Wednesday, March 2, 2011

OIl Prices to be above $5 by Summer Scooter Sales to Spike BEWARE

Oil producers in other parts of the world can't be sure what will happen to the demand-and-supply equation, so they're hedging against future shortages. Gas is going up and it seems like Libya is just part of the problem. It could be a civil war that lasts months for all we know.

So why do I keep talking about this? Check this link out for the $5 gas thats coming soon.

This could be a great opportunity for many new investors to come in. For store owners under siege to sell out, bring in fresh blood, or expand. It could also be the time when scooters finally become a part of the mainstream and not a fad.

Because history is about to repeat 2008 except for a few differences.

The economy could derail making it even harder for people to buy a scooter.
China is increasing prices and more containers are getting stopped by EPA

Our market is devastated since we've lost a third of all scooter dealers.

There is less consumer financing

There is less dealer financing

More people think buying China direct is the solution to the margins issue ( the opposite my friends )

We have more fly by night guys working from home. Yes, I know some people in the industry think it's legit, but it's not. A business license in a small town does not equal a brick and mortar store.

Most of the people I met with at Dealer Expo have been in business 3 years or less they have no experience in dealing with an upswing and will repeat the madness of 2008

The Chinese factories at Dealer Expo are pushing more containers down everyones throats again

US Dealers are less educated than ever when it comes to scooters.

Major powersports stores with good credit like Honda / Yamaha / Harley franchises are likely to get in on scooters and buy a bunch of cheap Chinese brands at the last minute when Honda and Yamaha can't meet demand

Lot's of things to watch out for. Who cares? We should all care if we want to have sustainable growth. However, I keep seeing the fly by night mentality in full effect. We are on a collision course with a worse 2012 if we don't put the breaks on growth in 2011.

I already hear of several potential lawsuits against everyones favorite brands because they keep setting up dealers inside the territories of other dealers desperate to liquidate those 2008/2009 General Electric buy backs. My only advice is stay the course, don't give in to desperation. Killing the dealers or causing suits will only hurt everyone in the long term.

Sustainability. Something the guy with no overhead working from his garage at home selling on Ebay or the Chinese guy who floods the market doesn't get, but every other dealer/distributor should.

We need to make 2011 sustainable not a repeat of 2008.

No comments: