The Powersports Industry & M/C Roadracing

Jeff,

I have plenty of experience in multiple verticals dealing with two step distribution and protecting margin for brick and mortar stores. When I was dealing with multi step distribution and in charge of large national accounts MAC, MATCO, SNAPON, Cornwell, ISN etc. and online retailers all of those companies and even the independent driver made money on my products because I chose my margins carefully based on each account and made sure no one could smoke anyone else and we beat the competition handily because everyone made money on my products. If tey made money on my products VS the competition they chose mine..

You missed my point and I am just too tired to continue explain to people that things have changed....so here is my past post on the matter,

I can try but people that do not get out and talk with dealers, and fully understand the ENTIRE marketplace from the consumer on up and just worry about a number will never understand.


1) Online is here to stay....just ask the guy who needs to move a bridge to move a boat
2) Brick an mortar stores are failing in all verticals....just look at shopping malls turning into retirement villages. Online is eating into them...Hopefully by now everyone gets that, I mean come on really?
3) MAP pricing is legal.....has been for years. manufacturers set the pricing of the products they sell...
4) You cannot buy a bike or SXS online from any of the large manufacturers (YET), so in order to sell tires you need to sell vehicles and without BAM you don't sell vehicles.
5) Brick and mortar Service departments are the largest customer of tire companies, not the parts department...Maybe in all your years of selling tires you were not aware of who was making the decisions on when tires need to be replaced on vehicles? news flash it aint the parts department...Service Sells tires, parts just orders them.
6) making service and parts department look like the stealer because of online pricing is a choice made by the manufacturer of the products and not doing the math. see item number 3..I mean after all the tire companies have a choice about MAP.. Again a choice...they either do or don't..
7) How many of these large online retailers are the tire companies selling direct? and around PU or WPS or TR? or pulled out special volume discounts? Do they not watch the costs they sell tires to to PU or WPS or TR and do the math on what they will sell them for to top tier dealers vs online retailers?
8) When you allow products to be purchased online cheaper than in brick and mortar can buy them you reduce door swings.. I assume you know dealers track this...
9) reducing door swings reduces the number of times consumer see new vehicles and touch and feel other products while they are waiting to get thier service done.Why do you think Lowes and Home Depot sell candy bars at the register? it's called and impulse buy...
10) based on my data....3.5mm plus data points per year and over 3,000 locations oil changes are number one and tires are number 2 in service work,,,,so the number 2 reason someone comes into a dealership service department is a low margin, seen cheaper online item...dirt bikes are even worse as there is a larger DIY base there, always has been.
11) reducing the door swings on the number 2 purchased service or number 2 serviced item (DIY) is not good for brick and mortar



At the end of the day the industry needs brick and mortar stores.... Not providing the right way for them to be successful with a product is the fault of the product manufacturer not the fault of the final seller.

If you cannot see that, then there is no hope of me explaining this anymore. The old school thought process of the tire companies and not controlling their pricing on such a large service items is one of the reasons why we see dealership consolidation...

If you are so good at tracking data you tell me what drives people to come into dealerships? What drives door swings?

How many dealerships in how many regions have you been into in the last 12 - 72 months?

How much time do you spend observing how many people are in for service VS parts VS unit purchase?

How many R.O.s does a dealer do per month month VS how many units they sell?

I know the answer to the last question as I have this data...from stores... So that's why my I can stand by my statement, because I have ACTUAL confidential dealership SALES data that supports my position not just conjecture and guesses. So unless you have DATA from dealership DMS systems and analyze millions of records from thousands of stores, you are just commenting from the peanut gallery...The data you post on here is from the MIC and generally copied from another source and collated by someone...

I have access to the RAW data before the MIC gets it and more detailed as it relates to units and service.

 

You are a bit confused, and I understand that because you are an outsider looking in, and that's evident if you think I don't understand the dynamics of retailing. I started in retail, then moved to Tucker, then worked for Pirelli for 20 years and also for a time at Teknic/Coldwave, a snow and m/c clothing manufacturer. And a short stint in the automotive equipment direct to the retailer business.

So, you have your opinions, but I have more questions for you

How can Wohlfeils Hardware in Saginaw Michigan that's been there for 70 plus years stay afloat when there is a Menard’s less than 500 feet behind their store, and it’s been there for 20 years? For those who don’t know Menards is a regional big box hardware store. Menard’s store has to have more buying power than the tiny Wohlfeil right?

Peacock LTD a multi-line powersports store in Baldwin MI has been in business for 42 years and they are located in the poorest county in Michigan. How can they manage to stay in business?

