WEBVTT X-TIMESTAMP-MAP=MPEGTS:90000,LOCAL:00:00:00.000 1 00:00:09.199 --> 00:00:13.699 what code episode 112 for the lowdown radio show presented by a 2 00:00:13.699 --> 00:00:19.100 TV ryder.com I'm Neal Graham I'm perplexed by many things in life 3 00:00:19.100 --> 00:00:22.899 but none more than this when I buy a pack of sweet Caporal cigarettes 4 00:00:22.899 --> 00:00:27.000 from old mrs. Harrison down at the General Store she doesn't charge a 5 00:00:27.000 --> 00:00:33.399 separate fee for handing them to me off the shelf and yet when I 6 00:00:33.399 --> 00:00:36.399 buy a motorcycle the price in the manufacturer's website isn't what 7 00:00:36.399 --> 00:00:39.200 I pay at the dealership because they then have to pay for shipping 8 00:00:39.200 --> 00:00:45.100 and set up a separate line items why isn't there just one price the 9 00:00:45.100 --> 00:00:48.100 National Powersports Dealers Association is lobbying for just 10 00:00:48.100 --> 00:00:54.000 this but alas it's not as simple as it sounds long time dealership 11 00:00:54.000 --> 00:00:57.200 man in NPD a board member Mark Sheffield joints me today to 12 00:00:57.200 --> 00:01:00.500 untangle the bizarre and Byzantine pricing practices of the 13 00:01:00.500 --> 00:01:05.200 motorcycle industry all this. on this week slow down radio show 14 00:01:05.200 --> 00:01:12.000 going in this topic about pricing let's establish your Bona fides 15 00:01:12.000 --> 00:01:16.700 what's your background working in dealerships what's your thumbnail 16 00:01:16.700 --> 00:01:19.400 sketch. sew in. 17 00:01:21.099 --> 00:01:27.299 1993 I got out of the military and on a Monday started working on a 18 00:01:27.299 --> 00:01:32.200 Powersports dealership small Yamaha dealership on a Tuesday and 19 00:01:32.200 --> 00:01:36.400 I was employee number for guy came in early in the morning built 20 00:01:36.400 --> 00:01:40.099 bikes or two parts counter in the afternoon so the occasional bike 21 00:01:40.099 --> 00:01:44.200 and stay late when we sold something to get it ready and then 22 00:01:44.200 --> 00:01:49.299 there would have worked at Woods Fun Center in Austin dealers in 23 00:01:49.299 --> 00:01:54.900 the country at that point in time and we were acquired in 99 by a 24 00:01:54.900 --> 00:02:00.799 consolidator call APS when I'm work today PS4 a couple of years 25 00:02:00.799 --> 00:02:04.200 doing Acquisitions of dealers across the country think we 26 00:02:04.200 --> 00:02:06.700 acquired eight in the two and a half that I was there. 27 00:02:08.300 --> 00:02:15.000 pretty much figured out that I was not a corporate kind of guy and so 28 00:02:15.000 --> 00:02:18.699 left there after two and a half years I think that was in 2003 29 00:02:18.699 --> 00:02:25.800 2004 and went and managed a large Honda dealer in Houston for about 30 00:02:25.800 --> 00:02:31.500 a year-and-a-half and then the 2006 we had the opportunity to buy 31 00:02:31.500 --> 00:02:36.000 a dealership there just North of San Antonio in New Braunfels Texas 32 00:02:36.000 --> 00:02:42.800 and I'd never really wanted to be in that position I was perfectly 33 00:02:42.800 --> 00:02:46.599 fine managing a parts department but Mark would she like worked 34 00:02:46.599 --> 00:02:55.400 with in the past maybe an offer and I couldn't refuse and so went 35 00:02:55.400 --> 00:03:00.400 to manage not still went and did that for about 12 years I really 36 00:03:00.400 --> 00:03:04.800 enjoyed the process of building the dealership up I didn't enjoy 37 00:03:04.800 --> 00:03:07.699 the process of maintaining at once we got into that level. 38 00:03:08.199 --> 00:03:12.599 so in 2016 I semi retired still associated with the dealership 39 00:03:12.599 --> 00:03:17.000 still do a lot of work for them but also do some other work in the 40 00:03:17.000 --> 00:03:21.300 industry 8 so I'm on a couple of boards I get our associations One 41 00:03:21.300 --> 00:03:26.800 National one in Texas somehow I believe I ended up as a board 42 00:03:26.800 --> 00:03:30.800 member on a public company which still to this day amazes me that I 43 00:03:30.800 --> 00:03:35.199 was chosen for that and then I do a little bit of Consulting work in 44 00:03:35.199 --> 00:03:40.300 the industry one with a large provider of websites and then I 45 00:03:40.300 --> 00:03:44.900 also do some contract work with a large dealer group kind of helping 46 00:03:44.900 --> 00:03:48.599 them to refine their processes now that we've established that you're 47 00:03:48.599 --> 00:03:52.599 not just a vagrant who managed to make it on to this punk-ass I'll 48 00:03:52.599 --> 00:03:58.400 be Hood many vagrants you work with such organization called the 49 00:03:58.400 --> 00:04:03.099 dealership Dealers Association National Powersports Dealers 50 00:04:03.099 --> 00:04:03.400 Association. 51 00:04:08.199 --> 00:04:12.199 this briefly and then tell me what this new white paper that you've 52 00:04:12.199 --> 00:04:13.900 launched what it's trying to address. 53 00:04:15.500 --> 00:04:21.699 so the npda is the third attempt at a national dealer Association 54 00:04:21.699 --> 00:04:26.600 and you know they exist and have existed in Auto for a long time 55 00:04:26.600 --> 00:04:30.300 but Powersports has never been able to put one together and. 56 00:04:32.000 --> 00:04:36.800 there's complexity in the US because there's a need for this 57 00:04:36.800 --> 00:04:42.600 National Organization that is going to represent dealers in 58 00:04:42.600 --> 00:04:48.100 discussions and talks with the manufacturers but there's still a 59 00:04:48.100 --> 00:04:53.300 lot that needs to happen in the states at the state level you know 60 00:04:53.300 --> 00:04:57.899 there are very few to Federal National laws that impacted 61 00:04:57.899 --> 00:05:05.899 dealers and so we kind of exist in this gray zone between the states 62 00:05:05.899 --> 00:05:12.500 in between the manufacturers. and today we have about 430 63 00:05:12.500 --> 00:05:18.500 members if you want to put that in context and there are debates on 64 00:05:18.500 --> 00:05:24.300 this number but there's somewhere between 38 and 4800 franchise 65 00:05:24.300 --> 00:05:34.699 dealers across the country would love to get to 1000 that that's 66 00:05:34.699 --> 00:05:39.800 really what we are at the continued to push for we're making 67 00:05:39.800 --> 00:05:45.800 some inroads and I think we're doing some good but it's been a 68 00:05:45.800 --> 00:05:52.199 lot of work and it's taking a little little time for us to find 69 00:05:52.199 --> 00:05:55.600 our footing but we're getting there and we're getting to the 70 00:05:55.600 --> 00:05:59.399 point that we got enough members now to where the manufacturers 71 00:05:59.399 --> 00:06:03.399 will actually. look at us and talk to us and 72 00:06:03.399 --> 00:06:08.399 treat us like we are an actual representative of the dealer body 73 00:06:08.399 --> 00:06:12.899 so that made it always always liked it but we're getting there. 74 00:06:15.500 --> 00:06:19.100 this raises an interesting question for me because as a very 75 00:06:19.100 --> 00:06:23.699 non businessman myself when I go in a dealership and I see all the 76 00:06:23.699 --> 00:06:26.399 inventory they have and all the staff and there's a big dealership 77 00:06:26.399 --> 00:06:31.800 near me and they've got to 85 employees 50,000 square feet every 78 00:06:31.800 --> 00:06:34.500 imaginable brand except maybe the Russian brands. 79 00:06:35.500 --> 00:06:39.699 and I look at that and you know I break into a sweat and then you 80 00:06:39.699 --> 00:06:43.300 here on top of that you hear about this this what is a often a 81 00:06:43.300 --> 00:06:46.899 combative relationship between oems and dealerships. 82 00:06:48.500 --> 00:06:51.000 and it's such a position in this is kind of what we talked about 83 00:06:51.000 --> 00:06:53.600 today it's a bizarre relationship because you know if you go to Home 84 00:06:53.600 --> 00:06:57.000 Depot they sell Makita and DeWalt Milwaukee and all these other 85 00:06:57.000 --> 00:06:58.800 brains hundreds and hundreds of France. 86 00:06:59.699 --> 00:07:02.699 if your motorcycle dealer now of course she might have you'll have 87 00:07:02.699 --> 00:07:07.699 aftermarket stuff from various Tucker Rocky or Brunson limited or 88 00:07:07.699 --> 00:07:10.600 so on you sell those parts but the by far the majority of your 89 00:07:10.600 --> 00:07:15.600 business you're selling products from a single company or maybe two 90 00:07:15.600 --> 00:07:19.000 or three companies. and it seems like there is this 91 00:07:19.000 --> 00:07:24.600 constant battle between the OEM trying to jam motorcycles down 92 00:07:24.600 --> 00:07:28.100 your throat and the dealer is going to hang on a hang that we 93 00:07:28.100 --> 00:07:31.899 can't sell that are we can't sell that quickly enough for we don't 94 00:07:31.899 --> 00:07:35.500 have the floors by soaked can you summarize in a nutshell what this 95 00:07:35.500 --> 00:07:39.500 relationship is like between dealers in OEM. 96 00:07:41.300 --> 00:07:46.199 can't can't make a blanket statement because that really 97 00:07:46.199 --> 00:07:52.500 varies between. different manufacturers and at a 98 00:07:52.500 --> 00:07:55.600 different times those relationships can be good and 99 00:07:55.600 --> 00:08:01.100 different times they can be strained what is creating a lot of 100 00:08:01.100 --> 00:08:09.100 pressure today. is the the oems are trying to 101 00:08:09.100 --> 00:08:15.500 insert themselves more into the Dealer operations which creates 102 00:08:15.500 --> 00:08:21.000 conflict and they said what does that mean insert themselves into 103 00:08:21.000 --> 00:08:28.800 do we have we operate most dealers operate with what's called EMS a 104 00:08:28.800 --> 00:08:34.899 computer system. and manufacturers now are tying 105 00:08:34.899 --> 00:08:40.200 most manufacturers are tying a portion of the profitability that 106 00:08:40.200 --> 00:08:45.799 we make on the vehicles we sell to dealers allowing them certain 107 00:08:45.799 --> 00:08:52.200 access and now the major vendors in the industry they want access 108 00:08:52.200 --> 00:08:58.399 to rdms they they want to be able to see what we're selling when 109 00:08:58.399 --> 00:09:04.899 we're selling it with very little control over what