Category: Business Growth

We’re well into the second month of the year and for some of you, those New Year’s resolutions have already fallen by the wayside. Exercise more? Eat healthy? More quality time with family? Make more money? How? One of the first steps is to ensure your inventory meets the needs of your customer base.

Let’s face it. There are motorcycles we are in love with, and there are motorcycles our customers want to buy. Are you running a dealership that caters to the type of customer you want to have? Or, is your inventory based on the type of customer you actually have? Take a close look at your neighborhood and the types of customers who visit your dealership. We all have those customers who come in every week to talk about the latest and greatest. But, they aren’t in the market to buy – they’re in the market to talk. Stocking inventory for those customers is a losing proposition.

Is your neighborhood transitioning from Baby Boomers to Millennials?

Is there an influx of new transplants fresh out of college and saddled with debt?

If these are your potential customers, then your inventory should have a healthy mix of starter motorcycles, affordable new brands, and some certified pre-owned motorcycles. Of course, you should have a few bright, shiny fully-loaded motorcycles. After all, those Baby Boomer customers are still around and ready to ride. However, your biggest opportunity to make money lies with a generation that is swiftly outpacing Baby Boomers in terms of spending power. According to Forbes, as of this year, Millennials have the most spending power of any generation.

2017 marked a lackluster year for many powersports dealers. Unit volume did not meet projections, and we’re seeing more dealers sell inventory at or below cost just to keep it moving. While it appears that 2018 will look much the same as 2017, there is one caveat. Pre-owned unit sales will most likely continue to outpace new unit sales, due to consumer demand.

Dealers would be wise to analyze today’s consumer. Changing demographics show that Millennials and are overtaking Baby Boomers in terms of spending power.  These price-sensitive generations are more likely to consider pre-owned a more appealing option for their already-strained budgets.  New bikes are often priced outside their comfort zone. As a result, consumers who delayed purchasing a bike in 2017 will likely shop for gently used bikes in 2018.

Because of this shifting demographic and financial constraints, powersports dealers should outfit their pre-owned inventory with late-model bikes that either have a little bit of manufacturer warranty left, or are just outside of manufacturer warranty coverage. In addition to being top sellers, these bikes offer the most opportunity to sell F&I products on the back-end, helping powersports dealerships increase their profit potential. Adding a CPO component can also help move these bikes off the floor and give the consumer an added value component, as well as help to increase repeat service drive business.