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Now More Than Ever…

January 24, 2010

Several people have sent us the Denver Post story about Sportique’s financial woes. That’s certainly a sad story worth reading, and proof that even the best scooter dealers are in big trouble right now. Sportique’s been around for twelve years and certainly has a reputation equalled by only a handful of shops, so if they’re in trouble, we’re all in trouble.

A lot of fly-by-night scooter shops (and a few good ones) have already closed down, and many more will close in the next few months. This attrition of dealers is actually a good thing in one way: we’ll finally see fewer strip-mall dealers selling questionable or illegal bikes with virtually no aftersales support. Dealers that survive are the ones that know their stuff and love scooters. Anyone who’s been involved in scootering for more than a few years knows the market is brutally cyclical, but scooterists in the know hoped to see these “good guys” — great shops run by true scooter fanatics — survive. These shops aren’t bandwagon jumpers, they knew what they were getting into. They realize that a hemorrhage of sales can be replaced with chirping crickets in a matter of months. A few shops have been around since the eighties and have already been through the cycle. But even with vision and responsible planning, the triple whammy of the global recession, the end of a scooter-sales boom, AND the winter lull is proving too much to endure.

So this is a call to arms: if you like your local dealer, they need your support now more than ever. It just plain sucks to be a scooter dealer right now. So if you’ve been considering a new bike, or a performance upgrade, or a new jacket or helmet, or a rebuild, now’s the time to do it, and it’s more critical than ever to buy local and support the people that have supported you. Your dealer’s prices might be a bit higher than online or catalog prices, but they’ve worked hard for your business and chances are, they’re up against a wall. Your dealer needs you. Fewer dealers and fewer sales means fewer new scooter models being imported and fewer new scooterists, and reduced parts and accessories availabilty. If your local dealer closes, you may be stuck driving to the nearest big city (or the bigger city past that) for service and accessories. If importers start shutting down, you’re going to need to learn foreign languages to find parts.

If you’re new to scootering, 2008 was as big as it gets, but the lean years are great, too. A smaller scene separates the real life-long scooterists from the trendies, creates tighter bonds between scooterists, and paves the way for the next ‘boom.’ We’re going to lose some dealers, it’s a fact, but we MUST keep the best dealers going. With just a little boost from customers to survive these worst-case-scenario next few months, the best shops will eventually thrive, even through the lean years ahead.

Comments

15 Responses to “Now More Than Ever…”

  1. jprestonianNo Gravatar on January 25th, 2010 12:12am

    Thank you for this.
    .

  2. hardd1No Gravatar on January 25th, 2010 5:01am

    Too bad the distributors haven’t recognized this isn’t 2008 any longer..Distributors are still demanding the same prices from both the consumers and their dealer base…floorplan incentives are not the answer….no dealer is going to carry large inventories due to the current rate of sales be it a powersports entrepreneur or your local Chevy dealer….everyone knows this is now 2010 and people expect to buy a NEW current model from showrooms…if a showroom is made up of last year(2009) models they are clearly “left-overs” and should carry a substancial discount…distributors have warehouses full of last years models and refuse to offer NEW (2010) until the the inventory is depleted…geez, .this practice is crippling dealers….lower the prices stupid and let your dealers merchadise your product!!… Sportique has been denied help from both the bank and their scooter distributors…’tis a pity…old proverb saying: “only the strong survive” has been replaced with “only the smart survive” in todays economy.

  3. jprestonianNo Gravatar on January 25th, 2010 9:33am

    old proverb saying: “only the strong survive” has been replaced with “only the already wealthy survive” in todays economy.

    Fixed your typo.
    .

  4. illnoiseNo Gravatar on January 25th, 2010 10:07am

    hardd1, even the smart are having a damn hard time.

    Most scooter shop owners (the ones that got into it for the right reasons) are the first to admit they knew nothing about business before they got into it, but I still think they have an advantage over the MBAs in that they know the market and their customers. Some quality shops are closing just because of bad management, but it seems like many of the owners that came into it with little or no business experience learned fast and made smart decisions, but they’re still in trouble.

  5. BrookeNo Gravatar on January 25th, 2010 2:42pm

    Hey Debbie Downers, I hear scooters are the next big thing, pay for themselves and some models collectible right out of the box.

    Have faith.

    If not faith, have a few hundred bucks in cash squirreled away in an envelope to pick up those bargains that have sat in a garage for a few years with 180 miles on the clock and just need a new plug and carburetor cleaning. (anyone with such a Velocifero, contact me)

  6. pocphilNo Gravatar on January 25th, 2010 3:38pm

    Don’t listen to him…these scooter dealers have been getting rich off of us for years. Oprah said I should start my negotiations at 30% off if I’m considering buying a new car, I know that has to hold true for scooters too.

    Fact is, even the good, strong and smart dealers are gettin’ shafted because the failing dealerships are selling their inventory on ebay / craigs etc. to build up some cash before GE makes the distributor come get their bikes. You just can’t compete with a guy selling out of the business for less than I paid for it.

  7. NoHo MikeNo Gravatar on January 25th, 2010 6:20pm

    Phil is 100% correct about the failing dealers selling at cost (or below). Too many auto dealers and golf cart shops got in when they thought they could make a killing.

    Lately I have been focusing on used scoots. Folks these days want to save some bucks, and I can get them on a quality two or three year old scoot for the price of a new Chinese POS.

