturer bucks' we've all tried our riding buddies' bike or 'swapped for a loop', I give test rides on my Gasser for nothing now, if I could get $100-$200 if a guy bought a new unit that would be a bonus for me. In Rick's case where the smaller mfgs haven't met CA's requirements to have a dealer network he can still choose one of the smaller brands and get parts and info support as good or better than the 'box store' models. That would make it harder for him to get a test ride though if there aren't bikes in his area

Good thoughts Steve, with me being an independent repair shop the direct method may open up some avenues for me that aren't there now. i.e. Scotty mentioned his hesitation about buying a fuel injected 4 stroke, if a manufacturer made that training available to repair shops then I might have a new opportunity to offer service to customers. In most cases the shop with the best customer service gets the bulk of the business.

The direct model may work in the off road market as most of us are willing to 'do the work' but the street market will IMO always have to have a dealer network. Many of those riders are not of that mind set.

 

[Clay]

But how do you know what you want ...? Who's word do you trust?

Steve,
Didn't you sell a Beta to Glenn and this past weekend to a guy from east TN who traded in a GG to you? It seems that most of your customers are not local to you? Do you ship them or do they drive to your place?
Clay

 

[twowheels]

Steve,
Didn't you sell a Beta to Glenn and this past weekend to a guy from east TN who traded in a GG to you? It seems that most of your customers are not local to you? Do you ship them or do they drive to your place?
Clay

A bit of both in those cases - I drove and met Glenn partway and delivered the '14 Beta at the shop, but I have also crated and shipped.

 

[Rick]

But how do you know what you want ...? Who's word do you trust?

The choices are pretty easy for me:

1. By Jap and convert to offroad?

2. Buy Euro, Husky, KTM, GG, Beta, TM, Sherco?

3. 2 stroke or 4 stroke? Easy for me, 2 stroke!

Bikes of today are SO good off the floor that I think it would be easy to make a choice without having a shop support in the same town / city.

The interweb provides instant information at your finger tips for you to read and also watch video's which we did not have back in the day. With so many forums on the interweb for each brand I think a person can make a sound choice on what he or she looking for. It is pretty easy to discount the "noob" remarks about a brand based upon research.

The interweb allows us to have a shop, parts counter person and MFR support almost 24/7/365.

 

[twowheels]

That's where the demo rides come in, or the 'manufacturer bucks' we've all tried our riding buddies' bike or 'swapped for a loop', I give test rides on my Gasser for nothing now, if I could get $100-$200 if a guy bought a new unit that would be a bonus for me.

Fred, we actually offer a "Holeshot Program" out of our shop. If you buy a new bike and then your referral leads to a new sale (presumably to someone you let ride your bike or told about your customer experience) within six months, you get $100 for parts, service, or accessories. The program isn't capped either - if six of your friends buy bikes, you get six bills!

 

[Fred1956]

Fred, we actually offer a "Holeshot Program" out of our shop. If you buy a new bike and then your referral leads to a new sale (presumably to someone you let ride your bike or told about your customer experience) within six months, you get $100 for parts, service, or accessories. The program isn't capped either - if six of your friends buy bikes, you get six bills!

Good idea !

 

[desertgasser300]

Steve,
Didn't you sell a Beta to Glenn and this past weekend to a guy from east TN who traded in a GG to you? It seems that most of your customers are not local to you? Do you ship them or do they drive to your place?
Clay

Shipped from 2006 miles away. Thing is with Steve is that I started out ordering small items from him. And was surprised when he hand delivered to me in AZ. Luckily he visits AZ every winter for job related purposes so I had the opportunity to meet him. Even had the chances to ride and break bread with him. Had him to my house for dinner, met my family. Would I have just ordered a bike from him if I had never got to know him? Chances are maybe not. (no offense) But we grew a trust between us and with Steve it was easy to do. He is very upfront and honest with everything he does. So when it came time to get a new bike my choice of dealers was easy. I knew him and I trusted him. Some, not all dealers take a personal interest in there customers. Those are the dealers I look for and promote. Even though he sells Beta now I don't hold that against him......LOL.

 

[STEVEV]

Getting back to the "direct from manufacturer" part of it. Wouldn't the manufacturer really being putting the screwing to the brands dealers if they decide to sell direct? I'm all for small business and supporting the dealers.

 

[djroggen]

My experience, FWIW. I am going to post some questions. I don't know the answers, if I did I would start a dirt scooter business.

Do dealers get rich selling units? Do they break even selling units and parts make up for it? How much does a dealer have to profit to be profitable from the sales of the unit? ( I can tell you businesses in some industries can operate well on 2-3% margin and some out there can be closer to 75% and not make it (Try selling nuts and bolts))

Do dealers benefit having to floorplan bikes? Who benefits from dealers floor planning bikes? (I would say the manufacturer and the customer) Does the caliber of dealership matter in the answer to that? Does "If you build it, they will come" apply to a dealership that is built anywhere? (downtown Indianapolis or Heckla SD)

Why wouldn't a direct unit sales relationship work with dealers only carrying the parts? Does this answer depend on the size or the cash flow of the dealer? (I would say certainly) How do you choose what company to purchase from when choosing an internet site to purchase products from?

How many of you would buy everything you buy from a local dealer if they were in your town? 20 miles away? 50 miles away? Does it really bother you to purchase from an online source? Do they have to be knowledgeable in the bike you are buying parts?

Does buying a bike make you loyal to that dealer? Is it the customer service they follow up with that makes you loyal? Would you feel the same loyalty if you purchased only parts as you would if you purchased a bike from a direct source, bike shipped to dealer and assembled (for a price) or to your home?

These are the questions I think are interesting.

Sometimes I have a warped sense of reality.