they have access 110 00:09:04.899 --> 00:09:13.000 to and I've equated this many times to being arrested and a 111 00:09:13.000 --> 00:09:18.200 phrase that I used with dealers is that anything that you share can 112 00:09:18.200 --> 00:09:23.799 and will be used against you. and to put that in context if you 113 00:09:23.799 --> 00:09:29.200 were a dealer that's got five Brands and you've got a couple of 114 00:09:29.200 --> 00:09:36.399 vendors who have access to your system and they see that you're 115 00:09:36.399 --> 00:09:42.600 selling more of somebody else's brand or that maybe you're making 116 00:09:42.600 --> 00:09:49.100 a higher margin on their product and somebody else then they have 117 00:09:49.100 --> 00:09:57.200 incentives to try and level up or or do certain things to move the 118 00:09:57.200 --> 00:09:59.500 dealer in that direction and so now. 119 00:10:00.799 --> 00:10:06.200 you know they not only they want access to rtms they want access to 120 00:10:06.200 --> 00:10:11.700 our financials they want access to our website and and where this is 121 00:10:11.700 --> 00:10:18.299 very problematic on the website for an as let's say that you're a 122 00:10:18.299 --> 00:10:24.899 Kawasaki dealer and a player Steeler and a BRP dealer and you 123 00:10:24.899 --> 00:10:28.700 have a customer that comes to your website and they look at a 124 00:10:28.700 --> 00:10:33.399 Kawasaki and they go that's the vehicle that I want to buy and 125 00:10:33.399 --> 00:10:36.299 they submit a lead to the dealer on that. 126 00:10:37.299 --> 00:10:42.500 what if one of those other manufacturers has access to that 127 00:10:42.500 --> 00:10:45.200 lead and they go well this customers looking for a Kawasaki 128 00:10:45.200 --> 00:10:50.899 I've got a bike that's consistent with that I'm going to start 129 00:10:50.899 --> 00:10:57.200 targeting that customer with offers and maybe I'm even going to 130 00:10:57.200 --> 00:11:05.200 push that consumer to another dealer has a better selection in 131 00:11:05.200 --> 00:11:11.100 so yeah it it's problematic. is it legal to do this. 132 00:11:12.200 --> 00:11:18.000 that's a gray area and there's state and federal laws but it 133 00:11:18.000 --> 00:11:24.200 doesn't exactly fit into any of the laws that exist today I will 134 00:11:24.200 --> 00:11:29.299 tell you that you can go back to two and a half three years ago. 135 00:11:30.299 --> 00:11:37.500 cdk was. hacked and all of a sudden cdks 136 00:11:37.500 --> 00:11:41.600 what is a company that offers these computer systems primarily 137 00:11:41.600 --> 00:11:45.700 to auto dealers about 40% of dealers and so when they were 138 00:11:45.700 --> 00:11:50.899 hacked in their systems went down. about 40 per-cent of automotive 139 00:11:50.899 --> 00:11:55.299 dealers in the country had to revert to paper contracts and 140 00:11:55.299 --> 00:11:58.600 handwriting ever think and figuring out what customers out 141 00:11:58.600 --> 00:12:02.600 damn and where Parts order work and a lot of dealers were down for 142 00:12:02.600 --> 00:12:07.700 three or four weeks and you know she DK has been hit by the federal 143 00:12:07.700 --> 00:12:11.899 government with fines and things like that but what was not 144 00:12:11.899 --> 00:12:17.100 expected but what is continuing to happen today is that dealers are 145 00:12:17.100 --> 00:12:23.100 being sued for that hack and and the argument is that you was a 146 00:12:23.100 --> 00:12:27.200 dealer goes to do business with this company you didn't do very 147 00:12:27.200 --> 00:12:34.399 good due diligence and so super primarily with us it's kind of 148 00:12:34.399 --> 00:12:38.500 class action lawsuits but it can also be individuals if they want 149 00:12:38.500 --> 00:12:42.700 you are saying that you and trusted my personal data with this 150 00:12:42.700 --> 00:12:47.200 company they had a breach and so now I'm going to sue you for. 151 00:12:48.100 --> 00:12:51.399 and in some cases lots of money because you made a bad decision 152 00:12:51.399 --> 00:13:00.299 and so we as dealers have very little understanding about who has 153 00:13:00.299 --> 00:13:05.299 access to what in these relationships and how that data is 154 00:13:05.299 --> 00:13:12.899 being taken care of and suffix for instance you have a dealership say 155 00:13:12.899 --> 00:13:18.600 you grant permission for the OEM 22 have the information that you 156 00:13:18.600 --> 00:13:22.799 have in terms of sales at sewing and then if the OEM gets hacked. 157 00:13:23.799 --> 00:13:28.600 you're potentially liable for the leak via do n guess. 158 00:13:30.200 --> 00:13:31.899 this is not a good business to be in. 159 00:13:33.899 --> 00:13:39.899 this is the problem not hear that that if you were if you were 160 00:13:39.899 --> 00:13:43.100 issued a motorcycle dealer you've only got a couple of Brands and 161 00:13:43.100 --> 00:13:45.700 you have to get along with that OEM because they can make your 162 00:13:45.700 --> 00:13:49.500 life a living hell I would think they could give they could he not 163 00:13:49.500 --> 00:13:52.799 enough players could send all that said UTV's or whatever you call 164 00:13:52.799 --> 00:13:55.500 this thing side by sides to a dealer in Manhattan or something 165 00:13:55.500 --> 00:14:00.200 where you know you're not going to sell a lot of I mean it's a very 166 00:14:00.200 --> 00:14:02.799 precarious relationship it's a bit like getting along with your ex 167 00:14:02.799 --> 00:14:03.600 wife I would think. 168 00:14:05.799 --> 00:14:06.399 the. 169 00:14:08.500 --> 00:14:12.299 did the rules that govern what you're talkin about vary by state 170 00:14:12.299 --> 00:14:17.700 and so you know there are some states where dealers maintain 171 00:14:17.700 --> 00:14:22.600 pretty significant control in the relationship there are states 172 00:14:22.600 --> 00:14:26.500 where dealers have almost no control and in fact you being up 173 00:14:26.500 --> 00:14:32.000 in Canada I mean you have no franchise Los up there if a dealer 174 00:14:32.000 --> 00:14:36.600 at a manufacturer get sideways manufacturer can just go you know 175 00:14:36.600 --> 00:14:40.200 what I must set up another dealer mile down the road and there's 176 00:14:40.200 --> 00:14:45.899 nothing that you can do about that really is typically not a problem 177 00:14:45.899 --> 00:14:48.500 here in the states again it varies a little bit and I'm from 178 00:14:48.500 --> 00:14:53.100 state-to-state but some states have pre pretty good Protections 179 00:14:53.100 --> 00:14:57.600 in place to limit those kind of actions because as a dealer we've 180 00:14:57.600 --> 00:15:02.500 invested a lot in building a brand in the marketplace and supporting 181 00:15:02.500 --> 00:15:06.299 those customers stock in those parts I am so there are some 182 00:15:06.299 --> 00:15:08.299 protections that exist but but again it. 183 00:15:08.500 --> 00:15:13.899 varies across the country but you know I think one of the best 184 00:15:13.899 --> 00:15:18.399 things that dealers ultimately can do is to have multiple Brands 185 00:15:18.399 --> 00:15:23.899 because there comes a point and and we are there with one of our 186 00:15:23.899 --> 00:15:27.100 vendors right now where we just kind of had to put them in time 187 00:15:27.100 --> 00:15:31.799 out and say you're not being a good partner you're you're acting 188 00:15:31.799 --> 00:15:36.200 like a vendor and so we're just going to put you over here in the 189 00:15:36.200 --> 00:15:40.399 corner and we're not going to tutor customers from buying your 190 00:15:40.399 --> 00:15:44.399 product but we're also not going to put you front and center and 191 00:15:44.399 --> 00:15:49.799 when when you would like to re-enter the marriage and not 192 00:15:49.799 --> 00:15:55.299 being ex-wife then you know we'll start doing some things that are 193 00:15:55.299 --> 00:16:01.299 going to work good for both of us but we can do that because we had 194 00:16:01.299 --> 00:16:06.700 Alternatives and if you wore. if you're a single line dealer if 195 00:16:06.700 --> 00:16:12.299 you only got one brand you have given up a lot of power there's 196 00:16:12.299 --> 00:16:15.600 much about the automotive in motorcycle pricing business that 197 00:16:15.600 --> 00:16:19.100 did I has always preferred perplexed me so say if I go around 198 00:16:19.100 --> 00:16:24.100 the corner to the gas station. and I want to get a pack of sir. 199 00:16:25.000 --> 00:16:29.399 Lucky Strikes. I don't have to pay for them to 200 00:16:29.399 --> 00:16:34.000 put the cigarettes on the shelf or to prep the cigarettes for sale 201 00:16:34.000 --> 00:16:39.700 there's a price I pay the price how much profit the dealer makes 202 00:16:39.700 --> 00:16:43.600 the retailer isn't isn't concerned about how much it cost to ship it 203 00:16:43.600 --> 00:16:48.500 from from Big tobacco doesn't really concern me because I'm just 204 00:16:48.500 --> 00:16:53.000 interested in the final price and it reminds me of something years 205 00:16:53.000 --> 00:16:56.100 ago and I'm kind of ashamed to admit but I did buy a Saturn car 206 00:16:56.100 --> 00:17:00.899 once my brother work for GM got a good discount you know the cars of 207 00:17:00.899 --> 00:17:05.000 the plastic body remember them it was all it was a one price here's 208 00:17:05.000 --> 00:17:09.000 the price no to go zactly they were they were they were a typical 209 00:17:09.000 --> 00:17:13.500 low-quality GM product Lisa's time James weren't so great but they 210 00:17:13.500 --> 00:17:16.500 had the price that's pricing system there was a price like 211 00:17:16.500 --> 00:17:19.799 buying anything else and I remember reading a survey about 212 00:17:19.799 --> 00:17:23.299 this in a lot of women bought Saturn's because they didn't want 213 00:17:23.299 --> 00:17:27.099 to go into a dealership and have to hack all about and I don't know 214 00:17:27.099 --> 00:17:29.099 but. my wife is not a hacker she'll 215 00:17:29.099 --> 00:17:32.099 just turn around walk out she does not want to negotiate I kind of 216 00:17:32.099 --> 00:17:39.000 enjoy negotiating I think it's fun but but further to that now that 217 00:17:39.000 --> 00:17:43.099 we're talking about this. this whole notion of you go to a 218 00:17:43.099 --> 00:17:45.400 motorcycle in this is kind of what we're talking about today 219 00:17:45.400 --> 00:17:51.099 motorcycle website and its 16499 and then you go into a dealership 220 00:17:51.099 --> 00:17:53.900 and of course that's not the price because there are these add-ons 221 00:17:53.900 --> 00:17:56.200 there's preparation there's all these other things that need to be 222 00:17:56.200 --> 00:17:59.799 done to a bike and then of course you're taxed on top of that like 223 00:17:59.799 --> 00:18:03.700 any other products are the taxes in the issue why is there this 224 00:18:03.700 --> 00:18:08.099 absurd disconnecting this is what your white papers about and ptas 225 00:18:08.099 --> 00:18:14.799 white paper why isn't the price on the website for the OEM why isn't 226 00:18:14.799 --> 00:18:16.400 that the price that we seen the dealership. 