PowersportsBusiness.com
You will automatically be redirected in 15 seconds. Click here to proceed.

Social Media

Sept. 1, 2008 – A growing business

September 1, 2008
Filed under Features

By Neil Pascale
Editor
EAST WINDSOR, Conn. — Barry Eisenberg, general manager of Greater Boston Motorsports, treats the Eastern PowerSports auction much like a trader does the New York Stock Exchange.
Eisenberg speaks of charting prices, adjusting to seasonal swings and absorbing the invariable learning curves when discussing the wholesale powersports arena. The general manager of the Arlington, Mass., multi-brand store was one of dozens of dealers at a recent Eastern PowerSports auction who were trying to capitalize on a growing market: the preowned sector.
Unlike new units, the sale of preowned bikes continues to rise in the United States. Sales of used motorcycles have risen each of the past two years, according to registration data provided by RL Polk. Of course, those numbers extend well beyond dealership transactions. Officials familiar with the preowned market say as many as 1.5 million bikes are changing hands privately each year, meaning the opportunity for growing this part of the business seems likely even amidst a troubled economy.
“We think there’s a nice amount of growth,” Justyn Amstutz, executive vice president of sales and marketing of National Powersport Auctions, said of the preowned market.
Certainly dealers seem to be capitalizing on the wholesale market more than in years past. National Powersport Auctions, Manheim Auctions and Eastern, three powersports auction companies, all report a higher number of dealer consignments this year than in years past.
Jim Knight of Eastern PowerSports Auction says the company’s consignments — vehicles brought in by dealers to sell at auction to other dealers — are up, as are the total number of vehicles auctioned off.
The same can be said for Manheim, which has eight locations that conduct monthly auctions. Sixty-one percent of Manheim’s powersports sales this year came from dealer consignments, says Karen Braddy, general manager of specialty sales for Manheim.
“We value our relationship with the dealers and feel strongly that a healthy market mix at the auctions includes at least 50 percent of the units being sold by dealers and the balance of units being sold by the commercial accounts (banks, fleet companies, manufacturers, etc.),” Braddy said.
Dealer consignments also are up notably at National Powersport Auctions, which has facilities in San Diego, Cincinnati, Dallas and Atlanta. “Consignments are an initiative that we really started to get deep into 31?2 years ago and we’ve seen substantial growth, consistent double-digit growth every month, every year for the last 31?2 years,” Amstutz said.

Wholesale strategies
What has led to the increased number of consignments is more overall dealer interest, and hence participation, in the wholesale market.
“The more guys attend an auction, the more comfortable they become with the process,” Amstutz said.
That certainly has been the case with Eisenberg, the general manager from Greater Boston Motorsports. Like many dealers, he combs through data provided by Eastern to help him effectively price trade-ins, which could be retailed or sold at the auction.
“I take their results and I actually graph them,” Eisenberg said of Eastern’s data, which is mailed to dealers after each auction. “So I know based on history what months sport bikes are high and what months ATVs are high.”
In late July Eisenberg knew his area wholesale market was shifting from sport bike to cruisers in terms of historically valued vehicles. So although cruisers were a bigger priority that day for Eisenberg, he wasn’t necessarily going to pass up on a sport bike knowing such units would probably be going for a more reasonable price than in recent months.
That line of thinking is extended to the trade-in at the dealership. Eisenberg may give a little more for a certain unit if he knows he can make it up on the retail side or if the time of the year would dictate it would get a higher return value on the auction floor.
Other auction sellers see the wholesale environment as a perfect way to dispose of vehicles that don’t match their retail criteria. That’s the case for Dave Moore, owner of Lancaster Honda. His Lancaster, Pa., dealership sells only premium preowned bikes, meaning any vehicle not matching that description is routed to an auction.
“You can also eliminate inventory that isn’t your cup of tea,” Moore said, noting that might extend to certain brands or vehicle segments. “We may turn the money and get that trade-in (to the auction) as fast as we can.”

Comments

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!