A odd question

[jfrost2]

I always wondered how much genuine sells buddy 125's to dealers for, I'd like to know a price range, but if no one wants to speak of it, thats ok, I never really cared until someone told me "we only sell 4-5 scooters a month in our dealer" and I though "how do they survive?!"

I dont mind if there is a mark up, I think the buddies are worth every penny, but I was wondering how can dealers survive if they sell so few scooters a month?

I know service and other stuff helps, but are buddies marked up to where it does let dealers survive? Or is there no mark up at all?

[ScooterTrash]

If you want to know open a shop . The markup is different for all scooters and all shops. I honestly don't want to know

[FA-Q]

Is the dealer in Fairbanks? I run a shop and 4-5 scooters a month would be reason to get out of the biz. Check around back for a grow op.

[jfrost2]

The dealer I mentioned is doing so well and successful, but with low low prices and free prep and installation, I dont get how they do it.

I wouldnt mind myself becoming a dealer, but I'm way too poor, I'd never be able to buy a shop let alone fill it with bikes.

[FLMINI1048]

If you want to know open a shop .

That reminds me of something I learned a long time ago when I worked in a motorcycle shop.....

How do you retire with a million dollars in the powersports business? Start with two million dollars.

[nissanman]

There's more markup in the accessories and service end of the business. A Rattler with a $2600 retail has a cost near $1800, but that's before shipping costs, I figure about 1000 stamps should get it there.... S&H around $400 most likely. Leaves the dealer with $400 They've earned it. There's a reason retail stores order parts and accesories in bulk, pay S&H on the lot of em instead of each part. A $10 widget usually costs $5, ironically the more expensive the item the lower the markup usually is

[nissanman]

After all, if a $22,000 car only has $1500 of markup in it plus $500 of holdback... That puts the profit margin on a scooter higher than most automobiles

[jfrost2]

I dont mind mark ups, just never knew how these places survived like this. Thanks for the info

[illnoise]

Right, there's really not a lot of markup (and the real question is how much does Genuine pay PGO for the bikes?). Dealers (barely) survive on that, plus service, parts, and accessory sales. And some must sell heroin on the side because I've done the math and it doesn't make sense. I used to think they made some money on financing too, but I think I was wrong about that.

Piaggio is even less profitable, their markup is smaller (though their prices are higher, so it probably works out to a similar profit per bike). And, since PiaggioUSA is a fully-owned subisdary of Piaggio&Co. SpA, they're basically marking up the bikes, selling them to themselves, then marking them up again and selling them to dealers. Plus I hear they have more demanding requirements as far as minimum orders and making dealers buy marked-up store fixtures and displays. Genuine operates out of a ramshackle warehouse in an industrial neighborhood next to a cemetery in Chicago, and Piaggio has lavish offices in a high rise in manhattan, so do the math there.

[Dooglas]

My dealer indicated to me that he makes about $300 on the sale of a Buddy. His pricing is very competitive and he sells quite a few more than 4-5 scooters a month (Buddys, Stellas, and Vespas). For all of that I imagine that winter is a pretty thin time. Likewise service and accessories are clearly an important part of his business.

[DarbyWalters]

To make money most shop sell more than one brand...Genuine, Q-Link, Kymco, Lambretta and others are sold at the shop I purchased from. They also have a decent selection of used bikes.

[EP_scoot]

I just can't see anyone in a scooter shop being able to live large unless they have a HUGE shop in a large town and no competition.
My local shop has 3 or 4 guys, plus the over head, interest in carrying the product, etc , etc. Lots of expenses. They also sells lots of scoots and merchandise.

The one thing I do see is that they love scooters and scooter people and I think they would do it even if they did not make a lot of profit. Just because that is their lifestyle and what they want to do.

[illnoise]

interest in carrying the product, etc

thats' something that's a killer, most people don't realize dealers get their bikes on credit from the distributor, so they have, I think usually, 90 days to sell it or they start paying interest on the "loan." So if you have enough bikes sitting in inventory over 90 days, you're losing even a bigger chunk of your dealer margin. And of course there are freight and prep charges, too, which some dealers eat, and others pass on to the customer.

The one thing I do see is that they love scooters and scooter people and I think they would do it even if they did not make a lot of profit. Just because that is their lifestyle and what they want to do.

I think that's the case for the best dealers, and their love of it shows, and infects others, and it's a healthy symbiotic relationship. Espeically ones that have been around for a long time and carry the more reputable, lower-margin brands.

Then there's another breed that see "scooters are hot" and want to cash in. They're usually late to the game, and don't want the risk (or are in a saturated market) so they're buying Chinese scooters for $300 and selling them for $800. They usually don't last long because they're doing warranty work and building a bad reputation. I've recently met a few guys who have stepped into this market and are making good money just fixing internet scooters and crappy scooters from other dealers that don't know how to fix 'em, maybe that's the future, I hope not.

[nissanman]

It is also possible that a quantity discount or bonus is offered to dealers by the manufacturer. Sell 20 bikes in 60 days and we'll throw you an extra $100 per unit type deal. It's a risk for the dealer cause if they don't sell them they have too much inventory on hand. If they do sell the quota it's nice for a bonus, but it won't go far. Plus next year their quota will likely be a few units higher.

[jfrost2]

I also forgot that some dealers charge for misc work, if they dont have a price for the type of work, they just charge it as 1 hours work or how ever many hours it took to work on, usually dealers charge 50+ dollars an hour, I guess that helps too!

[ericalm]

I can't guess as to how that one dealer survives. If they're a new dealership, they could quite possibly be burning through loans or some other capital. If they've been around a while, they may be getting by on parts and service. There are vast differences in the economics of car dealers and scooter dealers. Most scooter dealers are mom & pop operations and a lot of them scrape by as they can.

4 or 5 scoots a month seems very slim to me, though. Are you sure that's not 4 or 5 Buddys? Or was that 4 or 5 during the winter? I imagine up north, winter is very hard on dealers. They probably have to spend all summer saving their acorns.

[nissanman]

And boats would be different from cars, and motorcycles and snowmobiles... The basic setup for a retail vehicle operation is the same. Profit margins are profit margins. Also a larger operation has waaaayyyy more expenses. Just the electric bill in a 32,000sq/ft dealership runs over $12,000 a month. That's just to turn the lights on. Then there's the phone, office supplies, oh yeah employees, advertising, taxes, health insurance.... you're lucky if your monthly expenses stay under $500,000. Even if you sold 200 cars that month you need to bring in $2500 per unit to break even. Why do you think so many dealerships are closing down lately?