227 00:18:17.900 --> 00:18:23.200 and you know I'll. I'll be you know very honest to 228 00:18:23.200 --> 00:18:29.299 come out and say this you know I don't like the process and you 229 00:18:29.299 --> 00:18:33.799 know we've done a survey of dealers and 90% of dealers don't 230 00:18:33.799 --> 00:18:39.099 like the process but I'll like I'll explain how we got where 231 00:18:39.099 --> 00:18:45.200 we're at please. if you go back and then I get a 232 00:18:45.200 --> 00:18:48.200 little bit of research for this and I looked up a few things just 233 00:18:48.200 --> 00:18:52.299 to make sure that I was in line you do you keep go back 20 years. 234 00:18:52.900 --> 00:18:59.299 most of the. price sheets that ordered the 235 00:18:59.299 --> 00:19:02.900 price list that we got for a manufacturer you know what have 236 00:19:02.900 --> 00:19:08.799 here's your dealer invoice price you would get a small credit 237 00:19:08.799 --> 00:19:14.500 prepping the vehicle for sale. you would have a freight cost that 238 00:19:14.500 --> 00:19:18.400 was on there and then you would kind of get here's the price of 239 00:19:18.400 --> 00:19:22.400 we're going to bill you when we send you that vehicle and here's 240 00:19:22.400 --> 00:19:28.500 the retail price. and you know for a long time the 241 00:19:28.500 --> 00:19:33.400 the amount of time that it took to prep a vehicle to get it ready and 242 00:19:33.400 --> 00:19:39.299 the cost of Labor back 20 years ago was a lot cheaper and wasn't 243 00:19:39.299 --> 00:19:45.700 that big of a number and the freight cost really wasn't that 244 00:19:45.700 --> 00:19:51.099 big of an issue I mean 20 years ago dealers were sometimes paying 245 00:19:51.099 --> 00:19:59.400 200 bucks to get a full size motorcycle shift into and so you 246 00:19:59.400 --> 00:20:04.799 know for a long time. the price was the price MSRP was 247 00:20:04.799 --> 00:20:08.700 was what the vehicle sold for and those other cos we're kind of 248 00:20:08.700 --> 00:20:13.900 absorbed by the dealer. there came to be a point I would 249 00:20:13.900 --> 00:20:23.299 say probably in the mid-90s where. the freight charge the can to be a 250 00:20:23.299 --> 00:20:25.799 number that can no longer be ignored. 251 00:20:26.900 --> 00:20:34.000 and so we went through this. Of time where dealer started 2% that 252 00:20:34.000 --> 00:20:39.700 trade cost of the customer and go here's the selling price and 253 00:20:39.700 --> 00:20:44.400 here's the freight charge and you can look at the price you too it 254 00:20:44.400 --> 00:20:50.400 was never it was never designed it was never intended for the freight 255 00:20:50.400 --> 00:20:54.299 cost to be something that you are sort of sore and you can go and 256 00:20:54.299 --> 00:20:58.299 look at most manufacturers websites today they say here 257 00:20:58.299 --> 00:21:02.500 selling price here's a freight charge and in tiny subscript below 258 00:21:02.500 --> 00:21:09.200 that it wasn't a cost that was designed for dealers to eat. 259 00:21:10.099 --> 00:21:14.799 and there was that transition from probably the mid-nineties to the 260 00:21:14.799 --> 00:21:20.299 mid-2000s where the majority of dealers started putting that 261 00:21:20.299 --> 00:21:24.299 number in front of customers and saying here's an additional cost 262 00:21:24.299 --> 00:21:28.200 that you got to pay and you know the automotive industry got this 263 00:21:28.200 --> 00:21:32.599 figured out a long time ago in the Maroni days and now you know when 264 00:21:32.599 --> 00:21:36.599 you look at the sticker on my car it's got all of the features that 265 00:21:36.599 --> 00:21:41.299 you're paying for its got Freight and then there's the MSRP and so 266 00:21:41.299 --> 00:21:46.200 we know it can be done and I had an interesting conversation with 267 00:21:46.200 --> 00:21:51.000 an oem the other day you said we're we're interested in looking 268 00:21:51.000 --> 00:21:54.599 at this but we don't want to be the first and I said perfect 269 00:21:54.599 --> 00:22:00.000 you're not the first because BMW RT does this and BMW has been 270 00:22:00.000 --> 00:22:04.099 doing this for a long time so congratulations we got that hurdle 271 00:22:04.099 --> 00:22:09.500 out of the way so we clarify so if I go to BMW motorrad website. 272 00:22:10.700 --> 00:22:17.900 ended up the price on that bike is the price on the dealer floor so a 273 00:22:17.900 --> 00:22:24.000 few Exceptions there but to explain what BMW does is that the 274 00:22:24.000 --> 00:22:31.000 MSRP includes afraid charge and those bikes come in a crate there 275 00:22:31.000 --> 00:22:34.500 in some of them is a pretty considerable amount of time to 276 00:22:34.500 --> 00:22:38.599 assemble them to get it ready to put gas to toss the great the 277 00:22:38.599 --> 00:22:41.500 dealer submits a warranty claim through through the warranty 278 00:22:41.500 --> 00:22:44.799 system is not really a warranty claim but that's the easiest and 279 00:22:44.799 --> 00:22:49.500 clean cleanest way to do it and BMW reimburses the dealer for the 280 00:22:49.500 --> 00:22:52.599 cost of a building and setting that bike up and making it ready 281 00:22:52.599 --> 00:22:57.299 for sale and they are in the Power Sports World they are the only one 282 00:22:57.299 --> 00:23:00.400 who does that who reimburses the dealer for putting it together. 283 00:23:01.400 --> 00:23:05.799 yes. why would they just charge less it 284 00:23:05.799 --> 00:23:09.200 seems isn't it kind of just you know if it's if you have to as the 285 00:23:09.200 --> 00:23:14.400 dealer then then claim that money back and it wouldn't wouldn't have 286 00:23:14.400 --> 00:23:17.099 just been who BMW or any other brand just to charge him a little 287 00:23:17.099 --> 00:23:17.400 lesson. 288 00:23:19.700 --> 00:23:24.799 there's a too straightforward I think you know what's up you 289 00:23:24.799 --> 00:23:28.500 probably kind of 30 minutes into the future of this conversation so 290 00:23:28.500 --> 00:23:39.700 so let's go back to where we were in 2005 so now we got the vehicle 291 00:23:39.700 --> 00:23:43.000 to a customer and then saying okay you've got the straight charge 292 00:23:43.000 --> 00:23:52.000 well now we kind of get into a 2005 to where we're at today and. 293 00:23:53.200 --> 00:23:59.799 technicians are in a lot of cases tough for dealers to find there's 294 00:23:59.799 --> 00:24:06.099 a lot of cost to train text to hire trained technicians and the 295 00:24:06.099 --> 00:24:10.000 vehicles that we need to assemble and build are a lot more complex 296 00:24:10.000 --> 00:24:12.900 than they were back in the day back when I started doing this in 297 00:24:12.900 --> 00:24:17.400 1993 I didn't really have any training whatsoever but I could 298 00:24:17.400 --> 00:24:24.099 take the little 10-page manual and assemble a Virago 750 dating 299 00:24:24.099 --> 00:24:30.700 myself here or an fzr 600 and you know it was pretty easy it was 300 00:24:30.700 --> 00:24:38.599 something that I could do I don't think today that I could assemble 301 00:24:38.599 --> 00:24:45.799 a lot of the vehicles that we as a dealership sell because there are 302 00:24:45.799 --> 00:24:49.500 two complexes too much that goes into it and I just don't think I 303 00:24:49.500 --> 00:24:53.200 would do a very good job I did I miss something and and put it down. 304 00:24:53.200 --> 00:25:00.000 and we've also got the liability situation that that starts to 305 00:25:00.000 --> 00:25:06.799 arise too many too many attorneys and too many people for money I 306 00:25:06.799 --> 00:25:13.400 told you I was really need to have a paper trail that exists about 307 00:25:13.400 --> 00:25:19.400 yes this vehicle came in and we had a train tack you put it 308 00:25:19.400 --> 00:25:22.500 together we've got the documentation on the paperwork 309 00:25:22.500 --> 00:25:27.000 that shows that we did this the way that the manufacturer has to 310 00:25:27.000 --> 00:25:36.700 do it and so as that cost started to increase for dealers that came 311 00:25:36.700 --> 00:25:41.099 to be this point probably in the mid-2000s where dealers. Only 312 00:25:41.099 --> 00:25:44.799 started to go well we've got this freight charge that. 313 00:25:46.000 --> 00:25:52.299 is additional on the price but now we got to set up cost and you know 314 00:25:52.299 --> 00:25:55.700 that there are still some dealers in the country. 315 00:25:56.799 --> 00:26:01.099 you don't have trained technicians putting their vehicles together 316 00:26:01.099 --> 00:26:08.000 they still got a kid making 22 bucks an hour is assembling those 317 00:26:08.000 --> 00:26:12.599 Vehicles they're absorbing that cost in a different way in the 318 00:26:12.599 --> 00:26:16.799 dealership and they're just not passing that on to the consumer 319 00:26:16.799 --> 00:26:23.500 it's still a cost of the dealer but it's accounted for in a 320 00:26:23.500 --> 00:26:27.000 different way in that dealer's financials. 321 00:26:27.799 --> 00:26:32.400 so how do we get from where we were to where we are that's that's 322 00:26:32.400 --> 00:26:39.000 kind of the story on how we got you a MSRP hairspray and here set 323 00:26:39.000 --> 00:26:44.400 up and here's a lot of customers who really don't like that process 324 00:26:44.400 --> 00:26:47.700 and and to be honest a lot of dealers who really don't like that 325 00:26:47.700 --> 00:26:53.900 process either but you know I I went and looked up 10 years ago I 326 00:26:53.900 --> 00:26:58.200 didn't pop my sheet up but you know Adventure Rider let's talk 327 00:26:58.200 --> 00:27:04.299 about the o.g. adventure bike the KLR650 you know 10 years ago a 328 00:27:04.299 --> 00:27:11.900 KLR650 cost me I think it was $375 or $350 to get shipped from Japan 329 00:27:11.900 --> 00:27:20.599 to my dealership today 2020 2026 what year when it was $675. 