David Preston

What is the Actual Cost of a Motorcycle (or anything else)?

After receiving hundreds of responses from all over the world to my essay on coping with your motorcycle dealer (thank you), almost all of them positive (thank you!), I thought it might be useful to add some thoughts on cost.

A few people let me know that money is money, and they wish to spend as little of it as possible. This is a determinant in whether they use the products and services of their motorcycle dealer or ride the information highway. Fair enough.  Retired and (currently) unemployed, spending as little as possible is pretty much an imperative for me.

But – what is the actual cost if you are purchasing niche products?

Consider toilet paper, a product that almost everyone purchases.  Unless, of course, you have a strange predilection to relive the origin of the phrase “rough as a corn cob.”  I can purchase toilet paper from dozens of outlets (pun!) near my home.  There is little to be gained by Internet shopping.  You go for price vs. quantity, with possibly an assessment of quality.

Motorcycles are not sold in quantities anything like toilet paper.  They comprise, as do many things, a much smaller market.  Let’s say you enjoy your involvement in motorcycles, radio-controlled ship models, and scuba diving.   My, aren’t you interesting!

For products like this you may or may not have a store near you, or you have to turn to the wonders of the Internet.  However, if it is scale model replicas of cannons for the radio-controlled warship you are building, or a new weight belt or fins, or motorcycle gear, you may want to have the product in your hands for a close inspection before parting with your funds.

So, what is the total cost of an item, with all factors considered? There is the purchase price, or course, but also the cost of your transport and time to and from the store, plus any hassles involved.  Some of that cost may be offset in a way if you enjoy simply being in the store.

The cost of an item is influenced by the size of the market, the number of items produced, and consumer demand.  Plus, the regrettable historic tendency of humans for greed.  When the 2005 Ford GT came out, the list price was $150,000, but most dealers added a “market adjustment,” which might have been as much as $100,000. Examples abound throughout history.  To test this, run out to your local Chevy dealer and attempt to order the new mid-engine Corvette, which magazines have been touting for, literally, 50 years. Tell the salesperson you want a base Corvette, with no options, at the MSRP listed.  Let me know how you do.

As a teen ager, I had a conversation with my father, who was working on the design of the Apollo spacecraft at the time. He explained that if you wanted to build one door for the Apollo craft, it would cost $16,000,000 dollars.  If you wanted to make 100,000 of those doors, the price would drop to $99.95.

Apply that to your hobbies.  Replica scale cannons for your model ship will be relatively expensive for their size and weight, because the market is small. Motorcycle tires are going to be more expensive than car tires, even though they are much smaller, because the market is miniscule compared to car tires.

Another factor to consider is your own mechanical ability and the tools at your disposal. If you own a tire changer and balancer, perhaps it makes sense to order tires and do the change yourself.  You may also have the requisite skills and find enjoyment in doing your own maintenance and repair, or even custom work and restorations. You have to consider the investment in the tools, of course, but if you enjoy the tasks, it is probably worth it.

Let’s go back to the store, in this case a local store that sells the niche items you need/want for your hobby.  But you can find them at less cost on the Internet.  So can everyone else. If enough people choose the Internet option (I am simplifying), the local store goes out of business.

Now calculate your cost again. I have two Triumph dealerships in my area. What happens if they close?  There will be a delay of months, years, or forever, before another Triumph dealer is nearby.  What are my costs now?

For Triumph motorcycles, I would need to travel over 200 miles south to Oregon, or 140 miles north and across the border into Canada.  Shopping for the items I want to hold in my hands before purchase just got exponentially more expensive in time, hassle, and cost. 

By this reasoning, it is in my own best interest to make a reasonable effort to make sure my local dealers are healthy and profitable.  That may mean I pay a little more here and there, or not, but what I am actually doing is investing in the dealers who support my hobby. For my own benefit.

Or, I can choose to only purchase mainstream products. Like toilet paper.

Copyright 2019                              David Preston

How to Cope with Your Motorcycle Dealer

Twenty years ago, it was common for people to refer to motorcycle “stealerships” (so clever), and gloat about how they purchased products for less on the Internet. Many people felt they were smart to go to the dealership to try on  a jacket or helmet, and then go home and order it for less from a discount outlet. After 2008, motorcycle dealerships began to disappear, and are now somewhat of an endangered species. Could there be a connection? There’s a lengthy book’s worth of reasons for this of course, but let us move on rather than endure a textbook on the economics of the motorcycle business.

