Marin BMW Motorcycles – San Rafael, CA – July 28, 2003

CONTACT
30 Castro Avenue
San Rafael, CA 94901
415/454-2041
www.marinbmw.com

OWNER
Cary Littell

BUSINESS PROFILE
Founded in 1972 as a BMW distributor under Butler & Smith; has been through several owners, and Littell took over in May 2001, when the 10,000-sq.-ft. dealership carried Ducati, Triumph, and BMW. Now exclusively BMW.
“I see an economy of scale, both physical — we’re able to carry a wider variety of BMW parts — and mental, with employees’ knowledge of and expertise in service, parts, and various models.” Unit sales have gone from 54 in 2000 to 101 last year. “We’ve regained all revenue lost by not having Ducati and Triumph,” says Littell. “With three brands, annual sales were $3.4
million; we’re at $3.5 million and are on track for $4 million this year.” Eleven full-time employees.

GREATEST CONCERN
Littell’s greatest concern is product liability. “Major aftermarket companies don’t often produce items for BMW’s relatively small market. Of course we order from Parts Unlimited and Tucker Rocky, but we also buy from 30 or 40 small vendors — just one item from each. It may be handmade, in batches of 100. Those are the types of items our customers really like, so I seek them out. That’s partly how I got started — I designed a GPS mounting device for BMWs, had it manufactured, and sold it via the Internet.”

Another crisis, says Littell: worker’s comp insurance. “In California either we can’t get policies, or it’s outrageously expensive. We’re paying $3,500 per month for 10 employees, which seriously affects our bottom line. It’s really a Catch-22: If you don’t have worker’s comp, you go to jail; if you do, you go out of business.”

WHAT’S HOT?
Making a mark at Marin: the R 1150 RT tourer and the R 1150 GS dual-sport. “We sell a fair amount of BMW apparel,” says Littell. “The new Rally II jacket is very popular. We haven’t focused much on other apparel brands, but we do carry some Alpenstar as a lower-cost option for our clients. In helmets, it’s pretty equally split between Shoei and Arai.”
Marin BMW also carries “lots of goodies, knickknacks, and doodads. BMW riders are very gadget-oriented. Our customers tend to focus on comfort and functionality.”

CUSTOMER BUYING TRENDS
Marin BMW’s typical customer is 48 to 60 years old, with an annual income greater than $100,000. “A fairly high percentage of bikes are bought with cash,” says Littell. “When our customers apply for credit, we have a 98% approval rate. This is a very sophisticated consumer. By the time he has made a decision to buy a BMW, he has done research and may have decided on a model. We have a demo of nearly every bike so he can compare several models back-to-back.”

ANTI-POWERSPORTS ISSUES
Littell says Marin “is a fairly hoity-toity area, but motorcycling in California is really popular. In the Bay Area, in particular, we have a strong base of people who use bikes for leisure and commuting. We see a fair number of CEO/executive types from downtown whose difficult choice that day is whether to drive the Porsche or the Ferrari, or ride the BMW. The California Highway Patrol rides BMWs, and we service their bikes. There is a group of ‘hooligan riders’ or ‘outlaw bikers,’ but the CHP has responded appropriately to bring that under control.”

PARTS AND SERVICE
Marin BMW has a service manager, a service writer, and three full-time technicians; a parts manager plus one full-time and one part-time parts salesperson; a sales/finance manager (California requires a special license to sell insurance) and a full-time motorcycle salesperson.

“I’m very hands-on and float in all three departments as needed,” says Littell. “It’s important to me to learn every aspect of the business.”

Marin stocks an inventory of 13,000 BMW parts and aftermarket accessories for bikes back to the 1970s. “We’ve remodeled the shop
extensively to make better use of the space. We put in a Rousseau drawer bin system, which is often used by technology companies. All our parts are organized by size, rather than part number. We’re able to carry more parts in less space.”

Marin recently stopped servicing bikes older than 1980, unless the bike has been serviced there for a long time. Adds Littell: “At our shop rate, the customer may have to put $2,000 to $3,000 into a bike that isn’t worth it. They’re better off parting it out, fixing it themselves, or
finding an independent mechanic, which we’ll refer them to.”

PROMOTIONAL HOME RUNS
“We work hard to know each customer’s needs and wants, “Says little. “By doing that, we’re building a community of riders. People come by the shop and just hang out. We sponsor a shop ride every month, offer complimentary sodas and coffee every day, and on Saturdays have doughnuts and pastries.”

WORDS OF ADVICE
“Always take responsibility for anything that happens at your shop, no matter what it costs,” advises Littell. “A customer was riding one of our service loaner bikes, and a previous customer or a technician didn’t fasten the oil cap down. It blew off and put oil all over his Aerostich riding suit, so I paid to have professionally cleaned. That’s just the right thing to do.”