Initial buy-in based on units rather than dollars
Vega Helmets finds loyalty comes with margins
For dealers who are starting anew after the recession, or deciding to go it alone after moving on from their previous employer, initial buy-ins from vendors can limit their inventory.
For example, when Ric Maready decided to open Big Boy’z of North Carolina in Wilmington, he began with an inventory of pre-owned bikes and apparel. He also sold both bikes and apparel and accessories on consignment. His business has grown since its April opening, and he recently decided to expand to offer new accessories.
“I wanted to carry new helmets, but the initial investment for a lot of brands is a lot more money than I wanted to take out of my cash flow to try to get some of their product in here,” said Maready, a former sales manager at the now-defunct Britt Motorsports, which was also located in Wilmington. “Finally I found Vega and learned that they don’t do their buy-in by the dollar amount, but by the piece instead. I told them I hadn’t found anybody I could work with, and they told me ‘Well, I think we’re here to help you.’ Now we have shelves of their helmets in here, and they all move really well.”
Maready has since added Olympia gloves to his 1,200 square-foot shop, where he keeps an inventory of 12-15 bikes and continues to consign goods for consumers. Many items that customers bring in for consignment, Maready said, still include the price tag and have never been used.
Turning to Vega has given dealers like Maready a chance for growth, and an opportunity to better serve their customers. Whether the dealership is new to the industry or has deep roots, Vega will do what it can to help it grow.
“We only deal with legitimate motorcycle dealers, but we recognize that size is not the only criteria. We will check you out,” said Jeanne DeMund, vice president of Washington-based Vega Helmet Corp. “We don’t sell to some guy operating out of his garage. But if you’ve got a shop and you’re doing business, then we want to work with you. We have a very reasonable buy-in of six helmets, and it’s always our philosophy that rather than load somebody up before they’re familiar with the line, we’d rather have them be successful with a small buy-in, and then come back for more.”
Success in Orlando
While exhibiting at AIMExpo, dealers were intrigued by Vega’s buy-in number.
“Our buy-in is six helmets, and we feel like once a dealer experiences our product, quality and price, with the margins, they’re definitely going to come back,” DeMund said. “We don’t have to load them up with an initial buy-in to get their loyalty. Dealers at AIMExpo were super excited, and we did pick up new dealers there. For a first-year show, we thought that was very, very promising.”
Vega has been in the marketplace since 1994, when DeMund and her China-based business partner, Lou Xu, set up a 10-by-10-foot booth at DealerExpo in Cincinnati. Now owners of the factory in China where the helmets are made, the partners, back then, eased their way into the industry.
“We asked every every dealer that walked by ‘If you could buy these helmets at this price directly from us, would you be inclined to do it?’ So many people said yes that we started sending out letters, and from that initial batch we got 25-35 yes responses, and started shipping helmets,” said DeMund, who oversees U.S. distribution from the company’s Seattle-area offices while Xu manages the factory in Ningbo, China. A warehouse in Columbus, Ohio, facilitates distribution.
Farmington Cycle Center in Farmington, Mich., was an initial dealer partner. That led to an employee at the dealership telling an independent rep, Rick Sly, about the brand. In 2014, Sly will mark 20 years of repping the brand.
“Going to shows, finding reps and building relationships — all of those things have allowed us to grow,” DeMund said.
Vega has nearly 30 reps (“great territories are available,” she says), and many of them have been with the company since it inception.
“We’ve never been afraid to write the big checks,” DeMund said. “We don’t have any negative incentive on the commission.”
Demund said the company has grown from shipping five containers per month from China to more than 150 containers per month. Vega products are sold in more than 20 countries.
Vega helmets range from $50 to $300 at retail, with Vega serving as the flagship brand. Its recently released Stealth premium brand also has found success in its first year on the market.
“We’re very optimistic about the future,” DeMund said. “I think most of the dealers, when they run their DMS report that shows where their profits are coming from, will find that we are consistently in the lead.”
The convertible Stealth Phantom is an open-faced helmet that easily transforms to close-faced. DeMund noted that Gold Wing passengers have especially taken to it, as have scooter dealers. It’s DOT- and ECE-certified.
The full-face Stealth F117 features a drop-down internal sun visor and weighs in at about 1,450 grams. It’s also DOT- and ECE-certified. DeMund noted that it was a success among consumers at AIMExpo, with its Dupont Coolmax wicking liner fabric of particular appeal.
Vega’s product reach extends beyond helmets, however. The company is the exclusive distributor of the premium Spirit Apparel by RICHA, a Belgian company. The brand’s c_change technology is used by only two brands in the motorcycle industry, Vega and BMW Motorcycles.
And while dealers like Maready appreciate the offer of the initial buy-in of six units, DeMund says few start with that number.
“It does take the initial order hesitancy out of the picture,” she said. “They can order what they feel comfortable with and get started with that. But very get started with six.”