Let’s say you have a dealership near you that sells motorcycles you own, and/or like.  Let us posit further that you have spent money at this dealership and have developed a good relationship with the people there.  You wish to spend money there again.  Today’s topic:  what to do when something goes wrong.

Motorcycles are built of materials and put together by people and robots, and even the robots are programmed by people. They are sold and serviced by people, and function in environments that cause wear and tear.  Eventually, something is going to go wrong.

I worked for two different dealerships over the span of thirteen years in various forms of what could be termed “customer support.”  One of many tasks given me was dealing with customer complaints that came to the dealership, usually by e-mail.  The e-mails came directly to me or were forwarded by a manager who was happy to pass on the problem.  There were good reasons for this also, because I was unlikely to be the source of the problem, and could approach it without ego interference.

In some case, as chaos theory would tell us, it was clear that the dealership had gone off track and crashed. In my experience, when it was obvious where the fault lay, the dealership would try very hard to make things right. (Disclaimer: I worked for two very good dealerships. This attitude is not universal, alas)

One very effective technique was to simply ask the customer what we could do to make he or she satisfied.  The answer was usually easier and less expensive than what the dealership might have offered.  But not always.

One I recall with fondness was a very nice man who brought in a Honda sport bike for a major service. He was going to be out of the country for at least a month, so assured the service department that they could work on it whenever time allowed.  Several weeks later, he came by to pick up his bike, and problems ensued.

The Service Manager came to me with a red face and told me we had a real problem. I.E., the customer’s bike was missing!  Thinking very rapidly, he told the customer that at times long-term projects were moved to our warehouse (that was true), and that if he came back on Tuesday, we would have his bike for him. Customer said that was fine.

As the manager suspected, the motorcycle was not in the warehouse.  A brief investigation, helped by security camera evidence, showed that the motorcycle had actually been stolen by a not very intelligent employee.  When the customer returned this was explained, and he was offered a jaw-dropping deal on a trade-in for a new model, which he was thrilled to accept.

But sometimes, customers were…wrong.  There was the man who was irate because the Service Department was not prepared for the appointment he had made.  While he ranted, questions were asked.  His appointment was actually at the competing dealer down the street.  Or the customer who was upset because his front tire had been installed backwards.  He was complaining at length while the counter guy spooled up the computer.  Pointing out to the customer that his front tire had been replaced 5 years and 20,000 miles ago allowed to customer to remember and then apologize profusely; he had forgotten the flat tire on his trip last year that caused the front tire to be replaced by a dealer 1,000 miles away.

Mistakes happen on both sides, but how you handle them makes a huge difference.  I had a customer who was active in the HOG chapter who sent me an e-mail asking why the charge to remove a tire and mount and balance a new one was less at a competing dealer.  I explained that dealerships offer thousands of products, and prices can and do vary for many reasons, and if the other dealer was willing to do it for less, he could consider having them do it.  Done.  Or so I thought.

Not by a long shot. He wrote again the next day, and the day after, and each time I tried to answer his questions reasonably.  It got worse.  His e-mails got more and more hostile, and became personally antagonistic.   I did stop responding, but I was flummoxed.  I had no idea what was going on, and not a clue as to what I should do.  Fortunately, I saved all of his e-mails. Eventually, the owner got wind of this and summoned me to his office to ask what in the world was going on.  I had no idea, I explained, but forwarded the file of e-mails to him,

At our second meeting the owner was furious, but not at me.  He directed me to find out what was required to boot someone out of the HOG chapter.  I protested that this was a customer who had purchased a new Harley every year for 5 years.  I received a cold stare and the words “What’s your point?”

Lesson #1:  I learned that in the case of the two dealerships I worked for (admittedly a limited data base), complaints were to be dealt with, but any customer who was abusive to a staff member was to be cut off immediately.

In any case, we both learned that any member of a HOG chapter is such at the pleasure of the owner of the dealership, and can be removed by a simple letter.  I wrote the letter (irony) and the customer went away.  Of course, many members of the HOG chapter blamed me for this, and I could hardly explain things.

Not to pick on Harley owners or HOG members, because there are plentiful examples from riders and owners of all brands.  When I worked at a BMW dealership, I’d occasionally receive complaints from older owners of older BMWs who were upset that parts and service cost a lot more than when they had purchased their bikes – 20 years earlier.

