Monday, August 30, 2010

Dealer News and a lack if investigative journalism

It's a sad trend in the industry when we are down to three magazines for dealers MPN, Dealer News, and Powersports Business. Scooter dealers only count on Scoot but its mostly geared towards the consumers. It's really not a consumers magazine place to educate dealers about how to run a better shop or let you know which distributor has closed, but from time to time it happens. Still I think we've gotten to the point where no magazine can report the news for fear of reprisal and for the fact they all want to stay in business. The only good sources of information are bloggers like Guido Ebert and associated sites of professional journalists who have left the corporate world.

The economic tsunami has destroyed a lot of supply chains for parts. We've tried to get the word out on many issues like parts and where to get them. Even when we didn't buy the company I let dealers know who did and where they can get the stuff.

In the meantime what I see is a lack of professional journalism. Instead of reporting what is really going on everyone is pandering for the next ad. For example not telling dealers the distributor they are taking ads from also owns several retail outlets or sells replacement parts on EBAY. The average dealer won't know this and the average employee at the dealership will never find out because they don't have the time to investigate, but if the principal knew at the time of choosing a new brand he might not pick up a brand that drop ships and sells on Ebay. Why don't magazines list this next to every scooter brand when they do a market survey or a review of product on sale? Because it would cost them ads.

The worst situation is when you see magazines that in the past were flooded with hundreds of ads from China. Advanstar management decided that US distributors at the Dealer Expo have to pay in advance to exhibit, but the Chinese companies got away with putting a deposit down. Do you know how many Chinese companies never paid their bill? Why did Americans have to pay up front and the Asians who helped cause this mess never pay? All these policies should be reported on and exposed for what they are. If anything I think a magazine that reports on its own mistakes would be a better magazine.

We should also expose the companies that run ponzi schemes be it a Go Kart distributor selling penny stocks or a scooter importer asking dealers to buy shares. We have too many of these. Earlier this year we heard from several dealers that purchased shares in a Chinese distributor out of Texas. The Chinese importer sold shares to dealers who purchased the scooters for $500 a piece and with every scooter got shares, so they loaded up on 2007 and 2008 models of scooters that are still sitting on the floors today with no parts, support, or warranty. All of them thought they could sell these shares at a later date. The company is now gone.

Are the dealers to blame? Yes, partially, but is so is the media because I saw their ads in the Dealer News magazine and after this all went down nobody reported anything. It's like when Daelim closed. The only magazine that reported that MRP purchased some Daelim parts was Powersports Business. I have to commend them for that because they were more than happy to take ads from Daelim Motors USA and when they closed they did a service to the dealers by following up and letting them know MRP now had parts.

Right now some magazines are in an interesting position. You won't see Dealer News talking about Powersports Factory because they are in litigation.

For example Dealer News magazine is still suing Powersports Factory which by all accounts if you read this link to the SEC info has no assets and only $900, Why hasn't Dealer News reported on this since its important for scooter dealers to know this stuff. Most dealerships will not take the time to read the financials on a company all they care about is that they are buying a $500 scooter. This is the type of stuff they need to know. Sadly they dont have the time to be informed and thats what they count on the magazines for.

Advanstar Commnications, Inc. v. Power Sports Factory, Inc. & Shawn Landgraf
Advanstar Communications filed suit against us in the Superior Court of New Jersey on August 19, 2009, for $43,955 for advertising services, all of which is included in accounts payable. The Company intends to settle this lawsuit.

Read more:

What I have discovered is that short of the major brands. Most fourth tier brands owe money to the magazines. So everyone is stuck between a rock and a hard place. You can't say so and so owes me money because then you will never get paid. Worse yet there could be a flood tomorrow in their warehouse and you will certainly be at the end of the list if you don't say something nice. So we've seen this across the board from Team Joyner closing, Daelim, United Motors ( United Motors was on cover Dealer News and had spreads in Motorcycle News at one point ) yet nobody really covered these stories. TANK Powersports is the biggest one I can think of, when they closed they owed so many magazines money it wasn't even funny. I can only imagine if some of these brands had paid their bills magazines like Scooter World and Motorcycle Industry would still be around. It's a real shame because one hand feeds another and now more than ever dealers need to know that the company they are buying from isn't running some Ponzi scheme or liquidating bikes.

Maybe its just me, but I believe in that the more information out there the market however small will be able to grow once all the scams and fly by night operations leave. Thoughts?

No comments: