Chinese Food for Less!

Last month, a dealer sent us an “end of the year sale” email that he received — unsolicited — from a Chinese scooter importer.

2strokebuzz policy is to maintain a certain level of privacy regarding wholesale prices. Dealer markup on most scooters is pretty modest, and keeping that number a secret is only fair.

In this case, though, I think it’s only fair to consumers to show how low dealer prices have dropped on Chinese scooters. So we’ll list the prices, but not the importer. The importer in question is not a top brand, but they’re a brand that’s been around a while and advertises in scooter and dealer magazines, so they’re not a bottom-feeding internet outfit, either.

Here’s a sample of their DEALER prices on 2009 models:

150 Scooter: $400
150 “Deluxe” Scooter: $450
150cc ATV: $500
250cc Motorcycle: $900

Turns out, a few weeks later, the importer filed for bankruptcy, which is hardly surprising. But even if these prices are below their cost, what does that say about the quality of the scooters? Would you ride a 150cc scooter that cost $500 to build? Think about all the cost of all the individual components of the scooter, the labor to assemble it, and the shipping costs to deliver it across the country. Think about the cost of running a business, warehousing the scooters, supplying parts and service. And even if the importer is taking a bath on these bikes, the manufacturer in China surely made a couple hundred bucks in profit, selling it to the importer. Do you want to ride a 150cc scooter that cost $300 or less to make?

Do you want to pay $900 or $1200 for the opportunity? Dealers sell these bikes because they can mark them up 100% over dealer cost, and they still look like a bargain compared to the (quality) competition. So the importer is making more per scooter, the dealer is making more per scooter, and customer gets a particularly crappy scooter, without even getting the good deal that the dealer got. These sales hurt quality dealers and importers, who put a higher percentage of the customer cost into manufacturing and quality assurance.

5 thoughts on “Chinese Food for Less!”

  1. I feel betrayed. I’ll never email one of my price lists to 2strokebuzz again.

  2. Zongshen, the #2 scooter and motorcycle manufacturer in the world (Behind Honda #1) makes a very significant impact and produces huge volumes that end up imported under different brand names.
    I was involved in a start up that never consumated, but we brought in a 150cc scooter similar to a model currently sold by United Motors, with remote control start and alarm.
    The two container loads that we imported cost $270 FOB Shanghai per scooter.
    With shipping, landed, assembled cost was less that $400.

  3. Years ago, at Harvard Business School, I learned a basic formula for setting MSRP: factory cost X 5. And the formula still seems to hold true. So a scooter with an MSRP of $1,000 actually costs $200 to produce. And that’s pretty scary!

  4. Yep – How much quality can you build into brakes, rims, tires, frame, electronics, cylinder/piston, cases, seat, lighting etc. for $200?

    We just got an email from a similar Chinese company offering us 3.50×10 Scooter Tires for just $2.35 each (minimum quantity purchased 100).

    Sure, I’d trust ’em.

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