Ken’s m/c tire in Woodstock GA (he retired a few years ago) was a one-man m/c tire and brake only shop. And to make it even more interesting he required customers to book appointments. How did he stay in business for all those years in one of the hottest m/c markets, metro Atlanta?

2 Brothers m/c tires in Lawrenceville GA was a 2-man shop (Tim retired) and right down the street from both a Suzuki dealer and a Cycle Gear store. Why did both the Suzuki dealer and the local Cycle Gear refer customers to Tim and his brother to buy tires? Surely both of those shops were bigger and received bigger discounts from their distributors, right?

If you trying to find reasons to complain about the business, you can’t focus on your business. Volume discounting in all aspects is the Amercian way and while retailing is changing and there is MAP pricing in place one thing is for sure. If you can figure out how to retail yourself, products, and services you will succeed, but it’s never easy and you can’t rest, you have to continue to improve and change.

 

This is a little 'inside baseball' so probably 3 people will care about this, but here we go.

The last 5 years or so its been much more fair to the brick and mortar dealer. When Dunlop came out with their pro dealer program they made very attainable goals for dealers to not only buy cheaper but also give them rebates that don't even apply to online sales. They also started MAP pricing on most lines. They absolutely crushed the other brands for a couple years before the other major brands followed suit and also started MAP pricing. Also our (PU) threshold for a dealer to get even better pricing was only 20 tires and went up from there. And its not like the guy doing the 2000 tire level is getting 10% more, its very slim margins so not big jumps as you go up. Even a very small shop can actually make money on tires, and not something lame like 5% either. Some brands are better than others for sure. Do some brands sell direct to the monster sized online guys? Yep. But they have to stick to MAP too and with a brand like dunlop-they can't utilize the very generous rebates that Dunlop provides so it actually puts the ball in the court of the B&M shops.

10 years ago it sucks for normal shops for sure as the online guys crushed them on pricing but its just not the truth anymore from any major brand that anyone cares about.

 

And doesn't most everyone have MAP pricing now except for maybe Shinko?

 

Not sure about them but correct, all the major and many of the minor brands have MAP now.

 

OK Jeff here we go....

Piece by piece your comments in BOLD

You are a bit confused, and I understand that because you are an outsider looking in, and that's evident if you think I don't understand the dynamics of retailing. I started in retail, then moved to Tucker, then worked for Pirelli for 20 years and also for a time at Teknic/Coldwave, a snow and m/c clothing manufacturer. And a short stint in the automotive equipment direct to the retailer business.

Calling me an outsider is laughable I have more data on service departments in more locations than just about any other company in the industry...Look me up and my professional career You will find I have more data than the stuff you copy and paste on here like it's yours from edgewater research and other sources...Out of curiosity where do you think edgewater gets their market information?

How can Wohlfeils Hardware in Saginaw Michigan that's been there for 70 plus years stay afloat when there is a Menard’s less than 500 feet behind their store, and it’s been there for 20 years? For those who don’t know Menards is a regional big box hardware store. Menard’s store has to have more buying power than the tiny Wohlfeil right?

Thanks for making my point Jeff I appreciate it very much...It shows the suppliers to both parties do a good job of watching pricing all the way through the supply channel.....This is EXACTLY my point... Little and BIG guys survive off the same product...I think you are missing my point. If this is your argument then you just agreed with me.

2 Brothers m/c tires in Lawrenceville GA was a 2-man shop (Tim retired) and right down the street from both a Suzuki dealer and a Cycle Gear store. Why did both the Suzuki dealer and the local Cycle Gear refer customers to Tim and his brother to buy tires? Surely both of those shops were bigger and received bigger discounts from their distributors, right?

NONE of this argument brings into account selling direct to the ecommerce folks... I guess you chose to just ignore that part of the conversation????? The fact that ecommerce is killing brick and mortar....I mean if you are going to ask questions at least ask good ones..Also my guess is that little 2 man shop had fractional overhead compared to a multi line dealership or cycle gear, and cycle gear nationally has never been strong in tires, they focus on accessories and I don't know maybe GEAR like in their name...It probably costs that little shop fractional amounts of money to get a tire in (price of the tire excluded) mount it and send it out the door..you are making examples of one or two, I am talking about a NATIONAL level...