330 00:27:21.799 --> 00:27:26.000 that's an additional cost that's added on to my invoice and it's 331 00:27:26.000 --> 00:27:31.700 it's a number that today is too big to ignore and and your cat 332 00:27:31.700 --> 00:27:37.400 participating in your podcast mine today today's adventure Rider 333 00:27:37.400 --> 00:27:40.900 podcast it's brought to you by Green he's so made from all the 334 00:27:40.900 --> 00:27:45.000 stuff that Youmans will not consume to go through this process 335 00:27:45.000 --> 00:27:48.700 of explaining how it works and it's it's no longer as you said a 336 00:27:48.700 --> 00:27:52.400 $22 kid making 22 bucks an hour putting this place together it's 337 00:27:52.400 --> 00:27:57.900 more complex in shipping costs have gone up exponentially I don't 338 00:27:57.900 --> 00:28:03.000 think anybody debates that but it's still what what confuses me 339 00:28:03.000 --> 00:28:07.500 is why are these blown out as separate items to a consumer 340 00:28:07.500 --> 00:28:09.700 because any other product that you buy. 341 00:28:10.500 --> 00:28:14.200 you know what I said earlier you go in their surprise why don't do 342 00:28:14.200 --> 00:28:17.900 EMS and dealers get together work this out. 343 00:28:19.299 --> 00:28:22.299 you know whatever it whatever they have to come to this until we 344 00:28:22.299 --> 00:28:25.000 understand that things have to be shipped in the there's a there's a 345 00:28:25.000 --> 00:28:29.099 fee and the Motorcycle needs to be assembled and tested and fuel put 346 00:28:29.099 --> 00:28:34.000 it in in the Box disposed of all stuff that takes time to me it 347 00:28:34.000 --> 00:28:38.299 seems like the most ridiculous Antiquated system to put these a 348 00:28:38.299 --> 00:28:43.000 separate cost because it's the weiner there any other products 349 00:28:43.000 --> 00:28:46.400 that you buy. where these things are blown out 350 00:28:46.400 --> 00:28:49.799 and getting it out as SM Acosta put something on a shelf or to 351 00:28:49.799 --> 00:28:52.799 assemble it and it cost to ship it like this just give us the price 352 00:28:52.799 --> 00:28:56.099 that we in price that they stayed we don't need to know what a 353 00:28:56.099 --> 00:29:00.500 dealer pays for it we don't care just what do we pay for why is the 354 00:29:00.500 --> 00:29:04.299 system it seems so ridiculous and yet nobody seems to want to 355 00:29:04.299 --> 00:29:08.500 acknowledge that is ridiculous. I think there's there's two 356 00:29:08.500 --> 00:29:16.799 answers to question. and the first that the oems don't 357 00:29:16.799 --> 00:29:25.200 want you to know or want you to think about is that the afraid has 358 00:29:25.200 --> 00:29:31.400 become what I referred to as a Stealth price increase and this 359 00:29:31.400 --> 00:29:38.900 really came out of the pandemic when we saw just an exponential 360 00:29:38.900 --> 00:29:45.099 increase in speed and which that freight charge started going up 361 00:29:45.099 --> 00:29:52.099 and you know in some cases during 2001-2002 we had vendors that 362 00:29:52.099 --> 00:29:55.299 raise their Freight charges three or four times during the end of it 363 00:29:55.299 --> 00:29:59.099 and just like when were the mothers and where those are 364 00:29:59.099 --> 00:30:01.400 legitimate increases were those just a way to get more money 365 00:30:01.400 --> 00:30:07.700 you'll have to based on what I'm about to tell you make that 366 00:30:07.700 --> 00:30:15.299 decision for yourself. you know if you go back to the 367 00:30:15.299 --> 00:30:20.700 original gas prices that we had not the one in 1985 but the one 368 00:30:20.700 --> 00:30:29.799 that happened in you know time when was it 2009 2010, during the 369 00:30:29.799 --> 00:30:35.599 Great Recession we also had a large price increase in gas and if 370 00:30:35.599 --> 00:30:40.599 you remember at that point in time UPS and FedEx added fuel 371 00:30:40.599 --> 00:30:47.099 surcharges. and even when gas prices in a 372 00:30:47.099 --> 00:30:52.500 period of time and I forget what year it was in that the 15 got 373 00:30:52.500 --> 00:30:58.900 down to about 20 or 30 a gallon we still paid that fuel surcharge on 374 00:30:58.900 --> 00:31:03.799 every item that we had that UPS and FedEx ship once those charges, 375 00:31:03.799 --> 00:31:10.700 they never go away we never ever ever seen these prices drop and so 376 00:31:10.700 --> 00:31:14.900 they increased during the pandemic there where they're at and in fact 377 00:31:14.900 --> 00:31:20.099 you know even as if you look at teu container shipments across 378 00:31:20.099 --> 00:31:25.799 across the world from China and Japan I mean yeah they're up a 379 00:31:25.799 --> 00:31:29.099 little bit today because of the little Skirmish that's going on in 380 00:31:29.099 --> 00:31:32.799 Iran star favorite Straits of Hormuz Strait. 381 00:31:34.900 --> 00:31:39.200 you know they they will they will they will come back down because 382 00:31:39.200 --> 00:31:42.299 there's a lot of competition for global Shipping with merskin all 383 00:31:42.299 --> 00:31:49.200 these other companies but you know when after the Pandemic those cost 384 00:31:49.200 --> 00:31:52.799 came back down to where they had historically been in fact they 385 00:31:52.799 --> 00:31:56.099 dropped a little bit longer then we didn't see a reduction in 386 00:31:56.099 --> 00:32:00.500 break-ups and you know Freight is not just Freight there's also the 387 00:32:00.500 --> 00:32:03.900 human equation that goes into that there's people cost and there's 388 00:32:03.900 --> 00:32:07.200 insurance and there's all these other things so we call it Freight 389 00:32:07.200 --> 00:32:09.900 it's a consolidation of a lot of different cost. 390 00:32:10.700 --> 00:32:19.000 but it didn't come back down and so do I think that without some of 391 00:32:19.000 --> 00:32:22.000 the things that were working on today are these cost ever going to 392 00:32:22.000 --> 00:32:27.200 come back down probably not and so I go back to my my statement about 393 00:32:27.200 --> 00:32:33.200 being these being a Stealth price increase is that the market for 394 00:32:33.200 --> 00:32:39.900 selling products is competitive. and every manufacturer has an MSRP 395 00:32:39.900 --> 00:32:42.900 listed on their website and then below that most of them have a 396 00:32:42.900 --> 00:32:48.500 small Plus freight and get them tighty subscript and I think a lot 397 00:32:48.500 --> 00:32:53.400 of the manufacturers know that Freight is something that a lot of 398 00:32:53.400 --> 00:32:57.200 bitters because shit on out now we down whatever we're charge that's 399 00:32:57.200 --> 00:33:00.099 what we charge the customer it's different across the country and 400 00:33:00.099 --> 00:33:03.799 we can talk about that later if we have time but they know that a lot 401 00:33:03.799 --> 00:33:07.500 of dealers negotiate on that number and they are still has very 402 00:33:07.500 --> 00:33:13.000 small number of dealers who just suck it up and absorb it I don't 403 00:33:13.000 --> 00:33:16.400 know financially how how that really make sense but there are 404 00:33:16.400 --> 00:33:17.799 small number of dealers who do that. 405 00:33:19.200 --> 00:33:25.599 and so the manufacturers have had the ability to say wow we want our 406 00:33:25.599 --> 00:33:29.000 MSRP to be competitive in the marketplace we need to make more 407 00:33:29.000 --> 00:33:32.799 money on the products were selling so will increase the freight 408 00:33:32.799 --> 00:33:37.200 charge knowing that the dealer is going to absorb some of that so 409 00:33:37.200 --> 00:33:42.599 that's where we're at day with these Freight charges continuing 410 00:33:42.599 --> 00:33:46.799 to increase you know just like visa and MasterCard when Wendy's 411 00:33:46.799 --> 00:33:50.000 or Mastercard are like okay or stock holders are getting a little 412 00:33:50.000 --> 00:33:52.799 bit nervous I need to make a little bit more money and they 413 00:33:52.799 --> 00:33:56.299 just turn up the Interchange to a little back now they're making 414 00:33:56.299 --> 00:34:00.299 another 45 billion dollars a year on a fractional percentage 415 00:34:00.299 --> 00:34:04.200 increase on what they build the others to accept credit cards and 416 00:34:04.200 --> 00:34:07.500 that's where we're at with these Freight charges now so it's it's 417 00:34:07.500 --> 00:34:11.800 it's kind of Freight in quotation marks it's not just it's not just 418 00:34:11.800 --> 00:34:15.400 it cuz I've always thought afraid is just a simple number but. 419 00:34:15.900 --> 00:34:18.500 but it's a number that's used by either side. 420 00:34:19.800 --> 00:34:25.199 how much does a negotiating tactic it can be yes yes so it's so it's 421 00:34:25.199 --> 00:34:28.500 so it's not that simple but but again back to my question and try 422 00:34:28.500 --> 00:34:32.900 to keep hammering away in this morning I want to get it out there 423 00:34:32.900 --> 00:34:35.599 because they're there is a solution and that I think 424 00:34:35.599 --> 00:34:39.800 everybody wins on okay so I'll let you get to that in a second but 425 00:34:39.800 --> 00:34:44.099 what motorcycles are large and it's expensive to ship it was a 426 00:34:44.099 --> 00:34:47.099 refrigerator. but does a refrigerator doesn't 427 00:34:47.099 --> 00:34:50.099 have a separate shipping cost and maybe this a question that's 428 00:34:50.099 --> 00:34:55.099 that's impossible to answer but why is it that Vehicles do this 429 00:34:55.099 --> 00:34:59.400 now I know they're large and why isn't the other household products 430 00:34:59.400 --> 00:35:03.699 for instance fridge how come they never got how come that the 431 00:35:03.699 --> 00:35:07.800 shipping never became something that that that was a point of 432 00:35:07.800 --> 00:35:10.400 negotiation between a manufacturer in a cellar. 