This year has certainly brought a lot of positive gains to the powersports industry. The government stimulus coupled with “stay at home” orders early in the year propelled buyers to snatch up ATVs and other recreational units in record numbers. According to CDK, Lightspeed DMS same-store sales for June were up 48.6 percent in the U.S., down slightly from May’s phenomenal 60.7 percent increase in sales.
Anecdotally, the third quarter has continued to be strong regardless of the fact that OEMs simply cannot move fast enough for dealers to capture all the opportunity available. While many dealers are reporting inventory shortages on both new and used bikes, they are also reporting significant gains in pre-order sales, especially within the off-road sector. However, PWC pre-orders are starting to back off because of the season change into fall. Overall, revenue has grown 51.2 percent.
This sales cycle has certainly been a windfall for powersports dealers. However, there are still challenges ahead as we wait to see if and when a second stimulus bill will be passed, as well as the progression of the COVID-19 pandemic in the fall. In light of these factors, how can you protect those gains you received in the second and third quarter?
Maximizing Revenue Gains
Chances are, the past two quarters have been a whirlwind of activity. Units practically sold themselves and there was no shortage of consumer interest. Now, you may be facing inventory issues on both new and used bikes. New models, with higher price tags, are starting to hit showroom floors, just as the consumer ratchets down their interest for the winter. Suddenly, what was a very easy sales process has generated some bumps in the road.
If unit sales are declining, what can you do to increase profit on every unit sold? Attaching solid protection products can provide a significant value-add to your customers as well as generate additional per unit revenue.
For used bikes, providing pre-owned protection products complimentary to your customers, such as EFG’s Million Mile Limited Powertrain Protection, can generate increased consumer interest in your brand, and position your business more attractive to both consumers and lenders. This protection gives consumers the confidence that they are buying a quality bike, and the confidence to sign on the dotted line, even when their confidence in the economy is low. Additionally, while credit is becoming much tighter, lenders are looking for smart deals guaranteed to turn a profit. Don’t just sell a bike – sell a bike with revenue built-in!