Tuesday, March 8, 2011

New Stores have started to call again! What to do as a new owner

Ok, so the phone is ringing (thank you gas prices) people want to talk for two hours about how to start a new scooter shop.

It's 2008 all over again. Scooter sales driven by gasoline prices. They are going up up up!

I think what they really want are the answers to how to properly run a scooter shop. Those two are separate things and not mutually exclusive. Then again there is no right answer, I tell people do something that is looks good, is presentable, and regardless of price point offers parts and accessories. The last part a lot of owners don't get.

So I do offer consulting services, but I charge for that. Unfortunately I do not have time during the day to talk to potential "investors" or people looking to open an EV store on what brands to carry all day long. We have a quota we have to meet in sales. I will respond by email, but what worries me is that 90% of the calls usually start off with questions related to:

1. Price

2. What is the cheapest CHINESE scooter ( why would you want to start asking on CHEAP?) What are the cheapest parts I can buy? Thats the wrong approach. Focus on accessories and their quality not the price. Same for bikes

2. Opening a New Store with NO Scooter Shop Experience - There is no manual hire a good manager with experience

3. Not wanting to pay for experiences employees and how to recruit mechanics.

I say we have it all wrong and I explained this at the Dealer Expo.

1. You want several tiers of brands. Tier 1 - Your top Japanese, used Japanese, Italian or Tier 2 Taiwanese / Korea Brands ( some Chinese higher end ) brands

Then you worry about the Chinese. Funny thing is when a dealer tells me LANCE or CF MOTO is too expensive I'm at a loss for words if that happens. You need X to sell Z you cannot just sell all bottom Tier, the store unless your in the backwoods hood of swamp land will not survive. Period.

Once we get past that stage. It comes to employees.

2. Hire competent Staff and Give them the tools they need. You know like mechanical tools, a DIGITAL CAMERA, Internet Access etc...

Here is the hard part.

3. You found the staff. PAY A FAIR WAGE.

What I find in this industry is that a lot of young people that know scooters get taken advantage of. They burn out before 30. They don't get paid half of what they are worth at retail or even at DISTRIBUTORS ( one guy in particular in the industry is notorious for this ) and the owner gets rich off the young Vespa minded recruits every year. They sell you on your passion, your dream, and then they leave after a few years. Why do these young guys leave? They love all things Vespa or Lambretta. They love vintage Mod clothing, they have taken the plunge and learned about modern twist n go scooters, they learned about the Chinese and now they find out they made more money at 20 than they do at 28? They could have stayed at McD's and gone up that ladder and made $60k a year instead they are 28, doing a million in sales a year and get paid peanuts. No health care, no profit sharing, nothing to keep them in the business.

Same goes for sales reps in this business. The more you sell sometimes the employer cuts your commission. This goes all the way to the top even at Parts Unlimited they burn the young guys for a reason. Doing great with your territory? Let's give you fewer stores, or let's change the way you get paid commissions. Eventually they get fed up and leave. Top talent leaves the business at all levels.

You don't want to be that guy. You don't want to be the store owner that burns people out. Some survive 30 years doing this, but not everyone can be him anyways, more like he's a strange part of the equation because most people in the industry that try this leave the business in one or two years.


Sell Coffee, Gelato, whatever it takes to survive the winter. Because odds are your store will need rental income or another source of revenue to stay healthy. You cannot live off gasoline prices.

The stores that do well Stock different Tiers NOT JUST BOTTOM END.

The stores that do well sell PARTS AND ACCESSORIES. Not just the cheapest replacement parts they can find.

The stores that do well don't pre-sell everything they stock ( not just replacement parts they stock accessories )

The stores that do well Have WELL Paid employees. Do you want to be changing sales managers every year?

Trust me on this. If you are new to the business. You saw some article on gas prices going up and scooter sales booming. Buy good bikes, buy good tools, pay fair wages, stock the right stuff not just the cheapest scooters you can find and your store will grow.

Do the opposite and I can show you a list of 2,000 plus stores that have closed the last ten years that I have done business with. I have the notes on why they closed, I've been to the auctions, and I study where they went wrong. We have a history or repeating the same mistakes over and over and if you can learn anything learn from that.


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