By Matt Bolch
Accepting trade-ins and selling preowned motorcycles are standard operating procedures for many powersports dealers. But the promotion of preowned vehicles can vary widely.
“Selling preowned goes hand in hand with running a dealership,” said Bob Glenn, general manager and vice president at Granny’s Motorsports in Sarasota, Fla. “We will trade for anything, but whether we retail it is another story.”
Granny’s occasionally will run advertisements touting its preowned motorcycles, but the dealership has had great success with advertising used bikes on its Web site. Glenn says as many customers enter the dealership these days looking for preowned bikes as they do requesting to see new ones. While new bike sales at Granny’s have held steady, Glenn says preowned sales have increased by 20 percent.
According to the national survey of 150 dealers conducted for Powersports Business, just more than four in 10 dealers reported having a separate advertising or merchandising budget for the preowned category. Regardless of whether a dealership reported a separate line item for used motorcycle advertising, sales in each group were up by 18 percent.
New bike sales at Yamaha-Suzuki-Kawasaki of Canton (Ga.) have remained steady, bolstered by a 10 percent boost in used sales, says owner Laurann Cantrell. “We’re just happy to sell anything,” Cantrell said. “Unlike food and groceries, people don’t have to have a bike, so when they come into the shop, they’re happy people and ready to buy.”
It’s not surprising that Cantrell reports sales of preowned bikes started picking up as the economy started showing signs of weakening. The dealership often advertises the availability of preowned units as part of its marketing campaign, but Cantrell says ads rotate and feature used bikes about one-half the time.
Ken’s Cycle Center, Highland Springs, Va., also uses its Web site with great success to promote and sell preowned motorcycles, says Ken Germain, owner. While new bike sales have declined 10 percent at the dealership, sales of pre-owned bikes are up 15 percent. Germain says he keeps 20-30 used motorcycles on hand at all times and actively seeks trade-ins.
“Some of our new bike sales come because of trade-ins,” Germain said. “We actively pursue used bikes through trade-ins and outright purchases. The marketplace section of the Web site probably is the best thing about it. When people call in asking about used bikes, we can direct them there.”
Two Brothers Powersports, with locations in La Crosse and Onalaska, Wis., also features its used bikes on its Web site, says Jason Wucki, sales and F&I manager at the La Crosse location. “We get a lot of Web hits on our preowned products,” Wucki said. “The category is very important to us because we can make a little more money, and we’re not competing dealer to dealer on pre-owned.”
Wucki says Two Brothers differs from competing dealers by sprucing up its used motorcycles before putting them on the showroom floor. “Our preowned (models) are ready to rock ‘n’ roll,” Wucki said. “Other dealers say, ‘Used is used.’ Because we service our used bikes before selling them, we usually pull retail or above out of them.”
The dealership is in the enviable category of having both new and preowned motorcycle sales increasing at about 12 percent each. Starting in 2006, the dealership began using classified advertising in local periodicals to promote its preowned products and reports some success with that technique. Two Brothers also has started a direct mail marketing campaign that promotes the entire dealership, including the preowned category.
A good selection of both new and used bikes “gives me the option of finding the right bike for anyone who walks in the door,” said Glenn from Granny’s Motorsports. “If they can ride, I can find them something to ride on.”
In addition to trade-ins, the dealership buys directly from customers and accepts consignments, which Glenn calls “a great way to obtain merchandise without tying up inventory.” With consignment bikes, the amount of money the seller will take for the bike is negotiated up front, and everything above that amount is profit for the dealership. Some of the bikes Granny’s takes in for trade are not worthy of resale at the dealership, so those bikes are either sold for parts or to other local dealers who always are looking for older bikes to salvage, Glenn says.
“It seems like preowned bikes are easier to come by this last quarter,” he said. “It’s good in a sense because you can never have too many preowned bikes because there is a market for them, but I think the economy is having an impact on the increasing inventory.”
Glenn says although Florida is a year-round biking state, demand rises and falls during the year, a fact the dealership tries to keep in mind when acquiring preowned motorcycles. However, the dealership doesn’t have strict limits on the number of used bikes it carries in inventory, he adds.
The display of preowned bikes varies from dealership to dealership.
Two Brothers Powersports, for example, displays new and used bikes together, segregating them by rows, says Wucki. At Yamaha-Suzuki-Kawasaki of Canton, new and pre-owned units are in separate areas of the showroom.
“If someone asks for used bikes, we’ll point them in that direction, but some people wouldn’t have a used bike,” Cantrell said. “You have to talk to each person, find out what they’re looking for, what they want to do with it and what they want to spend. Carrying preowned is important because often people will look at the used bikes and buy something new.”
Copyright 2008 Powersports Business