…or why I can’t “buy local.”
So, I took my motorcycle out last night for the first time in about six months. Yes the battery had been boiled dry by the charger at some point, and yes there were a few pieces sitting on the floor, but from initial inspiration to free and clear to navigate it was still under 30 minutes.
Just a few minutes into my ride, I heard a loud crack and then, on deceleration, the sound of the chain slapping against the swingarm. A quick inspection revealed that the chain slider, a piece of rubber that encases the swingarm and keeps the drive chain from rubbing against it, had disintegrated and disappeared (all the mounting hardware was present, but none of the rubber). Not shocking for a 20-year-old bike. I went home, tightened the chain a couple of notches and kept on riding.
This morning I began investigating my options for replacing the chain slider. A google search revealed no aftermarket availability, but several places now have the Honda factory parts diagrams online for perusal (everything was still microfiche when I was in the industry). The first one I located, Power Sports Pro, had a system called Parts Fish, which yielded the part for $74.49.
Some sticker shock there, I admit, but not totally out of the range of expectation. Motorcycle dealerships, like car dealerships, make all their money in parts and service. New and used vehicles barely cover their own overhead and are really just a gateway to warranty and repair work for the service departments. The parts counter is the ultimate margin-maker. I know when I managed a parts department suggested retail from Honda was double the dealership’s cost for most parts, and the dealership’s internal pricing rule was suggested retail plus 10%. For example, the last time I bought a carburetor gasket kit at retail (admittedly about 20 different gaskets, but collectively they’d all fit in a #10 envelope and not require extra postage!) I think it was about $50. A dealership pays less than $20 for it.
Anyway, forging on via Google I next located Temecula Motorsports. They offered the same part for $68.20.
The skin is a little different, but this is obviously the same parts look-up system. There must be a service provider offering a subscription parts database for dealership web sites. Anyway, slightly better price, though not significantly (they could make it up in the shipping and handling, basically). Next I found Mr. Cycles out of North Carolina.
$54.39. Now we’re talking! Though still outrageous for a 12″ piece of rubber, this is a significant savings over the first price. Again, from the same system (look, even the product index number is the same). Interestingly, Mr. Cycles is not a better deal across the board, only on big-ticket items. The next item on the list, around $3, is actually more expensive at Mr. Cycle. I could do some statistical analysis here to figure out what’s going on, but I’ll assume it’s a per-item charge mixed in with the markup and leave it at that. Another interesting thing: unlike the other dealerships, Mr. Cycles gives you the Honda SKU. With this you could call any Honda dealer in the country and order the part. I doubt you would though, and here’s why.
My next step was to attempt to “buy local.” I have a neighborhood motorcycle dealership less than two miles away, Woods Fun Center. I also have a “neighborhood” Walmart, so don’t get too sentimental just yet. The place is truly awesome, and I mean that literally, not as an affectation of respect (“like, totally awesome”). It’s a motorcycle and sportcraft dealership the size of a Home Depot. As a combination dealership of every Japanese brand, plus ATVs, plus watercraft, plus other stuff, they must have $5 million worth of inventory sitting on the sales floor at any given moment.
On the way over there I decided to be reasonable. I decided that if they came in around the middle price–$68–I’d buy on the spot (which of course means special order and wait a week). So I walked up to the parts counter, waited for the pimply, 19-year-old clerk to stop bullshitting with his frat buddies (or whatever kind of buddies they are when you’re all high school dropouts and too young to drink), and began the demeaning ritual of being that old guy with more money than sense ordering parts for a dinosaur bike that he just won’t get rid of. Remember, I was on the other side of that counter when I was 19 too. I knew plenty of me. Shudder.
Anyway, he looks up the part, and then he does that thing that doctors, mechanics and parts guys all have down to a science–that shoulder-slumping, deep sigh-accompanied, “I feel your pain, but really I’m not the cause of it” act they put on to let you down easy. In this case, I think the guy actually cursed. And then he gave me the damage: $90. Here’s another thing I know about that job: you only round the number off when you know the customer is not going to buy. If you think there’s a chance in hell, you get specific. You say $88.42 or $92.50 or whatever the book (or in this case computer) says. You try to keep the customer engaged. Except this is a motorcycle dealership, so here’s what’s really going on: you’re looking at this price on screen and it’s dealer cost marked up 100%. But the policy is, add 10%, if you’re lucky, because you can do that in your head. But at Woods it’s probably more like 15% or even 20%. So standing behind the counter, you see this already big number (I’m guessing list is somewhere around $75), and you know you’re supposed to add exactly 15%. You also know there’s no way in hell even the old guy with more money than sense is going to shell out just south of a C-note for what is essentially a rubber bushing, so you don’t even bother to do the calculation. You just say “90 bucks” and it’s over. And it was, I said thanks and left.