Oh and thanks again for making my point so clearly I could not have said it better myself....The margins on tires were so low and crappy the OEM dealership did not want to mess with it so they sent their customer away...Now that customer does not have the opportunity to walk by the new RMZ450 to see if he might like it..THAT RIGHT THERE IS MY EXACT POINT!!! I mean why would a dealership or any business send customers away unless they could not make money doing that type of work...I see it all the time..It's why independent repair shops exist next to OEM dealerships...The bigger stores have more overhead therefore need to charge more....That's why OEM dealerships many times will not work on units older than 10 years...They have limited labor capacity and pick and choose what to work on based on recalls, service work etc. So if they pass on the tires it's because there is no money in the job.

Now imagine a world where the Suzuki dealership could actually make money on selling a tire...Maybe then they would not send their customer down the road and maybe then that customer might stumble across a new bike and like it.....Maybe then they might buy it, maybe then the OEM's would sell more bikes, maybe then they would have more money to invest in racing...wow what a novel thought...

Also you have never told me, with actual DATA, that I am wrong about ecommerce selling tires less than the local dealer can buy them? You just keep mentioning one brick and mortar VS another? What gives there?

Peacock LTD a multi-line powersports store in Baldwin MI has been in business for 42 years and they are located in the poorest county in Michigan. How can they manage to stay in business?

What's your point here Jeff? they have been a customer of mine for 10 plus years.. Jim is a good guy...I never ever said Tire companies were driving dealerships out of business find where I said that please.... I said they are not good for brick and mortar because they have reduced their product to nothing but a commodity and make the dealerships look foolish at times all for the sake of someone making their quarterly number and when you do that with one of the MAIN items going through a service department it hurts the dealership. Like you mentioned above...I am in stores ALL the time and I have yet to find one on the last 10 years that is excited about selling MC tires...I will also tell you that all the MC tire companies are missing the mark anyway and unless something changes soon the UTV's will continue to take over and I can tell you that the dealerships do enjoy selling tire and wheel combos...

Volume discounting in all aspects is the Amercian way and while retailing is changing and there is MAP pricing in place

I never said volume based pricing was not the American way it always has been ,but as some point you hurt your customer by taking care of the few and not the many.

When I traveled with road reps and visited dealers/shops I heard that all the time. But the rep and myself showed store after store across North America if you want to be competitive in the tire business you need to commit and don't do it half hearted.

This is my point you posted this on 12/15/19..This is the mentality this kills brick and mortar...Same philosophy that pummeled growth in powersports for years...Its not the manufacturers fault it just bad dealers. I mean that is essentially what you are saying here...don't blame the manufacturer blame the dealer, right?

At the end of they day making it hard for a dealership to make money on tires is a bad thing.. UNLESS they commit to the all mighty tire god and buy into the program, that kind of mentality is what drives dealerships crazy and breeds bad relationships with suppliers.

You act like making it hard for a dealership to make money on tires and the race to the bottom for tire prices is a good thing...

So back to my original statement 6/28/19 posted by ME

The tire companies are currently doing more damage to this industry than any other inter industry companies. The tire have ruined dealer door swings. One of the most common items to be replaced on a bike especially dirtbikes are tires. You can currently go online and have a tire delivered to your door for the same price many of the local dealers can buy those tires. The tires manufactures and distributors have too many "programs" that you need to meet to get good pricing on tires and even then there is little margin on them. The fact that you can get the most commonly changed items for a bike over the internet cheaper than the dealer means there is no reason for that consumer to go to the dealer, reducing door swings and the connection between the dealer and the customer. The customer also does not see new stuff....

So that is my original post from 2019....NOW can you please show me another inter industry product line that has a negative effect by driving customers out of the dealership service departments. I mean you agreed to that just earlier today....now I understand things have changed in the market a bit since 2019 and more folks are doing MAP and that's a good thing and was probably drive from pissed off dealers...

 

Another question please

Brown Motors in Petoskey MI is a Ford, Lincoln, Jeep, and Chrysler dealer. From what I see they have probably about 40 tires or so in stock. Royal Tire also in Petoskey is a small tire and repair shop and they probably have 400 tires in stock. Belle Tire has one of their 140 Midwest locations in Petoskey and also work on vehicles and they probably have 1200 tires and maybe 200 wheels in stock.

They all sell tires and work on cars, but who of these three retailers do you think knows more about tires, focuses on selling tires, have an online tire presence and probably get a greater deal on tires from their tire wholesaler/jobber?

 

I think you guys just set the record for filling a full page with the lowest number of replies!

 

I can't figure this one out and I used to work for them? Tucker is no longer an Arai, Yosh, Metzeler, Memphis Shade, etc., etc. distributor but yet they do this?