433 00:35:11.400 --> 00:35:15.300 I think because you had way more competition you had you know a lot 434 00:35:15.300 --> 00:35:21.500 of not only companies who played in that sandbox but you also had a 435 00:35:21.500 --> 00:35:28.099 lot of Manufacturers who were building products and you know any 436 00:35:28.099 --> 00:35:34.599 and you know those products got down to you know a a very 437 00:35:34.599 --> 00:35:41.000 competitive position and you know the other issue that we have in in 438 00:35:41.000 --> 00:35:47.000 Powersports in in the reason that were where we're at today is 439 00:35:47.000 --> 00:35:52.400 because what I said earlier you know the manufacturers are gone 440 00:35:52.400 --> 00:36:00.099 but we don't want to be first. and nobody wants to do this and 441 00:36:00.099 --> 00:36:03.400 all of a sudden they're there there's going to be two pain 442 00:36:03.400 --> 00:36:07.699 points for the manufacture one if they were the only one to do it 443 00:36:07.699 --> 00:36:15.000 and include Freight and include a setup reimbursement in MSRP MSRP 444 00:36:15.000 --> 00:36:21.199 is going to go up there there there's no debating that as the 445 00:36:21.199 --> 00:36:25.400 simple fact that BMW for instance as much as the only one she said 446 00:36:25.400 --> 00:36:28.900 the simple fact that they're including that it is going to 447 00:36:28.900 --> 00:36:32.800 raise the price. well with them. You it's not 448 00:36:32.800 --> 00:36:37.599 because they're already there. but if I think I misunderstood you 449 00:36:37.599 --> 00:36:43.900 sorry if you think about it you know today if you going to look at 450 00:36:43.900 --> 00:36:49.000 a Kawasaki on their website and let's say that you're looking at 451 00:36:49.000 --> 00:36:54.400 one that's got an 87 99 retail price + 675 48. 452 00:36:55.300 --> 00:37:00.199 your new MSRP but actually is going to be 9 sorry I 453 00:37:00.199 --> 00:37:02.800 misunderstood I thought just to buy including that they were going 454 00:37:02.800 --> 00:37:05.400 to add another little cushion in there just to make a little money 455 00:37:05.400 --> 00:37:12.699 personally what I think if we can move the industry in the direction 456 00:37:12.699 --> 00:37:15.900 we want to move the industry is that I think that the 457 00:37:15.900 --> 00:37:20.800 manufacturers are possibly because it's going to be more competition 458 00:37:20.800 --> 00:37:25.000 are going to have to take that cushion out of the fridge cost I 459 00:37:25.000 --> 00:37:28.400 actually think the thankfully we could reduce these prices a little 460 00:37:28.400 --> 00:37:32.300 bit because now that ability for the manufacture stop this Stealth 461 00:37:32.300 --> 00:37:38.199 price increase has gone away and so you know what we really want. 462 00:37:38.900 --> 00:37:43.599 is we want all the manufacturers and their this is this is this is 463 00:37:43.599 --> 00:37:51.300 the white paper you're talking about now what we have proposed is 464 00:37:51.300 --> 00:37:58.800 that for the 2027 model year is that every manufacturer move to an 465 00:37:58.800 --> 00:38:05.400 inclusive MSRP and that MSRP has got Freight built into it it's got 466 00:38:05.400 --> 00:38:11.000 a set up or PTI or Bill reimbursement for the dealer built 467 00:38:11.000 --> 00:38:15.000 into it. and we just get everybody to that 468 00:38:15.000 --> 00:38:21.699 point then so now when you are as a consumer are going and looking 469 00:38:21.699 --> 00:38:29.099 online and you want to buy a vehicle you are comparing MSRP 470 00:38:29.099 --> 00:38:33.400 between 10 or 20 dealers and you're seeing the number that 471 00:38:33.400 --> 00:38:36.199 you're actually going to pay and you know I give you a great 472 00:38:36.199 --> 00:38:41.599 example of pissed off that it happened this way but you know I 473 00:38:41.599 --> 00:38:44.400 had good friend of mine bought a bunch of vehicles around me but 474 00:38:44.400 --> 00:38:48.599 this is 5 or 6 years ago is son graduates from college wants to 475 00:38:48.599 --> 00:38:50.599 buy me a new bike he wants to buy him an R1. 476 00:38:51.699 --> 00:38:56.199 until he called me up and said you know we saw his bike and I sit 477 00:38:56.199 --> 00:38:59.699 here and I'll make you a good deal on it so I made him made him a 478 00:38:59.699 --> 00:39:03.000 good good offer and a couple days later. 479 00:39:03.900 --> 00:39:09.599 he calls me back or send me a text and he goes am I really get a good 480 00:39:09.599 --> 00:39:15.000 deal because the dealer to the north of You by 60 miles is 481 00:39:15.000 --> 00:39:18.400 telling me that they're going to sell me that same bike for $1,500 482 00:39:18.800 --> 00:39:22.500 cheaper. and I said I'm just going to I was 483 00:39:22.500 --> 00:39:26.199 pissed off that he shot me on the deal but not so pissed off that I 484 00:39:26.199 --> 00:39:30.300 told him to have to go after himself like I said you're not 485 00:39:30.300 --> 00:39:34.699 comparing Apples to Apples I sent I know how that the other operates 486 00:39:34.699 --> 00:39:38.199 I know how that organization operates and there's only one 487 00:39:38.199 --> 00:39:41.500 number that matters to you and I see out the door price and I said 488 00:39:41.500 --> 00:39:46.599 you're going to struggle to get it from them but push yourself person 489 00:39:46.599 --> 00:39:49.900 to give you an out-the-door price and when he finally got that 490 00:39:49.900 --> 00:39:54.699 outdoor price he was $2,000 more than I was going to sell the bike 491 00:39:54.699 --> 00:39:57.599 to him for out the door tax title license and everything included 492 00:39:57.599 --> 00:40:02.699 $1,500 cheaper on a selling price but they had massive fully 493 00:40:02.699 --> 00:40:05.699 inflated the freight charge they were going to charge him $2,500 in 494 00:40:05.699 --> 00:40:09.400 Fright for something to toss them probably that's what it's 550 box 495 00:40:09.400 --> 00:40:11.800 and they were going to charge in five or six hundred bucks and set 496 00:40:11.800 --> 00:40:20.099 up so yeah we we want to eliminate that and you will it make the in. 497 00:40:20.000 --> 00:40:25.699 yes because these games go on today and then again I'm in the 498 00:40:25.699 --> 00:40:28.800 industry I'm being honest with everybody are him I'm sure they'll 499 00:40:28.800 --> 00:40:33.099 be some nice commentary to this podcast I don't like it but as a 500 00:40:33.099 --> 00:40:40.199 dealer if I were to be the only one who was on my website to just 501 00:40:40.199 --> 00:40:45.699 say here's the single price that you're going to pay that includes 502 00:40:45.699 --> 00:40:50.199 Freight and setup and consumers are going to cycle trader or 503 00:40:50.199 --> 00:40:54.699 whatever resources they utilized to shop vehicles and we're $2,000 504 00:40:55.000 --> 00:40:58.699 more than everybody else on there selling price we're not going to 505 00:40:58.699 --> 00:41:01.300 get much business we're not going to get many at least we're not 506 00:41:01.300 --> 00:41:04.599 going to get we're not even get that customers going to come in 507 00:41:04.599 --> 00:41:06.599 and talk to us and we're going to explain to them. 508 00:41:07.900 --> 00:41:10.400 there's only one number that you need to be concerned about and 509 00:41:10.400 --> 00:41:13.000 that's the out-the-door price and yeah I know everybody else is 510 00:41:13.000 --> 00:41:16.000 advertising cheaper than us but when you're all set and done it's 511 00:41:16.000 --> 00:41:21.000 going to be more so that's where we want the industry to move to 512 00:41:21.000 --> 00:41:26.300 and the industry is is not happy with us the manufacturers are 513 00:41:26.300 --> 00:41:30.800 pushing back against it but you know as a National Organization 514 00:41:30.800 --> 00:41:37.000 with a decent representation in the industry we have some Thursday 515 00:41:37.000 --> 00:41:42.000 we've reached out to every CEO and every manufacturer and presented 516 00:41:42.000 --> 00:41:45.800 them of a piece of paper that says here's what we want here's what we 517 00:41:45.800 --> 00:41:50.199 expect and we would like to hear back from you in a week and if we 518 00:41:50.199 --> 00:41:52.800 don't we're going to start reaching out to every dealership 519 00:41:52.800 --> 00:41:56.800 in the country giving them copies of this template and saying send 520 00:41:56.800 --> 00:42:00.699 register letters to your manufacturers stating that this is 521 00:42:00.699 --> 00:42:04.500 what we is dealerships want. we heard back from five of the 522 00:42:04.500 --> 00:42:08.900 manufacturer so far so I feel I feel like we're making progress 523 00:42:08.900 --> 00:42:14.800 and you know they're there has been kind of this I think you know 524 00:42:14.800 --> 00:42:21.199 splitting splitting the cost is that the manufacturers and we 525 00:42:21.199 --> 00:42:25.800 think we're pretty open to the Sprite thing we're not too too 526 00:42:25.800 --> 00:42:30.099 inclined to do the setup reimbursement and we've 527 00:42:30.099 --> 00:42:34.000 essentially come back and said no. Doesn't get us to where we need to 528 00:42:34.000 --> 00:42:38.800 be so can you name names besides that you sent them out to have you 529 00:42:38.800 --> 00:42:44.099 well we've reached out to every manufacturer I can tell you the 530 00:42:44.099 --> 00:42:48.300 ones who have responded at this point in time we've heard back 531 00:42:48.300 --> 00:42:57.800 from Polaris return back to PRP we've heard back from Triumph have 532 00:42:57.800 --> 00:43:02.800 been three that have come back and said yeah we are willing to. 533 00:43:02.900 --> 00:43:09.099 talk and discuss this so we haven't heard back from everybody 534 00:43:09.099 --> 00:43:12.400 at this point in time and and so we'll kind of see how things play 535 00:43:12.400 --> 00:43:17.000 out there there is any industry and this gets to be a little bit 536 00:43:17.000 --> 00:43:22.300 confusing there is an organization called the micc in Canada you have 537 00:43:22.300 --> 00:43:25.699 Auto Canada which is kind of similar but operates a little bit 538 00:43:25.699 --> 00:43:29.000 differently in the US we have What's called the micu which is a 539 00:43:29.000 --> 00:43:34.800 motorcycle Industry Council the key thing about the m i c is that 540 00:43:34.800 --> 00:43:39.000 they are a manufacturer organization they do not represent 541 00:43:39.000 --> 00:43:44.000 the Dealer's the mvta represents the dealers in in the US dealers 542 00:43:44.000 --> 00:43:47.800 don't have any other representation and so the m i c e 543 00:43:47.800 --> 00:43:53.099 as a board meeting on June 8th and we doubt this topic is made it 544 00:43:53.099 --> 00:43:57.500 onto the agenda for that meeting and so I think that that's kind of 545 00:43:57.500 --> 00:44:02.599 the point in time where. we're Gator going to get back some 546 00:44:02.599 --> 00:44:06.699 positive news or we're going to get back something that says that 547 00:44:06.699 --> 00:44:12.900 they want to slow walk this wick for us is not going to be where I 548 00:44:12.900 --> 00:44:18.500 don't think we're going to accept that or they can just say now 549 00:44:18.500 --> 00:44:21.500 we're we're not going to do it you know we want to keep operating the 550 00:44:21.500 --> 00:44:25.800 way that we're operating I don't think is good for anybody hearing 551 00:44:25.800 --> 00:44:30.099 you talk about this it if it's kind of head-scratching because. 