KTM have upset another dealer.

[Rasher]

Manufacturers can seem to encourage the boom and bust, they allow dealerships a lot of credit so they can sell large numbers of bikes, over time they make good money, even if the dealers may struggle, often dealers rely on targets to get end of year kickbacks - I believe this is what led to the demise of places like Carnell and Motorcycle City way back, they stacked bikes high, flogged em cheap and relede upon end of year kickbacks - one bad year / recession and they're fucked.

Over time a dealer will sell more, get extended further credit, eventually owing a LOT of money, at some point the sales may slow, the manufacturers refuse additonal credit, they may lose a large chunk when it all goes pop - but have made a lot of money on all the bikes sold prior to the company going pop.

I have seen Carnell, Motorcycle City, George White empires rise and fall, and then along pops a new big dealership chain and it all goes around again.

Cannot be easy to run a stable business long term, very few independants left with major franchise, and much as I like to moan about main dealer servicing rates, I would not be mad enough to try and run a bike shop these days, indies undercutting your service prices, manufacturers demanding the greatest premises on earth and huge national dealerships flogging bikes for less than you can buy them in for. Fuck That!

 

[JJH]

A little memory niggle is going off in my pea of a brain. Was there some controversy around that company before? Or the owner? JJH

 

[SBD]

Charlie Munger’s obituary - he died last week Warren Buffet’s right hand man.

While Berkshire’s leaders were feted by its shareholders for generating extraordinary profits, Munger played down the intelligence behind their success. “I think part of the popularity of Berkshire Hathaway is that we look like people who have found a trick,” he said in 2010.

“It’s not brilliance. It’s just avoiding stupidity.”

 

[GSite]

Manufacturers can seem to encourage the boom and bust, they allow dealerships a lot of credit so they can sell large numbers of bikes, over time they make good money, even if the dealers may struggle, often dealers rely on targets to get end of year kickbacks - I believe this is what led to the demise of places like Carnell and Motorcycle City way back, they stacked bikes high, flogged em cheap and relede upon end of year kickbacks - one bad year / recession and they're fucked.

Over time a dealer will sell more, get extended further credit, eventually owing a LOT of money, at some point the sales may slow, the manufacturers refuse additonal credit, they may lose a large chunk when it all goes pop - but have made a lot of money on all the bikes sold prior to the company going pop.

I have seen Carnell, Motorcycle City, George White empires rise and fall, and then along pops a new big dealership chain and it all goes around again.

Cannot be easy to run a stable business long term, very few independants left with major franchise, and much as I like to moan about main dealer servicing rates, I would not be mad enough to try and run a bike shop these days, indies undercutting your service prices, manufacturers demanding the greatest premises on earth and huge national dealerships flogging bikes for less than you can buy them in for. Fuck That!

Agreed 100% - wonder how the group buying power of a "collective" of smaller dealers would work and if bike manufacturers would agree to sell in such a way, where they do not have control of individual dealers who can afford to stick two fingers up if/when they want to dump the franchise.