Tucker Powersports has announced that it will sponsor the 2023 AIMExpo to help dealers launch into the 2023 riding season. Tucker will provide a sizable presence on the show floor, highlighting the newest products from its twelve owned brands, showcasing programs to support its 7000+ dealers and offering some fun with its sponsorship.

Tucker brands such as Kuryakyn, TwinPower, ProTaper, FirstGear, DragonFire Racing, QuadBoss and Answer Racing will use AIMExpo as the first public showing for their newest products. The company’s brand experts will be sharing detailed information on the design and development of new accessories and riding gear and will be working with dealers to help them prepare their dealerships to meet consumer needs in 2023. Numerous brand managers will make presentations in the Tucker display each day.

New products displayed by Tucker include "new to the USA," Forcite Helmets and “new to powersports," Segway products, along with numerous other items.

AIMExpo has invested heavily in the show’s E-Bike Pavilion and Demo Ride area, and Tucker products will be a big part of the show. On Wednesday, the focus will be exclusively on Tucker’s E-Power portfolio of products in that space. Experts from Fantic Bicycles and UBCO adventure bikes will be there to assist riders as well. Dealer attendees will be the first to hear the latest news from the show's New Products Showcase and will have a chance to learn more from their Tucker Rep, all of whom will go through extensive product training in advance of the show. Show Specials will be offered only to dealers in attendance at AIMExpo. Tucker dealer support programs will be highlighted at the show as well. Tucker University, the company's online training program, will be available at the show to assist with registration, course options and updates.

The fun begins Feb. 15, when AIMExpo throws the Industry Party powered by Tucker. It is the biggest social event of the year for the powersports industry. All attendees and exhibitors are invited to enjoy great food and drinks and step away from business conversations to enjoy the company of the wonderful people in the powersports industry. "We've worked hard to provide Tucker dealers with everything they need to be prepared for the Spring selling season," said Jamie Kempinski, director of business development, Tucker. "Our team and the staff at AIMExpo are committed to making this the best show ever." AIMExpo 2023 is scheduled for Feb. 15-17 at the Las Vegas Convention Center.

 

"Forcite Helmets"? Dubious name, lol They still have Kuryakyn, and ProTaper, so, I guess that's enough.

 

And now this, WTF?
Tucker Powersports and Dainese have signed an exclusive agreement and Tucker will now distribute the renowned motorcycle product line to its network of powersports dealers in the U.S. The multi-year agreement includes leather and textile riding gear, boots, shoes and Dainese's line of protective armor and airbag D-Air jackets and vests. Dainese products will be available through Tucker later this year.

Founded by Lino Dainese in Molvena, Italy in 1972, the Dainese company is a leader in the development of protective apparel for active sports. The current motorcycle product line includes D-Air airbag jackets and vests, a product made famous by MotoGP riders Valentino Rossi and Joan Mir, and includes numerous styles of leather and textile suits, jackets, pants and gloves, boots and shoes. The agreement also includes the distribution of Dainese's TCX-branded road, off-road and urban footwear.

"We're thrilled to add Dainese to our roster of great partner companies," said Marc McAllister, president and CEO, Tucker. "Our dealer network will make Dainese products easily available to riders looking for high-quality riding and protective gear."

“I’m excited about signing this agreement with Tucker Powersports, a new milestone in our journey of expansion and consolidation in North America,” said Cristiano Silei, CEO, Dainese Group. “The U.S. market has always played a crucial role for our Group and I’m sure that choosing a distributor with such a widespread, structured sales network will allow us to achieve increasingly ambitious goals.”

 

I heard about this yesterday but I hear a lot of stuff so I didn’t believe it haha.

 

I heard that Avon tires is going to quit selling m/c tires in the North America? The market is changing for sure!

 

And US m/c tire sales for 2022 vs 2021 are basically flat.

 

I'm shocked they didn't pull out years ago. They sell a few for HD's but they have had microscopic market share for over a decade.

 

A small market share for sure but the aftermarket fringe HD guys love them, and most of them figure out how to buy them.

 

They make a great tire. So does pretty much everyone. Super stiff competition these days and I'm certainly not on the v-twin side but I maybe sold 40 Avons a year out of many thousands of everything else. Pretty much all of them were front trike tires because nobody else has them.

 

I think some of that was still availability driven. Not sure if UTV tire sales are in that or not too but some the most popular stuff on 2 and 4 wheels were still really hard to come by. Seems like inventory will be far better this year so I hope to see the numbers creep up a bit.

 

NO ATV/UTV/SxS tires included. The issue was container availability and at a decent cost!

 

I know for me I'm selling far more dollars in UTV tires these days than motorcycle. Would be interesting to see those stats.