August 8, 2011 – Zero moves to dealer distribution

Three years after developing its first electric motorcycle, Zero Motorcycles is moving to a dealer distribution network and away from direct online sales.
The move was celebrated as a positive step forward for the company, which had always planned to start a dealer network while it waited for the right time to do so.
“When you’re looking at sales and service and aftersales and all the aspects of what a real motorcycle customer needs, you have to look at a dealer, a local dealer,” said John Lloyd, vice president of global sales.
The company started in 2006, developing battery technology and motorcycles using that technology.
“We’ve always had a vision of creating really cost-efficient and energy efficient motor vehicles, and motorcycles are a good application for it,” Lloyd said.
In 2008, the first production-line off-road bike, the Zero X, was developed. The S and DS street bikes and the MX off-road model followed in 2009-10. Just this year, Zero introduced the XU-Urban Cross commuter, it’s fifth bike in the lineup.
Along with its latest bike, Zero is also launching its dealer network. In the past, Zeros have been sold primarily online and shipped directly from Zero’s Scotts Valley, Calif., headquarters to customers, or through a handful of independent reps. But 8-10 months ago, the company began seeking dealers to build a network as Zero had been experiencing more sales, and customers were increasingly asking about local sales and test rides.
“I think that’s a very strategic way to scale this company and get to the volume that this company wants to get to,” Lloyd explained.
Zero’s goal has been to move to a dealer channel, however the company didn’t feel it had the support in place to sustain a quality program in the past. Now it has a solid lineup of motorcycles, wholesale financing, aftersales support, online parts and service manuals, parts ordering, parts availability and promotional programs to support dealers. Zero also has onsite and online training available for participating dealers’ technicians.
“We just wanted to make sure the timing is right, and the timing is right now,” Lloyd said.
Production has already ramped up and is ready for dealer stock. And dealer interest is high. When Zero announced its new dealer program in mid-July, it also announced eight dealers had signed on to carry the entire product line, including Malcolm Smith Motorsports of Riverside, Calif., Hitching Post with three locations in the Minneapolis area, C&C Sports in Brighton, Mich., and five more.
“There are others that weren’t on that list that we’ve already acquired, and we’re continuing to expand that network,” Lloyd said.
Zero is looking to have more than 50 dealers in the United States and Canada by the end of this year. Each dealer will be required to have a minimum POP package, a fast-moving parts package, test ride capabilities and other minimal requirements. However, the number of motorcycles stocked will vary.
“We’re signing on key dealers in key markets, so when we look at minimal allocations and minimal commitments, we really look at the specific geography, we look at the market, we look at the consumer base that they currently have and the consumers that they want to get, and then we come up with an allocation,” Lloyd explained.
Once the allocation is decided upon, a marketing plan is created. Zero works with dealers to market in their local regions to let area customers know about Zeor’s availability. Dealers who have already signed on have received their units, and new dealers will receive theirs shortly after committing.
“Any dealer that signs on now, [the motorcycles are] there within a week, and they get their full allocation, and they’re ready to go,” Lloyd said.
Many dealers who have already joined the network say they’ve done so in order to understand the emerging electric market and to learn how to service the bikes. Lloyd says this is important given the growing popularity of the units and the likelihood of more electric vehicle companies establishing themselves soon.
“The dealers that are engaging with us right now see the value of engaging and really help build the industry and build the expertise,” he said.
Another benefit to dealers is they may attract new customers while carrying the Zero brand. Zero’s demographic is usually urban and suburban commuters, as well as those who are looking for a way to move around short acreage. Its riders have been known to include many new and returning motorcyclists, as well as those looking for a motorcycle that is easier to use.
“It’s the person that wants that ability to make those short to medium rides and wants to be able to do that in an efficient way, and they want to drop their cost of transportation,” Lloyd said.
Zero has created patented and proprietary drivetrain technology, which makes the bikes efficient and light. The motorcycles are easy to operate, don’t use any fuel and plug into a 110- or 220-volt socket.
“They’re quiet, and a lot of our customers enjoy that they can ride in the area that they ride, and they can take in more of the area and the environment,” Lloyd explained.
In the near future, all of those customers will be able to purchase Zeros at dealerships. As new franchises are added, Zero will phase out its online ordering, just as it phased out the independent rep program.
“Online sales will only be supported in those states where Zero is not currently licensed as a distributor and currently does not have a dealer network. As we progress with our state-by-state licensing procurement and appoint new dealers throughout North America, we will phase out the online aspect of our sales plan,” Lloyd said. “We value what our dealers bring to their APR — sales, trust, product knowledge, service and the local customer relationships that are needed to bind the Zero brand with their communities. We are focusing our sales efforts towards helping dealers become informed, productive and successful.”