F&I and Computers

Internet bounces back
We’ve talked in these pages previously about the Internet and the potential it holds for generating powersports profits. Even though we’ve all seen the dot.com boom go bust, that’s no reason to give up on the Internet itself.
Two companies, e*Bay and Cycletrader, are offering sophisticated alternatives for dealers who want to unload excess inventory, and a third company, PowerSports Network (PSN), provides a package of Web site services to dealers, including capabilities to upload excess inventory easily to the e*Bay and Cycletrader.com Web sites.
Wholesale distributors also are using the Internet to dispose of overstock items that haven’t sold through their normal distribution channels to dealers.
And, finally, more and more dealers are aggressively using the Internet to sell everything from OEM parts and accessories to actual machines. In some cases, this approach of selling machines has caused conflicts between dealers and between dealers and OEMs. In at least one case, it reportedly led to the termination of a motorcycle dealer’s franchise agreement by the dealer’s OEM.
Cycletrader is still successful
In this report, we’ll identify some of the most important trends and describe some of the newest Internet services available to dealers.
CycleTrader is the oldest Internet company offering powersports dealers a way to sell excess inventories; powersports machines first were listed in 1996 at the Traderonline.com site, which list parts and accessories as well as machines.The move was so successful, that the separate CycleTrader.com site was launched in December of that year.
The target marketing continued last fall with the opening of ATVTraderOnline.com. The site was officially opened in February during the Dealer Expo in Indianapolis.
“As we worked on it this year, there’s been a huge response because it’s dedicated solely to ATVs and because of the big demo of ATV users compared to motorcycles,” says Sara Brueck Nichols, marketing coordinator at CycleTrader.com and ATVTraderOnline.com
The ATV site drew 215,000 unique visitors in June. That number represents the number of individuals who came to the site, not the number of times they came nor the number of pages they viewed. There are approximately 1.5 million searches per month on the ATV site, Nichols said.
By comparison, CycleTrader has about 1.5 million visitors monthly, conducting 7.6 million searches per month, usually two or three searches per visitor.
ATV growth can be seen in the number of machines listed, as well, climbing from an average of about 65 machines per month in November to about 5,000 ATVs today. There are about 82,000 motorcycles, snowmobiles and PWC listed on cycletrader.com today.
In the next few months, Nichols said, there will be a big push to build up the snowmobile listings on CycleTrader.com because of the large inventory of non-current machines that are being held at the dealer level.
“Dealers are grasping at straws,” she said, “for ways to get rid of inventory. How do they get from states without snow to states with snow?”
For dealers who are concerned about the Internet’s international reach, CycleTrader has developed a new zip code search capability launched in June. A search can be limited to a specific number of miles from a given zip code.
“That’s really a nice feature,” points out Nichols. “Dealers can have extra exposure that they might not get from their local newspaper or radio. And they know people are serious about making a purchase.”
Another new feature is Price Checker, which allows visitors to compare prices of vehicles.
Perhaps one of the best features that CycleTrader.com offers its dealers is the ability to track their advertising’s return on investment. They can easily access reports within their account on CycleTrader that show them how many times their ads were displayed in search results, how many times their ads were viewed, and how many potential buyers sent them an e-mail from that ad.
CycleTrader also enables dealers to post their inventory on a real-time basis. As soon as a dealer punches a button, the inventory is uploaded. Dealers can handle the listing process themselves or pay CycleTrader to do it for them.
Dealers pay for listing machines on a Trader Web site the same way that they would pay for an advertisement in a publication. There is a charge for listing but no fees after that. There’s no sales commission involved; a dealer doesn’t pay any additional fee if the listed product sells.
Listing fees are based upon a sliding scale —one to 15 bikes costs $50 per week, for example. The minimum listing time is 30 days, since the dealer has to give 30 days cancellation notice.
In early August, there were 2,700 powersports dealers on CycleTrader and approximately 500 ATV dealers on ATVTraderOnline.com. Nichols said the Trader sites have nearly a 95% retention rate.
e*Bay revs up motorcycle market
Since e*Bay launched its motorcycle business in April 2000, it’s been growing at the rate of 180% annually, and last year nearly 50,000 motorcycles were sold on e*Bay Motors, its special motorcycle Web site.
Joe Piazza, Jr., long-time motorcycle industry figure who has held high level marketing and administrative executive positions at Global Motorsports and Ducati Motorcycle, has been retained by e*Bay to build up its motorcycle market.
