An electric scooter manufacturer’s change in distribution strategy has helped dramatically increase revenue as it has transformed from focusing principally on R&D to the selling arena.
Vectrix Corp. is reporting revenue of $6.7 million for its fiscal year, which ended Sept. 30, a rise of more than 700 percent from the previous year period.
The manufacturer, which has its headquarters in Middletown, R.I., and produces its product out of Poland, sold more than 1,180 vehicles during its fiscal year to its dealer network.
The dealer network grew substantially last year as the company made a strategic change in its distribution. Vectrix CEO Michael Boyle told Powersports Business the company originally looked at going straight to the consumer with flagship stores. That plan, although it had some initial success, proved fairly costly.
“When you think about the efficiency of the marketplace and you look at the existing powersports network across the world, it became apparent to us it would be much more efficient to use the existing distribution channel,” Boyle said, referring to powersports dealers. “And it would give us the ability to support those individual dealers in a much more robust way” than trying to develop the company’s own set of retail outlets.
As a result, the company’s dealer network grew from 38 to close to 170 in the North American and European markets by early October. Boyle said the company is seeking to grow that number to close to 300 by the end of next September. Eventually, the company would like to have 400 dealers, with 60 percent of those in North America.
Boyle believes the opportunity Vectrix has of luring a different type of consumer, a nonpowersports enthusiast, into a store has made the brand enticing to industry dealers. Boyle notes Vectrix also benefits from this new relationship.
“We benefit on that because a number of people who come into the store wouldn’t necessarily be looking for an electric, two-wheel vehicle. But as they see it in the store, it peaks their interest and they start looking at it as an alternative to a gas vehicle,” he said.
The company has worked with dealers on the existing product’s MSRP, which went from around the $12,000 neighborhood to under $10,000 last year. “That was a very attractive price point for the product (actually $9,350) and we saw very, very good flow-through for that price point in the second half of the year.”
Now, Boyle said the company is working on a second dealer request — broadening the product line.
Vectrix is planning on adding two more vehicles to its flagship model, the Vx1. This spring, the company will introduce the Vx1e, which will use the same platform as the flagship but will have slightly less acceleration and top speed as well as a lower price. Then next summer, the company will present an entry-level model called the Vx2. That scooter is expected to have the electric equivalent to a 50cc internal combustion engine. Vectrix is then expecting to change that model’s drivetrain over time to become equivalent to a 150cc internal combustion engine.
That increased product range will give Vectrix and its dealer base more coverage of the overall scooter market, a fact that Boyle believes will lead to “exponential growth” next year.
Copyright 2008 Powersports Business