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China-Bike Hassle or View to the Future: The Direct-Purchase Dirt bike Model

dingerjunkie

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My recent purchase of King Moon Racer 02, an Orion Powersports RXB-39, has given me an opportunity to expose other riders to information they may not have been able to find clearly stated in other avenues.  Because this is ThumperTalk, most of that desired information is about the bikes, and I’m looking forward to providing more there.  However, day-job duties have me travelling this week, so trail data will have to wait a bit. 

Meanwhile, there is something possibly more important to cover.  I believe much of the concern or trepidation surrounding Chinese bikes is not related to the bikes themselves, but rather to the nature of the process involved in getting one.

I hope this post clears the air on the direct-purchase market model, it’s realities around common fears, the positives/negatives of the process, and where I think this model could succeed…or fail…moving forward in the United States.

To start, this will be about the business model and purchasing experience, NOT about the source country for the products.  The strengths and weaknesses I see in direct-purchase would apply equally to a “domestic” manufacturer if one were to go this way, and foreign trade arrangements (tariffs, exchange rates, etc.) will not play into this evaluation.

…so…here is a breakdown of the various points I considered in my experience with the no-dealer or remote-dealer model…

BARRIERS TO ENTRY

This really seems like a great option for small-cap or boutique companies.  Remember that when the Japanese first entered the US market, requirements for dealerships were far less stringent than today.  If the Japanese needed to compete with today’s dealer networks to get a toe-hold, they never would have made it.  Even with the rudimentary dealership structures in the early 1960’s, buyers knew they were taking a bit of a risk. The risk was in the unknown quality of the bikes, the unknown quality of the support/supply chain and the unknown quality of many new dealers.

And there were failures during the Japanese Invasion.  Just look up Bridgestone Motorcycles or the Marusho Lilac.  Those who risked on the failed brands lost, just like those betting on some of today’s small companies may lose…but that risk may also be worth the payoff.  Remember, though…that was a combination of emerging manufacturers combined with an emerging distribution network…let’s not confuse the risks of the bike with the risks of the sales channel.

It seems to me that some companies could sell far more bikes relying upon a quality online distributor and direct-sale and they could by spinning up a national dealer network.  This not just for “new” companies, but also for “small” companies.  It is already being done with boutique/designer shoes, apparel, watches, glasses, etc.  Why not boutique racing motorcycles?  Also remember that Sears sold motorcycles…successfully…by catalog into the 1970’s…so this is definitely possible.

CRATE-BIKE VS. ASSEMBLED

Okay…let’s assume you are an early-adopter-type, like me, and you decide to pull the trigger on a direct-purchase motorcycle.  A big initial question comes in bike-state at delivery.  Do you buy a “crate bike” or an assembled bike?

The decision, at some level, will define the market placement chosen by the Distributor, who is the agent of the OEM Making bikes.  With my reseller, Orion Powersports, both options were available, with the “crate bike” being offered at a slight discount.  In reality, I see this being positioned as something bigger than a pricing point in the future.  Someone who intends to customize, or who wishes to inspect and set up everything on a bike at time of delivery, would best be served by companies providing crate bikes to mechanical enthusiasts.  Other companies will focus on support and quality, insisting that they personally service and inspect each bike with pre-shipping assembly to ensure all is as it should be before it leaves their hands…best for those less mechanically inclined or those not racing.  Both will have their own marketing appeal.

I think that, for most dirt bike owners/riders, the crate bike seems to make far more sense.  Assembly really only means attaching a front wheel, checking grease at pivot points, mounting some minor bodywork and changing out fluids used during shipping.  Anyone who has serviced a linkage or changed a tire can handle the job with ease.  Handling assembly myself actually gave me far more confidence in the quality of the bike I purchased, as I could evaluate individual components and the level of care put into the unit as the bike went together.

EXTENDING AFTERMARKET TO THE OEM WORLD

The next big fear comes with the first crash, or the first “break.”  What about parts?  Where do I get info on setup?  How do I maintain it?  Don’t I need a dealer to help with all of that?

Where are you reading this article?  At an online forum that has info from riders of every brand covering restoration, maintenance, aftermarket compatibility, setup and tuning.  If it isn’t covered here, someone has linked to online pages, blogs or videos that do cover it.  In my last six bike purchases before this one, I found I knew more about the bike I was purchasing than the private sellers or dealers did, thanks to the pre-purchase research that can be done online.

As for parts availability, Orion Powersports has everything up to the point of complete replacement engines available at the request of a FedEx drop.  You could build a complete bike from the parts available at BikeBandit…their survival depends on that.  I have purchased a great deal of aftermarket components for all of my past bikes online.  In fact, I can count the times I actually went to a dealer to buy something for my bikes in the last decade on one hand.  Tires, tubes chains, plastics, cables, grips, suspension upgrades, bars, seat covers, spark plugs…all were purchased online from Amazon, eBay, Rocky Mountain ATV/MC, and others. Their stock in central warehouses is greater, so they’re more likely to have a low-volume part than a local dealer would, because the local dealer can’t risk the capital on those parts for just a few local buyers.