In a small shop, like the one I used to work in, I could have argued. I know that for a ridiculous situation like that–$70-$90 for a piece of rubber–we used to routinely cut back as far as actual retail even for a casual customer. Hell, get them to buy some chain lube and an oil filter at the same time and you’re ahead of the game. The perspective to have here–the dealership’s perspective–is that everything that happens in the parts department is pure profit. They shouldn’t let me walk out without offering me something. Because whether it’s $30 or $50 walking away, you’ve already done 90% of the work for it. Knowing the cost on this part is somewhere around $40 (because someone in North Carolina will sell it to me for under $55, remember), the thing for any parts counter guy to do, when I hedged, and definitely when I walked away, was to say, hold up, you need anything else? because I can maybe work with you on this price. It’s called sales, people. And what’s amazing to me is that even back when we could play hard ball, before the Internet, back when we knew the customer would come back eventually because there really was nowhere else to go, we didn’t play it that hard. I gave plenty of discounts (again, almost down to suggested retail). These days, on some level, Woods has to know its going to lose that over-the-counter business to the Internet. All I can figure is they don’t care.
keep austin weird.
An anonymous source informs me that dealer cost and suggested retail are around $37 and $67 respectively for this part. This means Woods Fun Center is marking up about 35% over retail, 145% over cost and achieving a 60% profit margin. You know who else makes margins like that? Mobsters and drug dealers.
My most recent parts experience (an antenna mast for my Camry) reminded me of the exact same gripes. My loss was in dealing with the same local dealership that still has the best in-stock status of any Toyo counter in Houston (Mike Calvert). I originally began shopping there due to an automatic 10% discount offered for internet purchases. Other than digging at the junkyard (which often produced zero discount relative to the functional value of the part) this was the only “deal” I could ever manage to acquire on parts. However, I’ve inferred from the message on the former deal site (http://anythingtoyota.com/) that the discount was purely based on the associated salesman – who may or may not be associated with that particular dealer anymore.
Of course, a junkyard was still the only way to steal a strut tower bar from a Lexus for installation in the Gundam Wagon!
I live in Canada, and found it the same here. The parts I needed for my bike were almost double what MR Cycles offered. Of course, now I’m just waiting for the mail to get here…
what are you guys talking about buy local.
I THINK ITS FUNNY THAT YOU SAY “ITS CALLED SALES, PEOPLE” I HAVE ONE FOR YOU, ITS CALLED RETAIL! DO YOU GO TO HEB AND TALK THE LADY AT THE REGISTER DOWN ON YOUR GALLON OF MILK? IF YOU CANT AFFORD TO PLAY THE MOTORCYCLE GAME, IM SURE SOMEONE WHO CAN WILL BUY THAT PILE FROM YOU.
I’m glad to see we finally have a representative of Wood’s Fun Center, or at least the retail motorcycle establishment, chiming in. Unfortunately it’s with something as unoriginal as “if you can’t take the heat, get out of the kitchen,” ironic since my post was primarily concerned with “playing the motorcycle game,” only better.
“Walk in the door, get screwed” may have been the name of the game in retail 20 years ago. Today we have options. Dinosaur local merchants with outrageous prices are the ones not living in reality, since anyone with an internet connection (most likely any motorcycle owner, given the relative low cost of computers compared to motorcycles) can do what I did: shop around.
This does point out a larger issue that I’ve wanted to get into in my blog, specifically that motorcycling in this country is very dysfunctional and has been for a long time. Motorcycles are less transportation than irrational hobby, and the industry does everything it can to damp the transportation angle and ratchet up the irrationality. Your gallon of milk example highlights this. If motorcycle adoption was high enough to make motorcycle parts, accessories and services a commodity like milk, you wouldn’t have a $100 rubber bushing, at least not on a low-end bike like mine. As with automobiles, you’d have a strong, directly-accessible aftermarket for products and services. And in this case we’re talking about a part that’s expected to wear out—it would definitely be available in the aftermarket.