552 00:44:31.500 --> 00:44:35.099 rightly or wrongly pretty much everybody every motorcyclist and I 553 00:44:35.099 --> 00:44:38.300 know including myself you know you kind of have a dealer horror ship 554 00:44:38.300 --> 00:44:41.699 story. dealer horror at dealership or 555 00:44:41.699 --> 00:44:49.199 store and so it seems like this this whole business model you know 556 00:44:49.199 --> 00:44:51.699 between the dealers and between the oam. 557 00:44:53.400 --> 00:44:57.000 my God people do something and I know this is what you're trying to 558 00:44:57.000 --> 00:45:00.699 do I do something to help yourself can you know it's the most doing 559 00:45:00.699 --> 00:45:04.699 it to you know a dealer my God you know anything if you want a lot of 560 00:45:04.699 --> 00:45:09.300 comments and if you write for a website like ATV Rider mentioned 561 00:45:09.300 --> 00:45:13.199 something about a dealer experience and then everybody list 562 00:45:13.199 --> 00:45:18.300 all the issues that have come up including your friend who you know 563 00:45:18.300 --> 00:45:21.500 who was given the sweetheart of a price for an hour one which which 564 00:45:21.500 --> 00:45:26.500 was no sweetheart of a price at all I mean it's like they're 565 00:45:26.500 --> 00:45:30.699 screwing everybody not every dealer whatever you do and just to 566 00:45:30.699 --> 00:45:34.300 be clear but I mean there are these cases were there just do 567 00:45:34.300 --> 00:45:37.599 they not think that they will ever be a repeat customer do they not 568 00:45:37.599 --> 00:45:40.599 think that this person who I thought they were getting a great 569 00:45:40.599 --> 00:45:43.300 deal on something and I wasn't going to end up over-paying do 570 00:45:43.300 --> 00:45:46.400 they not think they're going to tell their friends this this it's 571 00:45:46.400 --> 00:45:52.000 like an immature. immature industry almost when you 572 00:45:52.000 --> 00:45:54.900 listen to it it's an Indian Motorcycles been around awhile 573 00:45:54.900 --> 00:46:00.900 like why can't this why is still operating in such an absurd way 574 00:46:00.900 --> 00:46:04.099 where it's almost like it's like snake oil salesman I mean Lisa 575 00:46:04.099 --> 00:46:08.400 like you know it's like the county fair in 1925 it'll rub this on 576 00:46:08.400 --> 00:46:11.199 your elbow it'll cure you know goat. 577 00:46:12.199 --> 00:46:15.900 it's like that's a bit of a stretch but you know like why 578 00:46:15.900 --> 00:46:22.500 can't this just be so much more simpler and direct I mean the 579 00:46:22.500 --> 00:46:26.300 customer would benefit I would think the OEM would benefit I mean 580 00:46:26.300 --> 00:46:31.400 who who who benefits from this existing program the way it is now 581 00:46:31.400 --> 00:46:35.000 it except in the most superficial way okay you make a few extra 582 00:46:35.000 --> 00:46:39.699 bucks in a bike but ultimately is it not damaging I mean it just it 583 00:46:39.699 --> 00:46:46.500 just seems absurd to me. you know am I wrong not your 584 00:46:46.500 --> 00:46:51.099 you're perfectly right I'll kind of give you you know at least a 585 00:46:51.099 --> 00:46:53.599 little bit of what I consider to be inside. 586 00:46:55.599 --> 00:47:01.199 you know you've got this situation where. 587 00:47:03.500 --> 00:47:07.800 a lot of consumers think that and I've asked a lot of people you 588 00:47:07.800 --> 00:47:10.599 know I've just just being honest when we're in certain negotiations 589 00:47:10.599 --> 00:47:16.199 on vehicles and you know let's say that I've got an ATV.. 590 00:47:18.400 --> 00:47:23.699 That retails for $8,000. and you ask a lot of consumers 591 00:47:23.699 --> 00:47:27.599 what do you think I paid for that and a lot of consumers think that 592 00:47:27.599 --> 00:47:30.800 the dealer paid $4,000 or $5,000 for that. 593 00:47:32.000 --> 00:47:38.800 the reality is that $8,000 ATV probably had a cost on it outside 594 00:47:38.800 --> 00:47:42.800 of the freight and setup of probably somewhere around 7 to 595 00:47:42.800 --> 00:47:47.000 7100 bucks. because of this Freight billing in 596 00:47:47.000 --> 00:47:51.500 the way things work I actually have products that we sell on the 597 00:47:51.500 --> 00:47:57.800 floor today that the price that I paid the manufacturer is more than 598 00:47:57.800 --> 00:48:01.800 the MSRP. and and that sounds in saying it 599 00:48:01.800 --> 00:48:07.000 but it's because you've got this margin between cost and Retail and 600 00:48:07.000 --> 00:48:10.400 then when the manufacturer ads in the freight charge that Freight 601 00:48:10.400 --> 00:48:13.800 charges more than a marsh we make a product and sound so now invoice 602 00:48:13.800 --> 00:48:17.400 ends up being more than MSRP if you don't charge the freight if 603 00:48:17.400 --> 00:48:21.000 you don't start setup you would lose money on that sell I mean you 604 00:48:21.000 --> 00:48:25.099 know what a great example I'll probably get the dang for saying 605 00:48:25.099 --> 00:48:30.300 this but you know on a Kawasaki Ninja 500 on the price sheet that 606 00:48:30.300 --> 00:48:35.000 we have from Kawasaki. the difference between what the 607 00:48:35.000 --> 00:48:38.699 check that I write Kawasaki for that bike and MSRP is about $160 608 00:48:39.000 --> 00:48:46.400 so without getting the reimbursement of the 675 rate 609 00:48:46.400 --> 00:48:50.099 without making a little bit of money for set up to sell that bike 610 00:48:50.099 --> 00:48:53.699 and make a hundred and sixty bucks at Camp A salesperson that doesn't 611 00:48:53.699 --> 00:48:56.199 cover my insurance it doesn't cover the old guy at the store 612 00:48:56.199 --> 00:49:01.800 tell that there is I think in the industry that there is a little 613 00:49:01.800 --> 00:49:07.300 bit of a disconnect you know it's consumers and a lot of cases see 614 00:49:07.300 --> 00:49:14.599 that JCPenney has a 40% or 50% off sale they had that product made 615 00:49:14.599 --> 00:49:18.900 they bought it in there's there's no middleman in it there's not a 616 00:49:18.900 --> 00:49:22.599 lot of competition and so they can do that and then JCPenney can 617 00:49:22.599 --> 00:49:25.699 offer 50% or Target and offer 50% off on something and still make 618 00:49:25.699 --> 00:49:31.699 money on it because there's a hundred percent markup we don't 619 00:49:31.699 --> 00:49:35.099 have that show. I think there is a little bit of 620 00:49:35.099 --> 00:49:43.099 Disconnect is Major dealership problem and and I talked to the 621 00:49:43.099 --> 00:49:46.900 others about this all the time they're frustrated that this 622 00:49:46.900 --> 00:49:50.199 department is fighting with that department then why can't 623 00:49:50.199 --> 00:49:53.500 everybody just work together and I always asked him the same question 624 00:49:53.500 --> 00:50:00.599 I'm like does your pay plans do they promote Unity of the team and 625 00:50:00.599 --> 00:50:03.599 I think about it for a minute there like why I pay the 626 00:50:03.599 --> 00:50:06.599 salesperson Commission on selling the bike he doesn't care about 627 00:50:06.599 --> 00:50:11.099 parts and service I paid the technicians you know what 628 00:50:11.099 --> 00:50:14.099 Commission on the labor they do they don't care what happens in 629 00:50:14.099 --> 00:50:17.699 the rest of the store and so you've always got this combat of 630 00:50:17.699 --> 00:50:21.199 nature that exist and in most dealerships in why do dealerships 631 00:50:21.199 --> 00:50:23.800 they might have their values written down on a piece of paper 632 00:50:23.800 --> 00:50:29.199 somewhere and they say teamwork on them or they say Harmony or they 633 00:50:29.199 --> 00:50:31.000 do you know say customer experience. 634 00:50:31.699 --> 00:50:35.699 but their pay plans. promote something completely 635 00:50:35.699 --> 00:50:41.099 different from that and so you know how how to use a dealership 636 00:50:41.099 --> 00:50:49.000 you know when when that customer buys that new vehicle and they 637 00:50:49.000 --> 00:50:52.900 have an issue with it a couple of weeks down the road and they call 638 00:50:52.900 --> 00:50:56.099 their sales person up and they're pissed off and you. The 639 00:50:56.099 --> 00:50:58.199 salesperson says while you're going to have to bring it into the 640 00:50:58.199 --> 00:51:03.699 other back up a few days I'll see what I can do to keep you in but I 641 00:51:03.699 --> 00:51:06.599 don't really have any control over what goes on in the service 642 00:51:06.599 --> 00:51:12.099 department in the service department just sees that as that 643 00:51:12.099 --> 00:51:15.500 transaction that this customer has got a problem they're coming in 644 00:51:15.500 --> 00:51:18.699 with this in a lot of cases they're not thinking about if we 645 00:51:18.699 --> 00:51:21.400 do a great job at taking care of this customer that. 646 00:51:22.400 --> 00:51:28.800 he lives near another dealership but by taking care of this we are 647 00:51:28.800 --> 00:51:32.400 going to earn his business he's going to come back to us and get 648 00:51:32.400 --> 00:51:34.800 this bike service six months down the road and a year down the road 649 00:51:34.800 --> 00:51:37.699 and two years later he's going to come in and buy a new motorcycle 650 00:51:37.699 --> 00:51:40.599 because he really likes the way that we took care of him. 651 00:51:42.199 --> 00:51:47.900 love to say that we should operate like that but very few dealers 652 00:51:47.900 --> 00:51:53.099 that do you know I I get asked. not as much anymore because my 653 00:51:53.099 --> 00:51:56.699 role in the industry has changed by and I talked about service a 654 00:51:56.699 --> 00:52:00.900 lot. and dealers are like well you know 655 00:52:00.900 --> 00:52:05.699 who has a good service department and of the hundreds of dealers 656 00:52:05.699 --> 00:52:08.900 that I've worked with across the country I only know three dealers 657 00:52:08.900 --> 00:52:10.400 that have a good service department. 