“Within e*Motors, it’s been recognized that there is a tremendous growth opportunity here,” Piazza said during a recent interview with Powersports Business. “We’re really looking at the motorcycle industry. Where are the growth opportunities? What are the priorities? We’re looking at youth bikes. We’re looking at new non-currents and accessories.
“We see an incredible amount of inventory at all levels,” Piazza continued, “at the manufacturing level for OEMs, and parts and accessories at the wholesale distribution level and at the dealer level. All levels of the sales channel are very full now. There’s an opportunity to focus on product that’s out there that wouldn’t normally be out there.”
E*Bay Motors, the vehicle section of E*Bay, counts 9 million unique visitors each month. By comparison, one leading appraisal guide site draws about half that number each month.
E*Bay claims about 40% of the market, based upon the number of minutes spent on all competing motor-related Web sites.
In addition to claiming “unmatched reach,” e*Bay executives point out that individuals who visit e*Bay Motors are spending a “significant portion” of their time on the site because they find what they want.
“We offer reach plus ‘stickiness,’” said one executive. Visitors spend about 45 minutes on the site, compared to about 10 minutes for other sites such as GM and Ford, maintains e*Bay.
“E*Bay is about crating a marketplace that works for buyers and sellers,” said Andrew “Drew” Lieberman, senior director of parts and accessories and other vehicles. “Buyers can find things they want more easily and sellers can sell easily. We create the marketplace and we want it to function as smoothly as possible. We provide the tools. At the end of the day, people can do whatever they want to do.”
E*Bay differs from CycleTrader in that selling actually takes place on the site. Buyers don’t pay anything to e*Bay, but sellers pay a fee to put up a listing. A sliding fee is based upon the dollar amount for parts and accessories (5.25% to 1.5%) and a flat listing fee of $25 is charged for machines, plus a $25 transaction fee once the machine sells.
“Here’s the bottom line” says Piazza. “It costs a dealer 50 bucks to sell a bike.”
At any one time, there are about 5,000 motorcycles listed and 700 ATVs. There are a couple of hundred scooters and 300 to 500 PWC. During the winter, there might be several hundred snowmobiles.
Products move on e*B ay, according to company figures. A motorcycle sells every 5.5 minutes and there’s “incredible” demand for motorcycle parts. “The supply is not growing as fast as the demand,” says one e*Bay executive.
“We hope e*Bay would be used by everyone,” says Piazza. “Dealers would use e*Bay to get rid of overstocks — discontinued items, returns, scratch and dent.”
Distributors could use e*Bay, as well. Anything where the product is still good but needs to go through another channel. “There’s no channel conflict if products have been offered to dealers,” argues Piazza, “and auditors want (distributors) to write them off the books.”
Both e*Bay and CycleTrader use other sites to drive traffic to their site. Both use PowerSports Network (PSN), a service that helps dealers economically develop their Internet presence.
PSN doubles dealer customers
PowerSports Network has doubled its dealer customer based this year, climbing to nearly 500 dealers, according to Steve Weiner, vice president, and has negotiated a working relationship with e*Bay.
PSN develops and hosts Web sites for powersports dealers.
Under the new arrangement, PSN pushes dealer product listings from its portal site, www.psportsnet.com, to e*Bay so that buyers can make purchases using e*Bay’s proprietary software. Dealers have to have an e*Bay account to sell on e*Bay.
“We’re not an auction site,” notes Weiner. “We’re a facilitator. Literally, they (participating dealer) can take any bike or accessory that they have loaded on their site and push it through (PSN) to e*Bay.”
PSN also has made it easy to load OEM promotions to dealer sites this year, and it is working with major distributors to make their catalogs available online for dealers.
Tucker Rocky’s three main catalogs (Biker’s Choice isn’t included) are available this year, and Weiner says the PSN is negotiating with Global Motorsports to include Custom Chrome and Motorcycle Stuff catalogs, as well.
For more details on PSN, visit its Web site or call 800/556-0314.
ARI helps load Catalogs
Speaking of loading catalogs onto the Internet, one of the leading companies providing this service is ARI, based in Milwaukee, Wis.
ARI’s products and services help equipment manufacturers to automate their business communications with their distributors, dealers and service offices.
The company supplies software and services including digital catalogs, transaction services and Web site services.
Most recently, ARI signed a contract with Arctic Cat to help the Thief River Falls, Minn., OEM improve its Cat Tracker Dealer Network to distribute parts updates and parts catalogs.
ARI also provides similar catalog products and services to powersports companies such as Harley-Davidson, Kawasaki, Polaris and Yamaha.
For details, visit www.arinet.com.