Monday, November 15, 2010


Gas prices are going up.

I just drove by my local gas station and it's $2.95 for regular gas in Miami. It's November and hopefully by the end of the month it will be well over $3. Why do I think this is a good thing? We'll for starters it means people will start flocking to scooter dealerships again since our business is directly proportional to the price of gas. Every year be it 2003, 2005, 2008 higher gas prices equal a rise in sales.

The national average price of unleaded regular gasoline is $2.89 per gallon, 5 cents more than last week. Florida’s average price of $2.87, my local average here in Miami about $2.90. I check every week to see where we're at and let me tell you the trend thanks to the Fed's move in pumping all this cash into the system means gas prices will go up ( on a side note it would have been better to lend this money to small companies instead of making the dollar worth less ) This time around I hope stores will listen to my advice. Don't go crazy buying inventory unless you see sales, and don't forward commit to 200 scooters you can't sell. Focus on building your store and P&A. That way if its a momentary spike you will stay in business.

So gear up, promote, and get those save money on gas signs ready because gas prices could easily hit $3.50 in a few weeks and a new semester of college starts in January. Your competition is gone, now is the time to Attack ( see previous blog)

It's like a time warp, but it couldn't have happened at a better time since the Powersports industry really needs gas to hit $3.5 to make up for one of the worst summers in history after a dreadful 2009 where prices were kept artificially low to spur the US economy. Hopefully this time around the crazy investors and private label fly by night guys won't run into the business to open 200 scooter shops again, but I can already see the phone calls when gas hits $3.90 "hi my name is so and so and I lead an investment firm from bla could you tell us about 4 or 5 companies we could purchase to make one mega scooter company we got ten million available to us," to which I reply "sure send me a free first class ticket and we'll talk in person." It happens every two to three years. They come out of the gutter like the zombies in The Walking Dead. You can't stop these guys you just have to learn to live with them. It's like all the investors pumping money into electric scooter company start ups which are doomed to fail since there is no consumer demand yet.

Gas prices going up are good for most of the dealers and if you outlived your competition then take advantage of it. Put up a sign next to that gas station on the corner "REMEMBER 2008? MAKE SURE YOU HAVE A SCOOTER." Also, don't fall in the electric trap since many of these start up are pushing vehicles that don't work and this will be the next big bust. You are probably better off sticking to gas powered vehicles. Products like Vectrix work, but they have to be half the price for consumers to accept them. In the meantime leave it to development councils and city councilmen to keep investing in electric start-ups that are doomed to fail. I will write more about this later.

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