Given all that, why would I go buy bike parts from a local guy covering his overhead when he knows less about what I need than I do and will end up having to special-order everything I need anyway?

Emerging brands may have some teething issues on fulfillment, but that is the nature of the new company, not the nature of the sales model.

DELIVERY INFRASTRUCTURE

Here is where direct-sales of motorcycles has the most growing to do.  We’re not talking about tires or other parts that can easily be dropped by the usual residential carriers like UPS or FedEx.  We’re dealing with complete motorcycles, assembled or in crates, that are feet long, feet tall, and usually hundreds of pounds.  This involves shipping at a higher level.  Many companies can deliver packages like this, and do so for retail outlets around the country on a regular basis.  However, those retail outlets are usually set up to accept big shipments on a regular basis with things like elevated shipping bays, so items can be rolled directly off of a semi or delivery vehicle.

I was a little let down in this area with my purchase.  Resellers are going to need to make arrangements with shippers ready to handle regular residential drops, with lift-gate and pallet-dolly service as an expected part of the package…baked into the price.  It was a bit of a bummer when Orion Powersports advertised “free shipping” only to find that I had to pay $90 to the shipping company to provide a lift-gate and dolly service to get the flippin’ crate out of the truck and into my garage.  I felt just about like I do when a motorcycle dealer advertises bikes at MSRP knowing full well that the price will go up by at least $800 due to “paperwork and prep” for a bike that isn’t even road-legal.

Advice to the resellers…factor lift-gate service into your pricing, or make inclusion of lift-gate in shipping rates the default for us to choose to remove if we happen to have access to a shipping bay.  Make receiving a motorcycle less intimidating and more buyer-friendly, and you’ll likely have far more buyers committing.  Most of us are not bottom-feeders seeking the absolute lowest prices…treat us as better than that.

RETURN CONCERNS

Let’s go into a worst-case situation.  The bike has been purchased.  The delivery has arrived.  The bike is damaged…or worse…the bike had a significant failure in a short period of time after purchase.  Who does one complain to?  What is the recourse for the jilted buyer?

Warranty support, or delivery-damage support will be a focus, and a matter of pride, for companies that expect to survive in the online-sales world, just as it is a focus for boutique online retailers now.  Good companies will thrive based on good support and service.  Bad companies will be driven out of business by bad feedback from angry buyers in the online marketplace and forums.

Speed of support will improve as the model matures.  Companies like Rocky Mountain ATV/MC and Chaprral have been very good to me in the event that a part is wrong, an item arrives damaged or a piece of apparel doesn’t fit.  This will be no different when complete bikes are sold through similar…or the same…channels.  In fact, it would not surprise me to see a major online motorsports aftermarket company choose to directly sell complete motorcycles in the future.

Existing OEM distributors will endeavor to match service levels as they scale…if they wish to scale.  In the event that an experience truly goes sideways, consumers can always challenge transactions through their credit card companies or PayPal as they currently do…just for a larger balance.

FINAL OPINION

From the view of retail customers, who is this good for?  Who is this bad for?

Is this good for dirt bikes?  Yes.  In my view, this model has the potential to be fantastic for all off-road OEM resellers, including the current Japanese OEM’s if they’re willing to temporarily upset their dealer network…or turn those dealers into pure-service centers.  Dirt bike buyers are used to maintenance on their own gear, with a tendency to “tweak” to a great deal in the aftermarket space.  They also usually know a great deal more than the salespeople in the shops that sell the bikes (with the occasional exceptions of those rare shops run by passionate riders and sporting enthusiasts).  As long as shipping becomes more standardized and a return model for defects (not for “I want something else”) is established, direct-sale of off-road vehicles makes all the sense in the world.

Will this work for pure-street motorcycles?  I don’t think so.  The reasoning is more around the legalities of getting a bike registered and plated in different parts of the country.  The dealers handle inspections, certifications, legal paperwork and responsibility/liability for quality of setup at time of purchase.  I would not want to complete crate-assembly of a YZF-R1, then trailer it to have a tech-inspection done prior to getting a bike with only a title/MSO plated…too much hassle.  The average street rider, I believe, is also far less involved with their bikes from a maintenance perspective than off-roaders.  Many street bikes are treated with all the respect of a washing machine or other appliance.  Those buyers really need a dealer to “make it easy.”

Where I see the greatest opportunity is in the area of small-scale performance brands like Moto-TM.  I believe there are already threads here on ThumperTalk about racers who have purchased TM crate-bikes to race for the 2019 season.  Something tells me that extending that beyond the dedicated pro racers to amateur-level enthusiasts would allow them to punch above their weight against the likes of Beta and KTM.  In fact, I could see them surpassing a limited-dealer-network company like Beta with the right marketing approach and a willingness to find a dedicated North American distributor willing to commit to an online retail model.

Enough of my prattling…I hope this has been at least interesting for you to read, and I’d love to get your thoughts on the possibilities.

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Dinger cant wait to see more blogs on this bike. 

 

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