658 00:52:11.300 --> 00:52:18.800 and in this case good meaning just a worm or world-class in that the 659 00:52:18.800 --> 00:52:25.099 the owner and the GM spend as much or more time in service as they do 660 00:52:25.099 --> 00:52:30.900 in the sales department and 80% of owners in GM's Indiana Street came 661 00:52:30.900 --> 00:52:34.300 up through financier came up through sales they don't know they 662 00:52:34.300 --> 00:52:40.199 don't understand service and parts and they don't service and parts 663 00:52:40.199 --> 00:52:42.699 in your in in your average dealership. 664 00:52:43.699 --> 00:52:47.500 the service department generates about 6% of your total revenues 665 00:52:47.500 --> 00:52:51.599 and your parts department is somewhere between about 10 and 13% 666 00:52:51.800 --> 00:52:53.400 of total revenues so. 667 00:52:57.099 --> 00:53:01.400 new service cell I mean sales is going to be the balance outside of 668 00:53:01.400 --> 00:53:04.500 Finance so I mean you know in a lot of store sales department is 669 00:53:04.500 --> 00:53:11.900 70 75% of revenues in some cases I know some dealers their sales 670 00:53:11.900 --> 00:53:16.099 department actually generates eighty-five 86% of the total 671 00:53:16.099 --> 00:53:21.500 company revenues and so it's a lot of margin product that we sell but 672 00:53:21.500 --> 00:53:26.699 it's also the biggest dollars and so that's that's over all that's 673 00:53:26.699 --> 00:53:32.000 over all that's gross that's not a project because on that $8,000 674 00:53:32.199 --> 00:53:37.099 motorcycle making 160 it looks dramatic but you're making very 675 00:53:37.099 --> 00:53:43.000 little money. I'll lend you know across the 676 00:53:43.000 --> 00:53:46.800 country today I would say that if you're just talking about 677 00:53:46.800 --> 00:53:49.900 motorcycles and you kind of bland all the motorcycle dealers 678 00:53:49.900 --> 00:53:53.500 together I mean the profit margins on motorcycles today your average 679 00:53:53.500 --> 00:53:58.800 dealer is probably around 11 % and if so on a $10,000 motorcycle that 680 00:53:58.800 --> 00:54:03.000 dealers make him 1100 bucks probably somewhere somewhere right 681 00:54:03.000 --> 00:54:07.699 in there. butt cheek to go back to Pino kind 682 00:54:07.699 --> 00:54:12.900 of finish what I was rambling about is that you know there's 683 00:54:12.900 --> 00:54:20.800 just us three deal to have this excellent service department what 684 00:54:20.800 --> 00:54:23.400 do you think that that does for them. 685 00:54:24.400 --> 00:54:33.099 what what it actually does is there service customers are such 686 00:54:33.099 --> 00:54:39.300 so loyal and such big promoters of that operation because it's so you 687 00:54:39.300 --> 00:54:43.500 need to have a very good service experience that it drives their 688 00:54:43.500 --> 00:54:49.699 sales departments and their sales departments not only outperformed 689 00:54:49.699 --> 00:54:54.099 most of the other dealers that I know but they also make one of the 690 00:54:54.099 --> 00:54:59.900 highest new dick on margins. because they're not negotiating 691 00:54:59.900 --> 00:55:06.599 with the customer goes to them because he wants to do business 692 00:55:06.599 --> 00:55:11.900 with them it's not you know what what happens in a lot of cases you 693 00:55:11.900 --> 00:55:15.300 know you get a customer that walks in average dealership in I'm what 694 00:55:15.300 --> 00:55:17.800 is a salesperson say how we're going to take great care of you in 695 00:55:17.800 --> 00:55:20.400 service that's a lie the Google reviews. 696 00:55:21.800 --> 00:55:30.000 and and yet you know these dealers who win the sales people know that 697 00:55:30.000 --> 00:55:33.000 they've got a world-class service department that's backing them. 698 00:55:33.900 --> 00:55:38.199 they can say that with truth and honesty and is not only a 699 00:55:38.199 --> 00:55:41.800 salesperson it's saying it it's the dealers Google reviews it's 700 00:55:41.800 --> 00:55:45.699 the other customers who have bought from them and it it's just 701 00:55:45.699 --> 00:55:51.699 it's magical to see it happen but it's also like a unicorn I mean 702 00:55:51.699 --> 00:55:55.500 it's just it is very rarely do you ever ever stumble across one. 703 00:55:58.599 --> 00:56:01.599 I'm going to give you an outline for a Dealer ship model no part of 704 00:56:01.599 --> 00:56:05.699 the problem of course is that we as humans you know we see that 705 00:56:05.699 --> 00:56:11.900 9999 price and someone else is 11 to 50 and end we do not exclude 706 00:56:11.900 --> 00:56:16.900 myself we dive on the cheap price even though we know that it may 707 00:56:16.900 --> 00:56:20.199 not be the o to the door price up here's my ID for a dealership. 708 00:56:21.599 --> 00:56:25.699 prices are on the bikes the prices are fair there's there's no 709 00:56:25.699 --> 00:56:31.000 there's no she know she can are we going on you have a great service 710 00:56:31.000 --> 00:56:35.900 department you're not negotiating for every little new $25 here in 711 00:56:35.900 --> 00:56:41.500 $50 there you're making a sensible profit you're making your 11% or 712 00:56:41.500 --> 00:56:45.400 whatever you know on a bike. and you just run it like a 713 00:56:45.400 --> 00:56:50.099 straight ahead business is that going to be is that is that a 714 00:56:50.099 --> 00:56:55.000 guarantee for success or is your is your customers a guy like me 715 00:56:55.000 --> 00:56:58.099 going to see that bike on cycle trader and are we going to go out 716 00:56:58.099 --> 00:57:04.300 it's cheaper if we go to Maryland. who's going to be 6 that dealer 717 00:57:04.300 --> 00:57:09.599 going to hit it out of the park. I would say that dealer is 718 00:57:09.599 --> 00:57:11.900 probably going to have a going-out-of-business sign on 719 00:57:11.900 --> 00:57:19.300 their door pretty quickly. That's a sad reflection isn't it it is 720 00:57:19.300 --> 00:57:26.800 the reality of the country that we live in its you know not not to 721 00:57:26.800 --> 00:57:34.300 get into politics but you know the majority of the product that the 722 00:57:34.300 --> 00:57:41.000 meat is Coppa and you know this most in that I die I mean all the 723 00:57:41.000 --> 00:57:46.500 stuff comes from China and you know why why do we buy from China 724 00:57:46.500 --> 00:57:52.300 because it's cheap and even though it's chipped around the world and 725 00:57:52.300 --> 00:57:57.500 its in some cases probably made by a 11 year old kid working 18 hours 726 00:57:57.500 --> 00:58:01.900 a day. we buy it because it's cheap and 727 00:58:01.900 --> 00:58:10.199 when you talk to Americans and you ask them you know would you want 728 00:58:10.199 --> 00:58:15.099 made in America product they only say yes but there's a cabbit 729 00:58:15.099 --> 00:58:20.099 before you get there is a caveat to it and that yes but I wanted a 730 00:58:20.099 --> 00:58:26.400 Chinese pricing and when their cost of Labor is a couple of bucks 731 00:58:26.400 --> 00:58:34.500 an hour an hour cost of Labor is $28 an hour we can't make this for 732 00:58:34.500 --> 00:58:39.300 $5 I mean this is a promotional company that provides rdms you 733 00:58:39.300 --> 00:58:42.400 know this promotional top I mean they probably got these for six or 734 00:58:42.400 --> 00:58:46.099 seven bucks a piece and Graves with their logo on them this was 735 00:58:46.099 --> 00:58:51.599 made in America and engraved by Americans would be 35 bucks a 736 00:58:51.599 --> 00:58:56.000 piece Americans are not are not going to pay for that and so 737 00:58:56.000 --> 00:59:00.099 there's this big dick. that. 738 00:59:00.900 --> 00:59:04.900 I don't know how you how you square that adds already Davis's 739 00:59:04.900 --> 00:59:08.500 deal with the same problem right now is that they want to have you 740 00:59:08.500 --> 00:59:10.900 know they want to have an affordable bike they came out with 741 00:59:10.900 --> 00:59:16.900 the 507 59th Source Made in India they were cheap dealers didn't 742 00:59:16.900 --> 00:59:21.400 like them consumers didn't like them and they got discontinued 743 00:59:21.400 --> 00:59:25.400 they're going to come out with this new $6,000 motorcycle in the 744 00:59:25.400 --> 00:59:29.400 next 6 months. we've already told you I was on it 745 00:59:29.400 --> 00:59:34.099 and dealers are not behind that bike and so it'll fill up they'll 746 00:59:34.099 --> 00:59:37.500 sell a bunch initially it'll fill up their Riders School they'll 747 00:59:37.500 --> 00:59:42.000 reach out a few but it's not going to it's not going to make a 748 00:59:42.000 --> 00:59:46.300 difference to what's going on in the industry to the problem really 749 00:59:46.300 --> 00:59:51.500 is not the OEM it's not the dealership the problem is us is 750 00:59:51.500 --> 00:59:58.099 Humanity Mark no I'm just stressed its humanity is failed again 751 00:59:58.099 --> 01:00:02.199 because we we. we're so ridiculous we just won't 752 01:00:02.199 --> 01:00:05.400 accept it a dealership has to make a certain amount of profit in the 753 01:00:05.400 --> 01:00:08.199 service department has to make a certain amount of profit I mean 754 01:00:08.199 --> 01:00:10.500 there must be something ingrained with us must be from our 755 01:00:10.500 --> 01:00:15.000 hunter-gatherer days. that that we just were trying to 756 01:00:15.000 --> 01:00:17.599 get up we're trying to get a bigger or just trying to get a 757 01:00:17.599 --> 01:00:21.900 bigger hunk of meat without risking our neck getting it you 758 01:00:21.900 --> 01:00:26.300 know. give you a couple of things from 759 01:00:26.300 --> 01:00:31.199 all over and things have been distorted ever since the pandemic 760 01:00:31.199 --> 01:00:35.000 they'll they'll level back out at some point down the road. 761 01:00:36.300 --> 01:00:42.900 prior to the pandemic in 2019. the average talk in the average of 762 01:00:42.900 --> 01:00:48.500 all the 4,000 5,000 exist in the country the average Powersports 763 01:00:48.500 --> 01:00:52.800 dealership did about sixteen million dollars in revenues I 764 01:00:52.800 --> 01:00:56.500 think it was 15.6 that year I could go back and look at my notes 765 01:00:56.500 --> 01:01:02.199 16 million bucks the average Powersports dealership netted 766 01:01:02.199 --> 01:01:13.699 about 2.8% take 3% of 16500000 bucks so you got a big investment 767 01:01:13.699 --> 01:01:20.000 in property in the business and all the cost and you know you got 768 01:01:20.000 --> 01:01:23.800 a notice to owner who's taking you know a wage out of that but I'm 769 01:01:23.800 --> 01:01:27.400 not talking about the dealers who do outside undersized wakens but 770 01:01:27.400 --> 01:01:34.699 it's a lot of work for not a lot of a lot of return and a lot of 771 01:01:34.699 --> 01:01:37.800 people who are in the industry do it because they like being in the 772 01:01:37.800 --> 01:01:39.500 industry just like me you know I'm outside. 