What does it take to run a motorcycle dealership?

How to run a bike dealership_thumb

 

“I’ve spent the last 30 years trying to get people to walk through the door but the last 11 months trying to stop them!”

Motorcycle dealerships are like fun farms for helmet-wearing adults, crammed full of beautiful shiny new motorbikes that we ooh and aargh over as the prowling salesforce scope us out like the lion stalking the zebra. They’re weighing up if this a real prospect or just a tyre kicker. Is there money to be made or time to be passed?

We’re all too familiar with these showrooms and their magnet-like qualities as a place to meet, to socialise or to just coo over the stock – be they new or used. Those dressed in open neck shirts with commission on their mind are the best kind of shop floor staff because they like what you like. They ride. They know things that you’d like to know. They can be your friend and it’s all very relaxing.

But these social hangouts and occasional motorcycle shops have been disturbed just like everybody over the last 12 months – currently only open for essential repairs and servicing, the forecourts are barren, showrooms are closed with no demo rides available, limited accessory and product stock, and certainly no zebras. The lions remain, but only behind Perspex and with masks to protect them. For now, they only talk to their prey customers via email, phone or Zoom. But is running a dealership all it’s cracked up to be? We spent some time at BMW Motorrad Wollaston (Northampton) with Richard Higgs, General Manager.

 

How are motorcycle dealerships operating during lockdown?
Off to BMW Motorrad Wollaston in Northampton we trek to find out how a dealership works and how they’ve had to transform their business over the last 12 months

 

Up to 800 bikes sold per year

Richard’s been with BMW for 40 years and selling bikes at Wollaston for 30. And he’s a keen explorer too – most of his 9,000 miles per year are on an GS Adventure machine with Mrs Higgs on board.

Up until last March there’d have been 25-30 bikes in the showroom with one new bike sold for every two used ones, rounding up to an impressive 700-800 per year – two per day, every day. At Wollaston’s the bike, or ‘Motorrad’ as they prefer to call it (the German translation of motorcycle) side of the business is strapped to the car side though Richard describes his part as “the fun side of the business!”, a sentiment shared with his 17-strong team of staff, all of whom ride. It’s almost a pre-requisite for their roles and that’s important for Richard, to allow the sales team, especially, to know what a customer needs as opposed to what they want. The business’s main focus is on customers, but a close second are those staff. He says, “We never want to sell something to a customer that’s not right for them”. We slow the process down. A customer can come in and get excited about a bike and for us it’s important to work out what they actually need.”

And to a degree, it’s the staff who’ve suffered too during the numerous lockdowns and lock-ups; the team has been split in half, with one portion working from home who then regularly swap with those working from the dealership, although “everything is done online, we’re doing things the modern way,” says Richard.

He went on to explain the reaction to the original lockdown, “Since lockdown in March 2020, it made us sit up and think we’ve still got a business to run. Initially, we got advice from BMW UK but we were quick off the mark to appreciate there are still people sitting at home on their iPads wanting to buy bikes. It’s important to get the face-to-face interaction with Zoom, as opposed to just email or phone but we’re desperate to get people back into showrooms – that’s our bread & butter. We can’t wait. I think we’ll be stronger and fitter as a business. We had a great three months after the initial lockdown but I don’t think we’ll ever go back to how we were originally.”

 

 

Top 5 dealer

With the showroom being closed to the public of course that means demo rides just aren’t available, though Richard’s route around that is for the customer to effectively click and collect – they put a deposit down, take it away and ride it and if they like it then they pay the balance. It’s a process that lacks the personal touch but it’s a necessary evil for the business to survive.

Wollaston has been on this site since 2000 but has been selling cars and bikes since the mid-60s having started life in a local town with the same name. The business has grown in stature to be currently operating in the top 4 or 5 of the 45 BMW Motorrad dealers in terms of new sales. “Used, we are probably top 3. There’s probably 3 or 4 dealers of similar size spread out around the UK that do similar numbers,” says Richard.

Then there’s the social side of the business with the Riders Café - usually a big draw, an attraction with the accompanying parking and space to chat that local clubs often use as the start or end of their ride-outs. The dealership would normally have a packed schedule of events and rides of their own with breakfast runs, World of BMW tours (to the annual BMW event in Garmisch, for example) or BSB trips, yet here we stand on a Friday lunchtime

in a derelict eatery that would normally be buzzing with likeminded souls telling stories of first bikes, last bikes, crashed bikes and ones that they wished they’d not sold. Maybe one day life like that will return.

Yet Richard reminisces about how the brand has progressed over the last quarter of a century, “I’d never have dreamt that 25 years ago we’d have the range we’ve got today, it attracts a broad range of customers and we’ve got a bike for everybody from an electric scooter right up to a K1600 GT LE. The new M1000RR is a halo bike for the franchise, that’s going to bring us more interest especially when it gets to us in April/May - we’ve already got a couple of orders from existing customers – both long term customers who are into their sports bikes. One bought the first S1000RR in 2010.”

 

 

Most popular model

I ask the obvious question and receive the obvious answer about which model is the most popular yet Richard answers with a degree of unnecessary justification, “the 1250GS range is the most popular. A lot of people think it’s ugly, actually when you jump on it, it’s a fantastic all-round bike; the best bike on the road. It makes an average rider look fantastic, so great for me. It’s one of those bikes, it does a bit of everything.”