 

[Ud_luz]

I've purchased 4 KTMs from a dealer that's 70 miles away. Excellent dealer, fair prices, very good service department. All of this actually means something to me. They have no problem pulling a part off a bike if they don't have it.

That being said I purchased my GasGas on line from one of the dealers here because there is no local support. If there was a local dealer with fair prices, good parts and service department I most assuredly would support them and our local economy.

I'm thinking about a '14 Gasser or Beta and I'll have to go back to buying from out of State. My only difference with no local dealers is to have a bit more extensive common parts kit.

 

[Clay]

Getting back to the "direct from manufacturer" part of it. Wouldn't the manufacturer really being putting the screwing to the brands dealers if they decide to sell direct? I'm all for small business and supporting the dealers.

Lets turn that around. What if a dealer starts carrying another brand? Isn't he "putting the screwing" to the original distributor? A dealer is capable of selling a certain number of motorcycles. If he adds a second brand he is not doubling his sales. He is diluting his business between to brands and the original brand gets "screwed". That happens constantly but the OEM/distributor gets no sympathy.
I'm glad Fred did this poll because it has started me thinking about a combined dealer/distributor model with Sherco (not with GG at all, ok?). It would be a sort of "No haggle" pricing thing. The dealer and I would have a slimmer margin but customers would pay the same and that price would be lower than the original retail. Keep in mind that the Sherco 2T is not a cheap motorcycle in the first place. It simply can't be priced the same as the orange brand since it has a two stage ignition controlled by an ECU. It could be under this model. Keep in mind that these are retail to retail comparisons. The orange bike could still be discounted more if the orange dealer wanted to discount his bike substantially. My dilemma is that the Sherco has more features so it CAN'T be as low as the orange brand.
What do you guys think?

 

[webmaster]

When I bought a gasgas in '01 - they didn't configure the bike the way I wanted it here in the U.S. so I bought from the distributor in Canada. Don Clarke, rest his soul - loved talking to him on the phone. Gruff and said things as he saw them...

Right after that - to support the local gasgas dealer in Vancouver, WA (no longer a dealer) - I went in and spent around $500 in parts/tires from them. They said they stocked alot of gasgas parts when I spoke with them about buying a bike so I wanted to keep them "healthy and happy".

Unfortunately, I walked in and said I want to get a couple of spares... Throttle cable, levers, etc. They had *nothing*.... That was my last visit to their shop...

My only point is that local dealers are great - but they need to stock a few essentials in order to keep you on the trail or in the race when you don't have time to wait for a shipment of parts - otherwise, they aren't living up to "their part of the bargain" and I might as well do everything mail order...

jeff

 

[Fred1956]

I'll give this a shot, at least to my knowledge & experience-

My experience, FWIW. I am going to post some questions. I don't know the answers, if I did I would start a dirt scooter business.

Do dealers get rich selling units? No, at least that is the impression I get from visiting with them Do they break even selling units and parts make up for it? Again I would say this is a fair estimation of the situation.How much does a dealer have to profit to be profitable from the sales of the unit? ( I can tell you businesses in some industries can operate well on 2-3% margin and some out there can be closer to 75% and not make it (Try selling nuts and bolts))

Do dealers benefit having to floorplan bikes? The dealer pays a fee to floorplan bikes, thus the concern over 'leftover' bikes, they've already spent several months in interest at that pointWho benefits from dealers floor planning bikes? (I would say the manufacturer and the customer)That would be correct Does the caliber of dealership matter in the answer to that? Does "If you build it, they will come" apply to a dealership that is built anywhere? Service, on the sales & repair side drive success, all dealers sell the same bike, the only difference is in the level of service, knowledge, etc. Steve seems to have the recipe correct from what I have seen(downtown Indianapolis or Heckla SD)

Why wouldn't a direct unit sales relationship work with dealers only carrying the parts? Possibly, there is typically more margin on the parts sideDoes this answer depend on the size or the cash flow of the dealer? (I would say certainly) How do you choose what company to purchase from when choosing an internet site to purchase products from?

How many of you would buy everything you buy from a local dealer if they were in your town? 20 miles away? 50 miles away? Does it really bother you to purchase from an online source? Do they have to be knowledgeable in the bike you are buying parts?

Does buying a bike make you loyal to that dealer? Is it the customer service they follow up with that makes you loyal? Would you feel the same loyalty if you purchased only parts as you would if you purchased a bike from a direct source, bike shipped to dealer and assembled (for a price) or to your home?

These are the questions I think are interesting.

Sometimes I have a warped sense of reality.

I skipped the rest of them because that is the limit to my general knowledge. I am a small parts/service/repair shop. I work with every body and every brand & model. I understand the line at the internet counter, I also have customers who drive to middle of nowhere (me), right past the big fancy dealers guys because they deal with the the guy who is doing the work not a representative of the company. I'm personally invested in the success/failure of my business. I've also learned over the years that people will get drawn in by the fancy building, signs & commercials but only good service & proper repair will keep them there. I've also learned that people are willing to pay a fair price for a fair product. We only have one GG dealer in Arkansas but there are many GG owners so I stock GG parts, the general stuff as I don't stock a rod, crank, cases etc. But if you need gaskets or a piston, wheel bearings, brake pads, or filter- I probably have it but the only dealer in the state probably doesn't This also applies to other brands as well, my customers are amazed at times because they come in and ask for something AND I HAVE IT....the dealers don't

 

[Wimpy525]

Would have to say buy from the dealer. I buy everything I can from my local dealer Matto Cycle. When I had problems I went to Bud he handled it. Although Clay is a stand up guy and will deal with you direct, not all importers will make themselves as availible to help you out. I have broken a lot of stuff this year back to back races and Matto's allways had what I needed or was able to get it in time for the next race. If you develope a relationship with the shop they will take care of you.