A Kawasaki customer crashed a bike on a test ride, in the parking lot. Brought it back a few months later with crash damage to the fairing on the other side for a crash settlement as part of an insurance claim, and was angry the dealership would not lie on his behalf, even when it was explained that insurance fraud was a serious crime the dealership would not commit.

On rare occasions the dealership decided to “fire the customer,” as he or she was such a pain that it was not worth the business.  One of my favorite tasks was to be asked to write a letter that was polite, professional, and calm in tone, that upon being read would result in the customer not returning. This was a very delicate task, and I really enjoyed the challenge.

Hundreds of examples, but let us move on.  What to do when something goes wrong?

First of all, let the dealership know something is wrong. They cannot fix a problem they are not aware of.  Do not go storming off to social media land or Yelp or whatever without first letting the dealer know there a snafu has occurred.  You may think that there is a problem when in fact there is not. If a problem does exist, it is much more productive to give them a chance to fix it. If you blow your stack on the Internet the damage is done, and the hot air you blew will be returned by a cold blast from the dealership.

Case in point. Last week I decided I should give myself a new helmet for Christmas.  Do I need a new helmet?  What’s your point?

At the Triumph Best of Britain gala in Seattle the other night I chatted with my favorite Triumph of Seattle employee.  Do they have my chosen brand of helmets – Arai – in stock?  Pfff – of course.  Would it be less expensive now or after the New Year?  Actually, for a few reasons – now.  If I came in and drove a hard bargain with my favorite employee, I could get a deal.

The next day I called and asked about a couple of models.  No response.  Second try.  He said he would have another employee call or text me with what they had.  No response.  No response all day.

Nothing is worse than waiting for a response that never comes.  By the next morning I was – disappointed.  Instead of giving way to my inner child (who is not very inner), and going off on a rant about what a good customer I had been for many years (true), how my last three motorcycles have all been Triumphs from this dealer (true), and how I have purchased all my gear from this dealer for years (almost true), I stifled myself.   With difficulty.  Instead I sent a simple e-mail expressing disappointment.

My phone rang about the time I finished typing. He had received my message and called immediately.  A bit of research revealed that he had made a typo when forwarding my e-mail address to the employee.  Stuff happens.

The second employee sent me a list in a few minutes with the model and color of every XL Arai they had in stock, with excellent sale prices, and some information about what would be coming in early 2020, albeit at higher prices.

Job done, even though I chose not to purchase one of the helmets on hand, as I did not like the colors offered.  But I will.  Eventually.

If you want to do business with your friendly dealer, give them the same chance you would give a friend who you thought had screwed up.  A good friend is hard to find, and worth the effort.  These days, so is a good dealer.

Copyright 2019                      David Preston

Harley’s problems, and how to fix them. (2019 version)

Not the first essay on this topic, for sure, and a frequent subject flogged by many for the past twenty years or so.  But now, with the promised release in late 2020 of two new models with actual new and technologically current engines, it’s time to revisit the topic. 

Where it all went wrong; the back story.  Harley saved itself, or rather the board of directors did, by purchasing itself back from AMF in the early 1980’s.  What seemed to be a function of fiscal insanity happened, with incredibly good fortune, to coincide with a major shift in the demographic – lots of successful yuppie types coming into all sorts of income.  In short time Harley’s became the favorite toy of all manner of adult s (mostly men), who wanted to flaunt their apparent wealth with a nice shiny chromed-out Harley.

The new Harleys were, at last, reliable.  They had always been attractive.  They were still (relatively) slow, did not stop or handle all that well, and required more frequent maintenance. This mattered not a jot to the new buyers, who were for the most part purchasing the equivalent of a flashy ring to strut their bling.  Real Harley riders did benefit, as the profits brought more and better models with more features, at the cost of increased price.

Obviously, I’m taking grotesque short cuts here to avoid turning this into a book. Apologies.

For about twenty years Harley salespeople did not really “sell” motorcycles.  They wrote up sales orders and kept track of waiting lists. For a time, customers did not get to select a favorite color!  When a new bike arrived, they’d be called and asked if they wanted that color. If not, they went to the bottom of the list.  Plus, it became a thing to add a lot of expensive options, preferably Harley options, to the bike before it was delivered.

