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Old bikes bring new sales to dealerships

Liz Hochstedler, Associate Editor
February 13, 2012
Filed under Features

Success in pre-owned units increases

Selling pre-owned bikes isn’t easy. Dealers have to procure the units, ready them for sale and market them, usually individually, since each is unique. Luckily, for a majority of dealers, the hard work paid off in 2011, and their pre-owned unit sales increased, according to an exclusive Powersports Business survey of more than 325 dealers.

In fact, 55 percent said they saw improvement in pre-owned sales over 2010, a sign that pre-owned sales haven’t lagged and dealers are learning how to successfully cover this market.

“You just have to make it happen,” said Justin Alpiser of Team Powersports, which has two locations in North Carolina. “You have to find the units and make it easy for everyone in the dealership to participate and believe in the pre-owned culture. It doesn’t happen on its own.”

His dealership saw a nearly 20 percent increase in pre-owned sales in 2011, thanks to an effort that included, “investing in purchasing used units, paying employees to purchase clean used units, utilizing Craigslist and our Internet site for both purchasing and selling units.”

Alpiser said the 2011 increase came expectantly, as his dealership added sales staff, invested in advertising, worked with other dealers to increase inventory, worked to properly recondition each unit and dedicated more showroom space to pre-owned. In addition, the dealership hosted stunt shows, cookouts, a bikini bike wash, demo days, a visit from Santa and a handful of other events throughout the year.

Events at the Team Powersports locations in North Carolina helped spur a nearly 20 percent increase in pre-owned sales.

“I would have to say all those event contributed to increased floor traffic, which in turn would have to contribute to an increase in all sales, including pre-owned sales,” Alpiser said.

Bumpus Harley-Davidson, with five locations in Tennessee, also used its more than a half-dozen events to bring new customers into its stores.

“Our events are dominantly customer-focused, with about 25 percent of them designed to gain new market share,” said Tommy Todd, manager/director of  the chain’s marketing, media events and MVP program. “They include poker runs, scenic rides, companywide events and special parties for our loyalty club members.”

Bumpus saw about a 25 percent increase in pre-owned sales in 2011 as it chased the used business more aggressively, even paying more than book value for some trades in order to increase inventory.

Billerica Motorsports & Marine in Billerica, Mass., saw a whopping 60 percent increase in pre-owned sales by actively pursuing trades and buying more customer units.

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“We started attending auctions and put a ‘We buy used’ section on our website,” general manager Kari Sullivan added.

John Leach, owner of Pete’s Cycle, with three locations in Maryland, focused on the Internet, not so much to buy units, but to sell them, and he recommends other pre-owned dealers do the same.

“I think the biggest thing, to be honest, they need to put their inventory on their web page instead of just their new bikes. They need to be putting up their used bikes because that will lead to increases, I believe,” he said.

Leach bought units from his customers and grabbed those he could find in the local newspapers and in magazines. He expects his 2012 pre-owned sales will increase “considerably” because new bike prices continue to rise.

Sullivan agrees.

“New units have increased so significantly [in price] that used units are becoming more attractive,” Sullivan said.

Todd expects the continued availability of pre-owned product and a more targeted marketing approach will lead to another increase in new unit sales at his dealerships. What’s key, he says, is finding a hook on each unit.

Bumpus Harley-Davidson’s five Tennessee locations sought pre-owned inventory to such an extent in 2011 that customers were sometimes paid more than book value for their units.

“Dealers have to buy the unique, low mileage, one-of-a-kind, and if not, they need to invest in the unit they buy or trade for to make it so different that they have something to sell that nobody else has,” he said.

Alpiser will again be investing in pre-owned in 2012, boosting his dealership’s current efforts in the hunt for another successful year.

“We are targeting the pre-owned market even harder than last year,” he said. “We plan to go into peak season with nearly twice the number of bikes we had last year and maintain a higher level of pre-owned inventory through out the year. Also, we will be increasing the sales staff yet again.”

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