  8. hardd1No Gravatar on January 26th, 2010 5:04am

    hmmm, great idea acquiring and selling used scooters…..proves there are still scooter buyersout there at the right price-range…….my humble opinion remains the same that msrp’s need to be adjusted to the current demand. Scooter sales for 2009 were reportedly down nearly 60% from 2008…Sales will continue to plummet to similar free-fall numbers unless there is change in marketing…

  9. BrookeNo Gravatar on January 26th, 2010 9:48am

    hardd1, I think you are right though it’s more difficult to do when the margins are slim on some lines. Taking less is one thing, taking a loss is another. Just clearing out in-store inventory at cost (or less) will not feed anyone’s kids. The distributor isn’t going to discount models that are already pushed on to dealers so any discounts on current inventory come at the cost of the dealer alone. A price slashing on a Piaggio product to move it off the showroom is called a going-out-of-business sale. And to comment on your last thought, I don’t think it has anything to do with marketing and more to do with the market. It’s small and I don’t think advertising will help it get bigger. It wasn’t ads that drove the 2008 spike.

  10. lady_bajajNo Gravatar on January 26th, 2010 10:45am

    After years of taking growth for granted, we’ve had to learn plenty of lessons the hard way this year. I know that at Sportique, this has been a painful but fruitful year- there is no going back to the times of spending on things that simply do not pay off.

    Advertising needs to be rethought (branding is cheaper AND more effective). We need to work together more. Inventory needs to be closely examined.

    If we can get through the next 54 days, we’ll come out of this better than ever. We’ve seen both perfect storms in a brief 24 months, and we’ve learned a lot… I’m excited to move forward, armed with the lessons from both the dizzying heights and heartbreaking lows.

  11. illnoiseNo Gravatar on January 26th, 2010 11:10am

    right, print/tv advertising has always been a luxury for scooters manufacturers and shops… targeting towards existing or prospective scooterists makes far more sense than buying a spread in Newsweek. PiaggioUSA spent a lot of money on high-profile “statement” ads in the NY TImes that created a big buzz… but only WITHIN the scooter/eco-transportation community, the ads ultimately hyped initiatives that went nowhere, to an audience that didn’t care.

    Would a large-scale, really well-considered national media blitz create demand for scooters? Maybe, but PiaggioUSA does not have the money, and their ad-agency-hopping and campaign-hopping seem to be proof that they’re incapable of delivering a simple clear message. Canadian Scooter Company spent a lot of money on quality national advertising, and it seemed relatively successful, though that’s a whole ‘nother story there.

    Everyone involved with scooters knows that the best ad for a scooter is a running scooter on the road. Anyone who rides has talked face-to-face with hundreds of potential customers, and this is the very most important transaction in the scooter market. Your customers need to LOVE your brand and share it with everyone who asks them about it. Genuine NAILED this, by not letting anyone out of a dealership without a handful of brochures and business cards. Piaggio, meanwhile CHARGES their dealers for literature, and at Dealer Expo a couple years ago, they showed up with 1/10th the brochures such an event would require, and regulated their distribution to interested dealers.

    Dealers are going to find that manufacturers and distributors are going to have even LESS to offer as far as marketing/advertising support in the near future, so they’re going to need to band together and support grass-roots non-brand-specific efforts designed to promote scootering in general. An industry organization that could produce some quality materials that can be used on a local level to tie into a modest national campaign would be a great first step. I hear things are moving in this direction, which is awesome.

  12. hardd1No Gravatar on January 27th, 2010 7:08am

    the marketing change I have in mind is lowering msrp pricing…maybe a consumer rebate program that would include existing inventory and future orders???..nah,being realistic, I know distributors won’t go for it….so, the alternative would be to lower prices on new orders and dealers can cost average the new inventory with the current stock…advertise the new revolutionary msrp price cuts on mfrs webpages, dealer sites, blogs, facebook, twitter…etc should be effective at very little cost……gotta move out last years 2009 models and bring in new 2010’s.to preserve consumer confidence in the product….

  13. illnoiseNo Gravatar on January 27th, 2010 10:06am

    It seems they’d never wanna cut MSRP, but the thing is, the MSRPs for so many scooters (not just Piaggio’s!) are ridiculously higher in the U.S. than they are in other parts of the world. They blame homologation costs and small volume, and that justifies SOME of it, but with European standards getting stricter and stricter, you’d think that the emissions stuff is pretty much evening out, and it doesn’t cost THAT much to substitute generic DOT turn signals. The dollar is weak, too, but I dunno, it seems like if they want to succeed, they should be focusing on making US models as affordable as they are elsewhere.

    The Honda SH150i is the perfect example, it’s the top-selling scooter in most of the world, they make hundreds of thousands of them, and everyone loves it. It should have been a home run when it arrived in the US, but at an MSRP that was something like 20% higher than the rest of the world, it suddenly lost ALL of its charm. Honda will pull it off the market in a year and say “scooters don’t sell in the U.S.”

  14. illnoiseNo Gravatar on January 27th, 2010 10:10am

    Also, let’s never forget that Piaggio/Vespa (like anyone that imports their own product) is double dipping, by running their own distributor, they make profit from manufacturing AND distributing. You’d think that’d help keep prices down, but Piaggio SpA AND PiaggioUSA seem to be interested in nothing but profits, at the expense of helping each other succeed in America in the long run.

  15. hardd1No Gravatar on January 28th, 2010 6:49am

    Honda could come in and take command of the USA scooter sales…they have already cut the prices on the Metro and Ruckus to the under 2000.00 msrp…yeah, only 50cc…but liquid-cooled 50cc engines……..should be able to pass these bulletproof scooters on to your grandkids…Honda could make industry tidal waves with a 20% price cut on the Elite and SH 150…toss in a manufacturers finace deal and watch ‘em murder the competitionl

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