773 01:01:40.000 --> 01:01:42.400 been in this industry for more than 30 years at this point of 774 01:01:42.400 --> 01:01:47.099 time has been great to me and my wife and I are 3 cats you know I 775 01:01:47.099 --> 01:01:52.900 wouldn't getting the the opportunity to do it all again I 776 01:01:52.900 --> 01:01:57.300 would do it any differently but you know what you talk about you 777 01:01:57.300 --> 01:02:01.599 know what would this perfect dealership look like the reality 778 01:02:01.599 --> 01:02:03.900 is is that their volume would be low. 779 01:02:04.900 --> 01:02:12.599 because they probably wouldn't be able to attract the talent that 780 01:02:12.599 --> 01:02:17.400 they need on the sales floor to drive outside sales I mean that 781 01:02:17.400 --> 01:02:21.300 3.2% would be whittling away pretty quickly to nothing they 782 01:02:21.300 --> 01:02:27.599 just wouldn't survive and I don't I don't know what I mean so really 783 01:02:27.599 --> 01:02:31.300 you know everyone goes and complains you know it in the 784 01:02:31.300 --> 01:02:37.599 comments section of a dealer's but it is an animal that we we the 785 01:02:37.599 --> 01:02:45.099 citizenry perpetuate don't we I think we give outside voice to the 786 01:02:45.099 --> 01:02:50.599 people who complain and we also you know you know this as well as 787 01:02:50.599 --> 01:02:55.699 I do. that that person who is online 788 01:02:55.699 --> 01:03:00.099 talking about I'm going to do this and I'm going to do that and this 789 01:03:00.099 --> 01:03:03.400 and that and then when they're in your face or like yes or no start 790 01:03:03.400 --> 01:03:09.400 thinking right now but I think we give we give outside exposure to 791 01:03:09.400 --> 01:03:14.500 some of those individuals and the reality is you know a dealership 792 01:03:14.500 --> 01:03:21.199 we're not perfect but I can tell you that when I go back and spend 793 01:03:21.199 --> 01:03:26.300 a week there every 3 months a lot of times I'll put something on 794 01:03:26.300 --> 01:03:29.400 Facebook photo at the dealership and you say I'm back I'm glad to 795 01:03:29.400 --> 01:03:32.800 be back and I like it and out of the woodwork I have people that 796 01:03:32.800 --> 01:03:35.599 show up that just paid you know saw you're in town he's wanted to 797 01:03:35.599 --> 01:03:42.800 come by and say hi and. we've got customers who are at the 798 01:03:42.800 --> 01:03:48.699 store every week even if they're not buying anything to come and 799 01:03:48.699 --> 01:03:53.900 check out the new bikes and drink some coffee I need some fresh 800 01:03:53.900 --> 01:03:59.000 gourmet popcorn and we got our receptionist does a great job at 801 01:03:59.000 --> 01:04:02.599 making popcorn I don't know how she does it but it's really really 802 01:04:02.599 --> 01:04:08.400 good eatin way more than my fair share of it but you know we got 803 01:04:08.400 --> 01:04:14.699 lots of customers who come back and return because they like the 804 01:04:14.699 --> 01:04:18.099 environment and they like what we do and I've got lots of customers 805 01:04:18.099 --> 01:04:20.400 who have bought more than 20 vehicles from you over the years 806 01:04:20.400 --> 01:04:25.400 so have there been some customers who have had a bad experience have 807 01:04:25.400 --> 01:04:29.599 we got sideways will be all hell yeah it's we're never going to be 808 01:04:29.599 --> 01:04:32.699 perfect we're never going to make everybody happy. 809 01:04:33.400 --> 01:04:38.800 I will tell you that I have this Theory and it's called the black 810 01:04:38.800 --> 01:04:43.199 cloud customer. and I've talked to these people 811 01:04:43.199 --> 01:04:47.199 over the years and there's one guy that comes the name and or come 812 01:04:47.199 --> 01:04:49.000 comes to mind and I'm not going to use his name. 813 01:04:50.000 --> 01:04:54.099 but you don't like I talked to this guy when he bought a Yamaha 814 01:04:54.099 --> 01:04:58.500 Rhino and a year after he has the cylinder developed a crack in it 815 01:04:58.500 --> 01:05:04.099 and it was burning oil and smoking. and it was it was it was a tough 816 01:05:04.099 --> 01:05:07.000 problem for us to figure out sounds easy but it required a 817 01:05:07.000 --> 01:05:10.699 little bit of work. and his vehicles in service for 818 01:05:10.699 --> 01:05:14.599 too long and there was some Backwater situations and it took 819 01:05:14.599 --> 01:05:20.099 us awhile to get the parts and I'm talking to this guy and he starts 820 01:05:20.099 --> 01:05:23.800 telling me about all the things that have gone wrong in his life 821 01:05:23.800 --> 01:05:28.800 and the new truck that you bought two years earlier he leaves a 822 01:05:28.800 --> 01:05:31.599 dealership and he's driving down the road and A-Rod call Sue the 823 01:05:31.599 --> 01:05:37.400 bottom of the motor and I bought this house and you've been in 824 01:05:37.400 --> 01:05:42.699 there for 2 weeks and the water heater is in the ceiling where 825 01:05:42.699 --> 01:05:46.000 ever it was had busted and done a hundred thousand dollars in damage 826 01:05:46.000 --> 01:05:52.400 into letting him then on me for 30 minutes. 827 01:05:53.699 --> 01:05:58.300 I've never heard anybody that's had so many things that have gone 828 01:05:58.300 --> 01:06:03.300 wrong to one individual but I truly believe that he had it was 829 01:06:03.300 --> 01:06:06.599 like The Truman Show. I believe that he had a cloud that followed 830 01:06:06.599 --> 01:06:11.699 him around that rain and lightning and did everything they could to 831 01:06:11.699 --> 01:06:17.000 ruin his life and you know it's hopefully there's not too many 832 01:06:17.000 --> 01:06:20.099 black cloud customers out there but there's just some people that 833 01:06:20.099 --> 01:06:24.000 trouble seems to follow them around and that's unfortunate and 834 01:06:24.000 --> 01:06:26.699 we saw their fair share of vehicles over the years where 835 01:06:26.699 --> 01:06:32.699 somebody had a weird or unique problem and you know it sucks but 836 01:06:32.699 --> 01:06:38.500 it is it we're not we're not Walmart when when you buy a new 837 01:06:38.500 --> 01:06:41.900 vehicle. and you have a problem with it a 838 01:06:41.900 --> 01:06:47.599 month down the road that vehicle is titled it's registered and it's 839 01:06:47.599 --> 01:06:50.900 not that you can just bring it back and say kidney another one 840 01:06:50.900 --> 01:06:55.599 you know we have we unfortunately we have one solution to that 841 01:06:55.599 --> 01:06:59.599 problem and that is to fix it and try to do our best to you to make 842 01:06:59.599 --> 01:07:03.900 it right and that customers probably never going to be on and 843 01:07:03.900 --> 01:07:09.199 be happy with us again maybe they'll leave the the community 844 01:07:09.199 --> 01:07:11.900 and and they don't ever buy another motorcycle again or maybe 845 01:07:11.900 --> 01:07:15.300 they go down the road and they buy something from them and they talk 846 01:07:15.300 --> 01:07:20.199 bad about us was that really arguing now but could we have 847 01:07:20.199 --> 01:07:24.199 handled the situation better probably but it's the reality of 848 01:07:24.199 --> 01:07:28.099 the world we live in. work let's see let's leave it 849 01:07:28.099 --> 01:07:31.400 there we haven't solved the world's problems but time. 850 01:07:32.400 --> 01:07:35.199 you've been very gracious with your time and explaining this and 851 01:07:35.199 --> 01:07:40.000 it still baffles me I got to say but at least I understand why it 852 01:07:40.000 --> 01:07:46.000 baffles me and just to finish up so BMW is on board and I we come 853 01:07:46.000 --> 01:07:49.800 back again and tell me how what's the Shakedown is after the white 854 01:07:49.800 --> 01:07:59.000 paper has been up for a little while if you as a consumer are you 855 01:07:59.000 --> 01:08:02.800 know talking to your dealer and you don't like the way that things 856 01:08:02.800 --> 01:08:07.900 currently operate then tell your local dealer to support the nppa 857 01:08:07.900 --> 01:08:11.199 and support out white paper you can find it online you can read 858 01:08:11.199 --> 01:08:16.500 exactly what we're asking for. and help us to move the industry 859 01:08:16.500 --> 01:08:21.199 to a better place like I said earlier this truly is one of those 860 01:08:21.199 --> 01:08:27.399 few things where everybody who's involved will be a winner and I 861 01:08:27.399 --> 01:08:30.800 think the industry will be in a lot better place on the backside 862 01:08:30.800 --> 01:08:35.199 of this in the front side but it's going to require that everybody 863 01:08:35.199 --> 01:08:37.800 keep pushing in the right direction thank you again for 864 01:08:37.800 --> 01:08:41.699 listening to the lowdown radio show which I will remind you is 865 01:08:41.699 --> 01:08:43.600 presented by a TV ryder.com.