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FOCUS – NMDA Offers Dealers Group Purchasing

March 16, 2005
Filed under Features

Visitors to the Dealer Expo this year will find a new “association” to join, especially if they want to save money on F&I products. The organization is the National Motorcycle Dealers Association (NMDA) located in Booth #5830.
The name might be confusing to some dealers, because NMDA really doesn’t provide all the services that a trade association normally performs. NMDA, for example, doesn’t collect data or perform original research that can benefit its members and it doesn’t have a strong lobbying function at either the state or federal levels.
In essence, the NMDA initially seems to function more like a buying group than a trade association. During an interview with Powersports Business, NMDA CEO Gaylen Brotherson discussed the background and mission of the Scottsdale, Ariz.,-based organization.
“Our mission,” says Brotherson, “is to assist dealer members to become profitable and successful through special services and products. Anything that touches the motorcycle dealers are programs that we are trying to put together.”
NMDA literature is heavy on F&I products, ranging from motorcycle rental insurance and motorcycle financing to garage liability and open lot insurance coverage. NMDA also offers group health and life insurance, payroll and credit card processing and pre-paid legal services.
“We don’t consider it a buying group,” says Brotherson, “although it has elements of that.” NMDA now offers approximately 30 products and services, he says.
Brotherson says NMDA is simply giving dealers what they say they want. “It has taken on the look (of a buying group) because dealers say that’s what they want. We’re hearing from them that the biggest problem is the cost of insurance and we’re trying to answer that need.”
NMDA also is trying to develop a voice for dealers at state and national levels,” says Brotherson, by working with the American Motorcyclist Association (AMA) and other similar groups.
One reason why the NMDA is heavy into insurance products may be because that’s Brotherson’s background. He’s been an insurance agent since 1960 and he’s been in the warranty business since 1974 when he owned a Harley-Davidson dealership in Iowa.
He also sold Honda, Kawasaki and BMW, as well as snowmobiles, wood stoves and chainsaws. With interest rates on floor planning running at more than 20% and Harley-Davidson getting a low priority from then owner AMF Corp., it wasn’t much fun being a dealer at that time, says Brotherson.
In those tough days, he was always looking for additional revenue, even though he sold about 3,500 motorcycles annually, he says. “In Iowa you have to survive in the wintertime,” he says. “It made me want a simpler life.” In looking for additional revenue streams, insurance agent Brotherson went into the auto warranty business and eventually sold his own motorcycle warranties. “It was a natural segue into the warranty business when I sold off my motorcycle business,” he says.
He formed MBA, a third party administrator of insurance and non-insurance products, in Scottsdale in 1984. The company’s stock is traded over the counter and MBA is expected to generate revenues of $12-$15 million this year, he says. NMDA is owned primarily by MBA, which funded its implementation, according to Brotherson.
NMDA exhibited at the recent V-Twin Expo at Cincinnati, a move that gave the group an opportunity to talk with dealers and sign them up. Brotherson and others will be doing the same thing at Indy.
Annual dealer dues in NMDA are only $50. Details can be found by visiting its Web site at nmda.us.
Brotherson says more than 500 dealers had signed up prior to the V-Twin Expo. Affiliate memberships also are available to companies that work with the motorcycle industry. Clothing manufacturers and insurance companies are examples. Affiliate membership enables these companies to promote their products and services to dealers, notes Brotherson.
Dues for affiliate memberships are set on a sliding scale, ranging from $600 to $10,000, he says. NMDA has between 200 and 300 members, according to Brotherson.
NMDA also is moving beyond F&I products — it recently added a motorcycle rental program and a motorcycle leasing program. “Leasing a motorcycle is just like leasing a car: you can get a lower monthly payment than if you purchase.” For example, a 2005 Harley Sportster would lease for $99/mo with nothing down for five years or $149/mo for two years. Annual mileage limits are about 10,000 miles.

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