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Motorcycle Dealers: Multiple Check Turns Inventory Over

Posted by Brandon Weaver | Mon, Aug 04, 2014 @ 11:00 AM

Motorcycle_Dealer_Mega_Mall

Running a motorcycle or power sports dealership is no easy task as you have to be aware of industry trends, manage employees, and understand an all-important accounting concept, FIFO (First In, First Out).

For you to work this concept best, the bikes that get delivered first should be sold first. By its very nature doing this measures how many times your total inventory is sold in a given time period, which can be an excellent metric to track as the economy recovers. This approach keeps new in-demand bikes moving out the door so you have the opportunity to replenish them.

For most people, motorcycles are big ticket items, so the purchasing process is time-intensive and thorough because consumers want to get the best bang for their buck. Your consumers determine their purchase motivation, compare brand types, perform price comparisons, and narrow their selection after a test ride. The good news for you is that, despite national gas prices averaging $3.59 per gallon, sales are trending upward:

US Motorcycle Sales by Year 1992 2013

More importantly from a FIFO point of view, increasing sales push the inventory turnover ratio upward as well:Motorcycle and ATV Dealers Inventory Turnover Trends

 
Of course, the goal for the industry is to reach the 2005 level again, but let’s pump the brakes… one step at a time.

Remember 2005? Those were the days, weren’t they… With a 2013 year-over increase for your inventory turn-over of nearly three-quarters, we might be heading back to the good old days.

Harley Davidson may understand higher sales and inventory turnover better than any other brand. For Q1 the company’s shipments were up 7.3 percent and U.S. sales increased by 3 percent over the same period in 2013. With such an increase, it’s safe to say Harley dealers enjoy a high inventory turnover.

Perhaps helping spur this increase is their interest in female riders as their traditional male baby boomer market segment ages. Women may prefer heavyweight bikes, and Harley Davidson in particular, because they offer beginner riding instruction, and garage parties, and are most familiar with the brand. This makes logical sense as many women have ridden passenger on larger bikes with their male counterparts. But instead of the traditional chrome frame two-wheelers, women are the target market for two chrome-less black models. As a result, Harley claims to have 62 percent of the heavyweight motorcycle market. Taking this one step further is Ducati because they believe every single bike should be easy to handle and ride for women. For example, the Monster 1200cc is an attractive option for women because they can change the seat height and ergonomics to fit their body type.

It makes no difference if you’re selling off-road, street bikes, or Harley’s. Some riders may want the greatest horsepower, these 2014 must-have rides, or the buzz of electric bikes. Either way, your showroom space is limited so you have to carefully determine what models to carry in stock. In order to feature the latest bikes and have adequate selection, a high inventory turnover is necessary.

Schedules: Good for Bike Maintenance and Payment Services

It’s no secret that motorcycles need scheduled, routine maintenance to run at peak performance. Multiple Check also operates on a schedule and keeps your sales at optimal levels.

With this payment service, customers write 2-4 checks, agree on a payment schedule with you, and take their bike home the same day. Many automotive and motorcycle dealers know this as “hold check”, but whatever you prefer to call it, you get the best of both worlds.

Customers are happier because they get to hit the road and show off their shiny new bike to friends and family sooner, while you enjoy increased sales and open space for new inventory. This check payment service offers flexibility for customers and guaranteed payments for you – all the while increasing your shipment frequency and turnover ratio.

Dying to get some older models out the door and showcase electric bikes or appeal more to women? Gas prices constantly fluctuate but that doesn’t mean your sales have to. Start increasing your shipment frequency, and keep inventory turning over - speeding off your lot on two wheels.

Topics: Auto Dealerships

Written by Brandon Weaver