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Old 09-17-2013, 09:32 AM   #31
dapman
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Old 09-17-2013, 11:40 AM   #32
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Wow, lots of interesting discussion!

Griz-sorry we reach for a parts catalog when you're looking for parts...what an idiot I am. Sounds like something in the past put a bad taste in your mouth, give me a chance, we'll do our best to change that.

As for everyone else:

Honestly I can't take much more time to such discussion. Seeing as how I (as well as a few others) am devoting much of my immediate future to the success of The Motorcycle Shop, this limits my free time immensely.

I consider frequenting this site as a form of extended customer service. The more avenues we have our hands in the more we can be in touch with our customer base. I can't tell you how many times I've received business feedback, heard of a broken down traveler, someone interested in a bike, the list goes on.

As far as parts goes we are currently looking for new systems for stocking, ordering, reserving, and sales in general. Parts are a very challenging aspect of the power sports business, that said I think we're improving.

That's all for me, I've got to answer the phone.
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Old 09-17-2013, 11:47 AM   #33
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Quote:
Originally Posted by FlyRescue View Post
Completely unacceptable margins. That right there is why no one buys from the businesses in town. Free shipping on parts at cost trumps a 12-14% on parts for a feel good factor. Especially in these economic times.
Wat.

12-14% is too high? You even mentioned 2% as acceptable in another post? You might be happy making $2 for every hundred dollars sold, but how will you pay your employees, keep the lights on, buy insurance, buy a building, etc. etc?

So you sell $1 million worth of inventory. That's pretty awesome. Most people would be stoked about that. Congratulations, you made $20,000. Enough to pay one unskilled college student part time, you can't afford a dime worth of equipment, and you made nothing. Sell $10 million? $200,000. Now you have a manager and 3 or 4 part/full time employees, no profit, no draw for you, still no building, and no anything else. And how are those 3 or 4 employees going to sell $10 Million worth of inventory by themselves with none of that stuff?

Even if you plug 14% in there instead of 2% it's challenging to create a functioning business model, no matter what you're selling. There's a reason prices are what they are in any situation. It's pretty basic macro economics (Supply & Demand). Any time you can look at a business idea that's that simple and say "I'm going to be rich!" it's almost a sure thing someone else has thought the same thing, and there is a reason they aren't rich.
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Old 09-17-2013, 02:34 PM   #34
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The way you guys talk, is parts and accessories where the money is made?
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Old 09-17-2013, 02:51 PM   #35
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Barb from Alaska leathers told me right after I had bought my brand new 1200 GS
" You know the bike is just the tip of the ice berg"

The money is always in the aftermarket products, think braces, breast implants, faster mufflers, special boxes to put shit in.
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Old 09-17-2013, 03:20 PM   #36
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Quote:
Originally Posted by FlyRescue View Post
The way you guys talk, is parts and accessories where the money is made?
The money is in taking care of the customer, that's more what we're trying to say.

You've posed some interesting discussion, I'd love to dive further, perhaps this weekend when I've got more free time.
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Old 09-17-2013, 06:37 PM   #37
legion
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Note that this article references profit benchmarks that would be waaay low for a typical dealership in Alaska unless that dealer also had snow machines and winter sports stuff.

http://www.motorcyclepowersportsnews...s_margins.aspx

Rules of thumb:

1) Sales. Bikes take up a lot of space but normally won't exceed 20% of monthly revenue. Usually closer to 10% would be a predictable average for a typical shop.

2) Service. Big money there as long as you can avoid warranty work. Warranty work has a slim margin to it but service work in general is a dealer's cash cow.

3) Parts. This can be big money if run well or a complete cluster if ran poorly. Next time you go into a parts shop look at the shelves and instead of seeing parts consider that you're looking at stacks of $100 bills as that's what all that stuff really is.

It's easier to show profit at month end by not stocking any parts than it is to contrast stock sales against the expense required to earn them. Not meaning it in a bad way but it's also a piece of the business that a typical motorcycle shop might not be expected to have natural skills in. Sure, they may know what parts you want but businesses based on inventory turns and earns requires a unique blend of purchasing agent, discount negotiations with vendors, dating on billing, an xlnt grasp of freight issues and then somebody to peddle the stuff that has a pretty good understanding of what they're looking at.

For Alaska consider that a shop that only focusses on business that's available for 6 months out of the year also has to have thicker margins and higher volume than a normal shop stateside. Like, double or more.

Ever been charged a buck for a crush washer? I've seen a buddy of mine charged $7 for a screw. That's all part of the month end margin that might seem outrageous and it is... but it keeps the heater on for the six months that the door doesn't really need to be unlocked much.

Without at least some extra margin those shops would go the way of the Anchorage Times and none of us would be the better for it. I'm not saying it's ok to pork the customer but I definitely understand that this is not a 1-2% margin business. At least not for more than about 90 days.
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Old 09-17-2013, 07:10 PM   #38
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Quote:
Originally Posted by legion View Post


I've seen a buddy of mine charged $7 for a screw.
?
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Old 09-18-2013, 07:53 AM   #39
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I still can't justify spending any percent buying locally. What's the benefit?

The local economy may survive
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Old 09-18-2013, 09:56 AM   #40
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Quote:
Originally Posted by BARB View Post
I still can't justify spending any percent buying locally. What's the benefit?

The local economy may survive
Restated:

IF the company does NOT survive, you may be SOL stranded somewhere next time.

Don
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Old 09-18-2013, 12:13 PM   #41
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Originally Posted by BARB View Post
I still can't justify spending any percent buying locally. What's the benefit?

The local economy may survive
Are you serious? You own a local business and you can't justify spending any money locally?

What, do you buy your groceries online too?
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Old 09-18-2013, 12:20 PM   #42
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Originally Posted by FlyRescue View Post
The way you guys talk, is parts and accessories where the money is made?
Henry Ford was once quoted as saying that if Ford were to be the sole provider of parts for Ford vehicles, they could give the cars away for free.

Do you think that Harley Davidson makes all its money on the sale of bare motorcycles?

Considering your naivete regarding successful business practices, perhaps you should run for public office. You'd fit right in with those already in power.
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Old 09-18-2013, 12:27 PM   #43
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Quote:
Originally Posted by Brendon@TMS View Post
Are you serious? You own a local business and you can't justify spending any money locally?

What, do you buy your groceries online too?
I believe Barb was asking a rhetorical question, and then giving a logical answer. Of course, she can speak for herself - quite capably.
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Old 09-18-2013, 12:29 PM   #44
Tom S
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Quote:
Originally Posted by Brendon@TMS View Post
Are you serious? You own a local business and you can't justify spending any money locally?


Quote:
Originally Posted by FlyRescue View Post
Thanks for the numbers and 1st hand insight. I'm not necessarily trying to be argumentative, just trying to wrap my mind around this.

Let's split the difference and call it 5%. I still can't justify spending any percent buying locally. What's the benefit? Having it right now? It seems that most people's experience is that it needs to be ordered anyways.

Some of the examples you gave were from before the internet existed. Now that we have an instantaneous global economy, maybe the low volume brick and mortar's will have to reinvent their business model to compete?
Quote:
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The local economy may survive

Tom S screwed with this post 09-18-2013 at 12:34 PM
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Old 09-18-2013, 12:40 PM   #45
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BTW, Brendon, it would be nice to get some kind of a reply to the emails I sent TMS at 12:17 am & 9:09 am on the 17th.
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