Automobiles, by contrast, have a great aftermarket. I can tell you from personal experience that maintaining a 1992 Toyota Corolla is about 20% the cost of maintaining a 1985 Honda XL 350. For the price of that rubber bushing I can go down to AutoZone and replace the Corolla’s front brake calipers, rotors and pads. I know this sounds like hyperbole, but I actually had to perform this job and, just as an example, a brake rotor for that car was $17. At dealership prices, this is at least a $500 job (on the car or, interestingly, on the motorcycle, which remember has half as many front wheels).
The central problem is that, even in a global economy, all motorcycles are essentially limited-production models. I’m dealing with an almost-literally vintage bike, but production numbers are so low, and the mean vehicle road-mile lifetime so short, that there’s no profit motive to build a robust, comprehensive aftermarket of low-cost replacement parts even for current production models (which also tend to change more year-to-year than automobile models). The motorcycle manufacturing industry seems only too happy to maintain this niche approach, soaking the enthusiast while keeping out the casual or commuter rider. It’s an unfortunate position, however, because as motorcyclists our interests are better served by seeing more motorcycles on the road (and more motorcyclists in the voting booth), not fewer.
So, ALL CAPS, while I appreciate your right to have a “screw the little guy” attitude, I have to say that if you are actually a motorcyclist you are not looking at the big picture.
It might also be important to note that grossly overpaying has become part of the the machismo pathos of motorcycling. How else to explain the continued existence of Harley Davidson, not to mention the success of stratospherically expensive niche builders like Orange County Choppers? This might have been the real complaint of ALL CAPS above: shopping around automatically makes me a wimp and a philistine to the “real” enthusiast community.
I agree with some of “its called retail” idea. I used to be in sales and everyone wants to pay what the store pays for things. Someone has to pay the power bill (and for my college!). you can shop on the internet all day long, I am a big “shopper arounder”. Some people just prefer to to deal with a face. Part of being the “motorcyclist” is community. When I was in sales, people would come in and shop our store aginst the internet. The internet almost always wins. There are big stores that sell for almost cost with no TT&L, out of state, all day long. These are big stores that sell for these prices till all the local dealers in their area are shut down, then they go back to full price.
I am familiar with Woods’ history. It was a local private dealer that has grown to its current size. If people continue to support the Dealers that close down “mom and pop’s” shops, we will have the same sense of community as we do with the people in the Express Checkout lane at Wal-Mart.
Its not a macho thing its a social thing.
Again note: I was willing to pay suggested retail–I simply couldn’t find the part anywhere near that price.
It’s unclear to me whether you’re saying Woods Fun Center is the good guy or the bad guy here. They’re certainly not the mom and pop in this equation. It is, in fact, difficult to imagine a larger motorcycle and power sports dealership than this in the Austin market. Of course they have overhead to contend with, but it’s not my fault if they’re over-capitalized. It almost seems like you’re willing to let them off the hook because they’re so expensive (which sounds a lot like motorcyclist elitism kicking in again). They’re obviously not trying to undercut anyone, and in your book that makes them okay. But what if the only reason they’re in this position is that they’ve already put any viable competition out of business, if only by consolidating every possible franchise option under one roof? The Japanese manufacturers especially were never interested in dealing with the mom-and-pop operator–you have to have the franchise to get bikes, parts, training, etc. Woods, by buying up all the brand franchises, has effectively closed the Austin market to competition. It was the Kawasaki dealer across the street that was keeping Honda even slightly honest. When they’re all under one roof, there’s no alternative, no market pressure. This horizontal integration tactic may be legal (assuming there aren’t exclusivity clauses hidden within the franchise agreements), but it’s definitely not in the spirit of community.
Also, I worked in a mom-and-pop shop over 20 years ago. Lip service was paid to community and building a relationship with the customer, but the profit motive reigned supreme. The romantic notion of a motorcycle shop by and for motorcyclists was already dead or dying at that time, and the reasons had nothing to do with dealership competition. More likely it was the beginnings of the dysfunction in the industry, the productization and profiteering that I touched on in my earlier comment.