And what happens when ordering new stock or looking ahead to this buying season with 2021 models in mind? “There’s so many options to order in terms of colours and spec. We sit down around the table with a cup of coffee and we look at the customer demand for a certain model, we revisit that every month so if a certain model is not selling quite as well we can turn the tap off on that. And if there’s increase demand on an RR, we can increase demand on that. We can also swap stock between dealers as well, it’s a small network - 45 Motorrad dealers in the UK, and we’ve got good relationships with a lot of those so if we want something in a certain spec there’s likely to be a dealer with that and what goes around comes around, so they’ll probably need one of us at some point.”

 

Hicky, Charley and Ewan

But does the media influence sales? We know that ‘race on Sunday, sell on Monday’ was a real thing in the 80s and 90s but is TV coverage of motorcycle sport still effective? Yes. Resoundingly. Mr Hickman risking his balls at the Isle of Man TT is good for business apparently after he had a very positive influence on RR sales. And we all know about Charley and Ewan’s GS stimulus… Richard naturally picks out a happy customer riding away as a highlight yet he also points out “while we sell up to 800 bikes a year, for each customer that’s probably one purchase in three or four years so we have to make sure that’s a special thing for them when they come and collect and to see them ride away on a brand new bike is fantastic but what’s even better is to see them coming back in a couple of years to buy another one! Then we know we’ve done our job right. We’ve met some fantastic customers and the one thing about motorcycling is that it attracts lots of individuals from different worlds but they’ve all got that one common interest.”

 

Used sales

When it comes to getting the best deal on a pre-owned motorcycle, customers are likely to arrive equipped with their arsenal of negotiating techniques at the ready, though, according to Richard, “There’s a general idea that we work on huge margins and there’s loads of money to give away but unfortunately we don’t. I think they come in negotiating trying to get a £1000 discount and in reality, that isn’t going to happen. Margins are tight, we have to warrant everything for two years and we have experienced salesmen who want to look after the customer but if we gave everything away there’d be no business for customers to come back to. There’s a manufacturer’s warranty on all the new stuff and a manufacturer-backed used bike warranty that’s second-to-none. So, when you pick up a used bike, it’s as good as a new bike as you’re going to get, for used money. They’re all up to quite a strict standard in terms of preparation and service history.

And I’ve seen plenty of social media commentary feeling hard done by because the bike they part exchanged or sold back to the dealer has been spotted on the forecourt with a £500 - £1500 increase on what the customer was paid. But how is a bike valued by the dealer? Richard’s explanation makes sense, “There’s lots of guides out there to guide you in a direction of what you think that’s worth, but ultimately it’s worth what someone’s willing to pay for it. The market will dictate what you can sell it for. There’s some models that aren’t as popular but for us it’s about experience of what we can sell stuff for, we look at competitors, the current market place. We’re re-evaluating our used stock weekly and price-adjusting it to the market which is why we’re so successful in selling so many used bikes. The market will drive that, so for us there’s no one simple matrix that says that bike is worth that amount of money. It can vary during the year depending on seasonality and what is hot-to-trot at the moment, it’s a moving picture and it changes. So if there’s a very short supply of used bikes then the prices will be higher and if there’s a flood of a particular model then the price will be lower.”

 

 

Top Servicing

Further behind-the-scenes in the non-public area we take a walk around the rear of the dealership to where the six ramps each featuring a customer bike are in use because this area is allowed to be open for essential repairs, PDIs, MoTs and repairs. Richard names this “the most important part of the business” and “the best sales exec” because the constant flow of work absolutely has to be of such high standard which in turn promotes the dealership. One slip-up and with today’s level of social media commentary that could be disastrous for the dealership. That said, Richard still believes in the old adage of “any feedback’s great feedback. If we’ve got bad feedback then I want to know why and we can put it right. It’s inevitable something might go wrong with the amount of people you deal with on a daily basis. But there’s even a customer group who’ve set up the Wollaston Rider’s Group.”

 

The future and the challenges

Looking further ahead than the reopening of dealerships and providing everyone behaves and there are no further lockdowns then how does Wollaston develop?

“It’s looking bright when you look at the model range that we’ve got and then the technology that we’ve got moving forward with the electric stuff, we’ll start to see that coming online over the next 18 months/2 years,” begins Richard.

“I think we’re ideally placed, there’s huge investment at the factory in technology, they’ve always been a brand that pushes the boundaries of technology and that’s clearly the way forward for me. There’s more and more people getting into bikes and particularly more recently, with lockdown, there’s no better socially distance way of having fun!”

Yet reopening isn’t the biggest concern for this General Manager. “Getting and keeping great staff is a challenge which is why we do try and look after staff. If you’ve not got the right people then you’re not going to keep the customers happy. Used bike supply can be a bit of a challenge, we’ve seen quite recently a lot of our bikes going abroad with exchange rates. I think that’s not great for our industry in the UK. One of the other biggest challenges is getting younger people into motorcycling. If we can crack that, we need to make it cool for the younger kids and make it affordable to attract them into it. There’s only so long we can continue selling to the same people.”

 

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