9½ Reasons Motorcycle Shops Are Closing That Have Nothing To Do With Sales

[Glenn/RZ500]

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If you can, catch the latest episode of El Camino on Rev TV. It goes into detail at behind the scene at a motorcycle dealership. GP Bikes in this profile. A lot of what we`ve discussed here and sometimes blind luck is a factor. They took on a number of Euro brands as they grew out of boutique status and became big and mainstream. GP has the bases covered for the ups and downs of the industry, Jerry looks like a guy that can think on his feet and work hard at the same time, he deserves his success.

 

[Dirty Frank]

I guess being a motorcycle mechanic does not pay enough? In the Durham area, if you want anything done. be prepared to wait a couple weeks at least. A number of shops have closed here in the last few years. If you need your bike worked on, be prepared to wait.

Considering the training and skills involved and adding to that a its a seasonable gig who in their right mind would want the job?

 

[nobbie48]

Staff costs are way up , running a shop where your employes would like basic dental /medical coverage , and workmans comp all adds up , then add rent, business insurance which is costed out based on risk (motorcycle) and everything else related to running the business and it becomes a very low return proposition. If you get a good tech on staff , if you dont pay them quite well and they are remotely presentable they will take a municipal job servicing lawn equipment for the city, with a pension.
Many of these industries are really struggling , motorcycle, marine, RV techs , simply because if you have any talent there are better jobs all over. The old addage , how do you end up with a million in the motorcycle trade? well you start with two million and work back certainly rings true.

Seasonal is a curse.

I was talking to a crusty old gent who ran a marina in fishing country.

The first day of fishing he'd arrive at the shop and see 20 boats parked along the road.

"The motor won't start. Can you fix it right away?"

"Nope"

"Can you tell me someone that can?"

"I don't hate anyone that bad."

Ditto motorcycles, snow blowers, lawn mowers, snow tires

 

[MCT]

I guess being a motorcycle mechanic does not pay enough? In the Durham area, if you want anything done. be prepared to wait a couple weeks at least. A number of shops have closed here in the last few years. If you need your bike worked on, be prepared to wait.

I guess it depends on what you need to get done. There are simple DIY jobs that most can do like simple maintenance (oil and oil filter change, air filter change, maybe a valve adjust). Of course if you live where you cannot do any work on your vehicle, I get that.

As for pay rates, some people are delusional as to what they are worth.

 

[crankcall]

My friends son just moved home from BC. He is yamaha, suzuki, Honda and Artic cat certified, motorcycles , ATV , snowmobile experience and is coming home to frame houses with his dad. He blames low pay, high rent and unrealistic customers . I suspect knowing him , half of the problem is him. But its another tradesman out of the business

 

[busabim]

In my day there were many cycle shops too numerous to list. However, many businesses are no longer viable due to escalating rents and poor margins in the automotive sector.

Motorcycles were always a niche business but could be profitable decades ago. often they were paired with automotive to lower costs for rent.

ָA more recent development is brands such as BMW who no longer want independent retailers which did not exist decades ago. Cycle world had all the Japanese and some European brands as well. I was offered ownership years ago with an existing dealer from Ottawa and I looked at the numbers and said pass. Too low of return.

As retail space became more valuable to own and rent out, the viability of independent motorcycle shops and all independent retail has fallen.

Toronto is the most overpriced market now in the world.

Enjoy

 

[adri]

Interesing info. But one point you made with regards to shops having difficulties finding a place to open a business. I agree this may apply to the main city areas. But as soon as you go out of the Toronto boundaries for example. There is plenty of designated industrial land.

Thanks, and fair enough! I'll try to be brief and not repeat myself too much.

Truth be told when I was looking to setup a proper shop a few years ago with my own retail location, the biggest barrier to entry wasn't (insert laundry list of things mentioned in the video). For me, because I live and own a home in Toronto, the biggest hurdle was getting a space zoned for automotive.

The price per sq./ft on spaces still zoned for automotive in the city are insane because of (insert list of reasons mentioned in the video). It's a dream-killer.

 

[adri]

Didn't watch either, it's due to short riding season, high insurance, high cost of living, and out of wack real estate and taxes.

All of this gives way to the rise of electric scooters. Inexpensive to own and operate.

So so sooooooo many more, much more critical, reasons than those.

 

[adri]

There are other barriers like the difficulty of securing business insurance for a independent motorcycle shop without a brand franchise.
Near impossible in Ontario FWIW.

Yep!

I found that most people in YouTube comments of previous videos on this topic could only see things from the customer's perspective and totally missed the really important things like this. They just can't imagine how things look from the other side of the table, or how things run behind the scenes.

They're real quick to leave their comments though lol

 

[adri]

For many businesses at times the operational costs can take too large of a chunk out of the bottom line. Toss in all the other factors and its easy to see what many places shut down.

That's right. Ask any motorcycle shop (or hell, any business for that matter), if they'd rather have an extra $250k in profits, or a reduction of $250k in costs, and it's a no brainer.

It's not the market shrink that's hurting, it's the overhead creep... I don't even think we can call it creeping anymore. It's the overhead jump that's killing businesses.

 

[MCT]

Whatever the countless reasons there are, my wallet does the talking. I shop where I am ahead just as a business owners would. And with the border being a skip, guess where.