You mention TT+L, which changes the subject to new bikes. My original post was about parts. The fact of the matter is that most dealerships of any size will sell bikes (or cars) at cost in certain circumstances and hope to make up the difference in parts and service. Usually the dealership doesn’t even own the inventory—the factory effectively stocks the dealership with loaner bikes and collects interest—so the faster they can get them out the door the better. It’s the rare and privileged dealership that can turn a profit on the bikes themselves, though Woods may very well be one of these because of the franchise lock. Again, I don’t begrudge them a profit, but I do hate them for unapologetically trying to rip me off.
If everyone had it for the lowest price, it would just be called, “The Price.” I’m sure they beat other stores prices on some things.
As far as them taking over the Austin market, only by the city limits. within 15 miles north you have three dealers that cover Honda, Yamaha, Suzuki, Kawi, Polaris, & KTM. Just south you have every brand Imaginable down IH35. Im sure the location of these dealers has as much to do with Travis County property tax as the proximity to Woods.
Woods was a “mom and pops” shop, family owned and opperated. in fact one of the dealers down south is Mr. Woods new store. Here IN Austin, Zabors, TJ’s, Austin Sport Cycle, Team Scream. Any of these dealers can get factory parts.
Im not defending Woods as much as I am warning about internet parts. I admit i buy parts online sometimes. But when there is a problem you have to jump through hoops to get it fixed. when you go to a storefront you have a face to deal with not a webpage, this also includes accountability.
Quick example- A customer didnt like my shops price on a tire, bought one online for 30% less. We mounted and balanced the tire for him. (this peticular bike required driveshaft removal to change the rear tire) the cost of the labor was about $85, typical for the specific bike. two days later he comes in telling us how we didnt balance his tire, chewing us a new ass. after investigation, the tire was defective and had a flat spot, something that would not show on a balancer. who do you think is going to have to pay for another tire and an $85 labor ticket? If he had bought the tire here for retail, we would have been obligated to give him a new $145 tire and cover the labor.
Apparently APD has discovered a “chop” shop right next door to Woods Fun Center – lots of stolen bikes. hmmmm.
I don’t think you understand the motorcycle industry. Most money is made on sales of new and used motorcycles. Parts comes in second in gross product and Service very rarely brakes even or covers your over head. If you ever want to know how it works read some RPM management group or Ed Lemco works on motorcycle dealers.
Thanks for the comment. I’ll readily admit that today’s large, urban, multi-brand shop has different economics from the small, rural, single-brand (Honda) shop I worked in 20 years ago.
Also note that I was mainly talking about margin, not gross. And there’s simply no beating (or justifying) the 100%+ point-of-sale markup on parts, accessories and supplies.
I’ll concede that the used bike sales were always a moneymaker, mostly because we completely low-balled the trade-ins (another parallel with the auto industry).
New bike sales have probably changed due to financing. I imagine that cheap, easy-approval loans (which didn’t exist when I was in the business–we had post-Reagan rates and you actually had to have good credit and job to get financing) make it far more likely someone will walk into the store and sign on the dotted line at sticker price, which could very well mean the margins have improved. I also imagine, as in the auto industry, the dealership makes a chunk on the financing itself.
But again, none of that justifies raping the customer at the parts counter.
Since you mention Ed Lemco, I’ll say that the resurgence of his focus brand–Harley Davidson–is a story in itself. 20 years ago they were a wheezing, faltering company. Their product was seen as inferior, and many would argue that they were kept alive solely by the import tariff on Japanese bikes. Today they’re a mystique product that people will literally mortgage their house to obtain. Tapping into the cultivated culture of irrationality that I mentioned above, it’s easy to understand how Harley dealerships are among the most profitable. Given their stratospheric sticker pricing and a passionate clientele, it’s not surprising to hear Ed (and you) say that there’s money to be made on the front end.
I have worked for multiple motorcycle shops and the price that you were quoted only has a markup of 40% above cost of product. This is standard for most industries…. so what is the problem?
Um, no. As was listed in the second comment, this is actually 145% over dealer cost, yielding a 60% markup.