The question is: are we going to take it anymore?
Having been in the industry for 40 years, and a dealer principal for the last 21, I’m pretty much fed up with how we’ve been treated by the major motorcycle manufacturers. Unless you’re in a state where there are dealership franchise protection laws, we’ve been at the mercy of these distributors for a very long time.
It seems that every few years, one or another motorcycle manufacturer gets some sort of ego driven idea that, in their mind, the particular brand they sell entitles them to push the dealer network around. Personally, I think it’s because of too many four hour lunches with either too much Guinness, Sake, Limoncello, or Schnapps involved.
To be fair, every single OEM goes through this process at one time or another. Lately, it seems to have been Triumph who has decided to abuse its dealer network to such a degree that it has lost dozens of dealers over the last two years or so.
We are talking about a network where the average dealer sells between 60 and 80 units a year, yet Triumph America requires a new dealer to spend up to $250,000 in showroom upgrades, equipment and accessories. Assuming that you sell 75 a year, and you make an average of $1,000 a unit, it will take you over three years to maybe break even. And we all know that a new dealer won’t sell 75 the first or second year. Of course, by the time they can get their volume up, it may be too late. And there’s also pressure for existing dealers to “upgrade” their premises at great cost. And Triumph often intimates that failure to do so may mean loss of the brand, or an additional dealership placed very close by.
Right now, Indian requires a new dealer to spend a vast amount of money on a new showroom, and to order a large amount of units to start. There doesn’t seem to be a lot of takers, and I fear for those who have signed on the dotted line. Of course, many of these are new dealers, and they do have the choice. They also may not really know what they are getting into.
Honda and Yamaha have also been guilty of this; pressuring a dealer to order more units than they can easily sell, or they will punish them. I recently heard of Honda putting in a new dealer within a four-minute drive from an existing dealer. FOUR MINUTES… While I understand that they are in the business of moving their product, by forcing dealers to take too much of this product, or placing too many dealers in a small geographical area they weaken the dealer network, and ultimately, it works against them.
[pullquote]“Wouldn’t it be wonderful if we could all show up at the next dealer meeting wearing pink shirts? Now, that would be something to behold.”[/pullquote]
Now, I realize that it goes both ways; a) we have to sell the product to make a living, and b) the OEMs have to move product to our floors to satisfy shareholders. But too often there’s a disconnect between the two, and an OEM rep. will force one of his dealers to order too many units for their sales area, and dropping the news that the guy down the street has applied to be a dealer.
In another case, it seems that many distributors are creating online stores to sell parts and accessories directly to OUR customers. Some of them design to give the dealer a small slice, but tell me this; would you rather have a small slice of the profit, or the whole thing and have the client come to your store, where perhaps he will make more purchases at the same time? Also, what about bringing in products we can sell? Where are the sensational new ATVs or motorcycles that get people excited about riding again, or upgrading to a new product? Often, we see the same old machines for five, 10, or even 15 years, and if there are any hot new models, they insist that to get three of those, you have to buy five of the tired old machines you cannot give away. How does that generate new business?
[pullquote]Sometimes, when a dealer rep. comes in, I want to put on a pink shirt to protest the bullying that goes on. Wouldn’t it be wonderful if we could all show up at the next dealer meeting wearing pink shirts? Now, that would be something to behold.[/pullquote]
But, really, what can we do? Often I’ve heard that we can’t do anything; the OEMs are in control. But what if we all got together and said, “Here’s our order. Fill it, and don’t ever call me about any other units. If I need something, I’ll call you.” I’d be willing to bet that if enough of us do so, they’d sit up and take notice.
Could we do it? Are we brave enough? I’d like to think so.