And knowing a few of owners, none of them were hurting. In fact, they are living tons better than the vast majority of us.

 

[250R-ICE]

Thanks, and fair enough! I'll try to be brief and not repeat myself too much.

Truth be told when I was looking to setup a proper shop a few years ago with my own retail location, the biggest barrier to entry wasn't (insert laundry list of things mentioned in the video). For me, because I live and own a home in Toronto, the biggest hurdle was getting a space zoned for automotive.

The price per sq./ft on spaces still zoned for automotive in the city are insane because of (insert list of reasons mentioned in the video). It's a dream-killer.

Have you investigated options just outside the city limits such as Ajax, Whitby etc. ? Toronto is a lost cause unless you build low cost housing or Transit lanes. They have no interest in supporting small businesses.

 

[MCT]

Have you investigated options just outside the city limits such as Ajax, Whitby etc. ?

Exactly where I bought my last bike and some accessories.

 

[xrljoel]

And knowing a few of owners, none of them were hurting. In fact, they are living tons better than the vast majority of us.

I've heard that a lot over the years, sometimes directed me when we owned our nursery.

What the people making this remark never saw or considered was how much work and sacrifice was necessary to get to the point where they felt justified in their envy (for lack of a better word). I still hear it from time to time, as if the wealth my wife and I created fell from heaven by sheer luck.

Certainly everybody is entitled to make their own value-based decisions about purchases, dealerships, prices and service, I'm just trying to make note that not every dealer or shop is trying to rip the customer off by inflating prices, on either side of the border.

 

[Lightcycle]

The shops where I live are insulated from seasonal downturns by offering snowmobiles, snowbikes, jetskis, ATVs, etc. We live in a rural area with lots of lakes and mountains nearby, so the powersports business is doing well.

I think the single-manufacturer shops like Harley Davidson may be hurting a little bit, but the multi-lines are thriving. One shop has KTM, but also carries Kawasaki and Suzuki. The other Husky/Gas Gas shop sells Royal Enfield, Arctic Cat and eBikes. The Yamaha shop took on Ducati and was recently bought by another shop that sells Honda/BMW/CFMoto.

Diversification is important to survival.

Unfortunately for HD, selling more T-shirts and mugs than bikes is *not* adequate diversification...

 

[Dirty Frank]

Unfortunately for HD, selling more T-shirts and mugs than bikes is *not* adequate diversification...

Back in HD's glory days Deely would have shops send staff members out on field trips to buy HD T-shirts so that Deely's lawyer could send out cease and desist letters.

 

[MCT]

What the people making this remark never saw or considered was how much work and sacrifice was necessary to get to the point where they felt justified in their envy (for lack of a better word). I still hear it from time to time, as if the wealth my wife and I created fell from heaven by sheer luck.

The difference is the work you put in, you benefit from. Someone working hard for someone else does not benefit them at all.

Then there is the before tax and after tax money. Your working stiff cannot write off a slew of things, a business owner can. When I go out with my friend on a ride, he pays for lunch and he gets to write it off. If I paid for it, I can't write it off.

As for the high cost of everything, I would suggest business owners have a serious chat with the government instead of sticking it to the consumer, but why bother as most Canadians are suckers and will pay it. Tell me why the same jug of Mobil 1 Synthetic is US$25 every day and up here it is CA$53....oh, but I can wait for it to go on sale. Why would I?

 

[Lightcycle]

The difference is the work you put in, you benefit from. Someone working hard for someone else does not benefit them at all.

The other side of that particular coin is risk = reward.

The employee clocking in and out takes 0 risk. It's transactional. He gets paid for his time and gets to not worry about the business after clocking out.

The employer is the one putting up the capital and risking losing his principal if the venture is unsuccessful. They stand to lose a lot more than the employee. However, if they are successful, they get to reap the rewards, and deservedly so.

There is nothing stopping the employee from also taking out a loan, starting his own business and also playing the risk and reward game themselves.

Nothing ventured, nothing gained.

 

[Dirty Frank]

As for the high cost of everything, I would suggest business owners have a serious chat with the government instead of sticking it to the consumer, but why bother as most Canadians are suckers and will pay it. Tell me why the same jug of Mobil 1 Synthetic is US$25 every day and up here it is CA$53....oh, but I can wait for it to go on sale. Why would I?

If you are a smaller retailer in Canada for many products you are stuck buying stock from wholesalers that have a monopoly on the Canadian market. They call it a protected market.
You are prevented from importing the goods from other markets due to red tape issues like label language or Canadian certification on a identical product.
Our government is complicit in this but the small business voice though organizations like the CFIB do not have near the resources of big business to sway the government and legislation.
If you want to develop some real hate of government bureaucracy, indifference and incompetence run a small business for a couple of decades.

 

[adri]

Have you investigated options just outside the city limits such as Ajax, Whitby etc. ? Toronto is a lost cause unless you build low cost housing or Transit lanes. They have no interest in supporting small businesses.

Truthfully, no. With the missus' condition she's unable to get any kind of drivers license, so having busses and subways at our doorstep isn't a "nice-to-have", it's a necessity. And being self-employed comes with enough unpaid hours as it is, as does making YouTube videos people will reply to with "Didnt watch the video, but...", so I do enough unpaid hours a week as it is. I didn't want to also commit to an additional 10-14 hours a week of unpaid commuting.

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