When I went to work for a Harley-Davidson and other lines dealership in 2000, I was appalled to see dozens of brand-new stock exhaust systems simply tossed into the dumpster. There was simply no market for them.  At times Harley was selling pretty much two exhaust systems with every bike – the stock pipes were thrown away and replaced with Harley’s “Screaming Eagle” pipes, which flowed better but, more importantly, were louder. Where I worked there was one highly skilled mechanic who spent 100% of his time adding accessories to brand new bikes.

Obviously, this created massive profits, but was also the seed of the problems that haunt them today. For one, a lot of the wealthy buyers wanted to go further and actually become a dealership owner.  Harley responded to this by ramping up the cost of entry, and adding an ever-growing list of requirements including the décor, the Harley diagnostic computers to be used in the service department, and much more.  In a way, the company was doing to prospective dealers what they had been doing to customers – charging every penny they could.  By 2005 it was estimated that opening a new Harley dealership would cost at least $10,000,000 before the doors were opened.  There were people who jumped at this “opportunity.”  All of them had money, but many had not the slightest knowledge of running a motorcycle business, or even interest.  They could hire people for that.

An even worse problem infected the people in Milwaukee and at many of the dealerships. They had made great piles of money selling air-cooled V-Twins in small and large sizes, all with gorgeous paint, as Harley had the best paint infrastructure in the business. They also made substantial profits by licensing every imaginable product. Every dealer sold t-shirts with their name and Harley’s proudly displayed. Since Harley was such a hot brand, enthusiasts flocked to the dealer in any city they were in to add to their collection.

And some of the models really were attractive.  The Road King is one of my favorite rides of all time, for example.

There was little motivation to change, as surely all of this would go on forever.  …Until it didn’t.

In 2003 or so I advised some high school marketing students on a research project.  They received over a thousand responses from across the country to a survey they’d sent out to young people aged 16-25 concerning what they thought of when they heard “Harley-Davidson.”

Of the available responses, two dominated: a.) Their grandparents and b.) thugs.

The students were surprised by this, but the data was overwhelming. A video conference was arranged with the Harley marketing folks in Milwaukee (very cutting edge at the time) and the students’ efforts were politely but abruptly and completely snubbed.  Harley’s marketing minds preferred to ignore information they did not like.  A valuable lesson for the students in how corporate minds “think.”

Then came the stock market crash. For years people had been purchasing motorcycles, boats, sports cars, etc. with equity loans, some of them demonstrable shaky.  You could get a loan for a new motorcycle with a credit score of less than 400.  Try that today!

Suddenly dealers had motorcycles of all brands that people could not purchase. Where I worked – 600 of them.   Some of the new and expensive dealerships went away, flushing away a lot of money and the jobs of devoted staff.

A large and expensive motorcycle with outdated technology was no longer a must have, no matter how gorgeous.  New technology and new machines with a lower price point were needed, and this is where the real problems began to set in.

Harley decided to offer an “American” sport bike, and purchased the assets and talents of Erik Buell. But they could not bring themselves to commit to the concept to the extent of providing Buell with a real engine, and he was forced to soldier on with a modified Sportster engine, which had been hot stuff – in 1958.  They made the Blast!, a small single cylinder entry bike with half of a Sportster engine, but dealers did not know how to sell such a bike and were not much interested. Buell fell apart after 20 years of near neglect, having never shown a profit.

Harley did have the financial resources and engineering talent to create what was needed, and in many cases did, but then left it to dealer personnel who were wedded to low rpm and heavy cruisers to sell, which they failed to do with consistency.

Consider the V-Rod. A “performance cruiser” with a terrific engine.  But – an engine that needed to get to 4,000 rpm before things got serious.  This was sold by people who felt, 3,000 rpm should be plenty. They made a sport bike version of the V-Rod for one year, and it was really attractive and went like stink.  There were niggles, like hard frame tubes that contacted your thighs when riding, an engine that was too heavy, and a price that was not competitive.  No matter, as many dealers hated sport bikes and did not order the model or did not try very hard to sell it.  The sport bike version that had so much potential was dropped after only one year, and the V-Rod soldiered on for years as a cruiser. Each year brought new colors and “bold new graphics.”

At the same time – things got worse.  Advancing noise and emissions standards made it harder for large air-cooled V-twin engines to compete, and made them even more expensive. And, the students had been correct years earlier.  Thugs were rare, and the grandparents were rapidly leaving the highways for a higher plane.

Which brings us more or less to today.  For the past few years Harley has taken a “pasta” approach to marketing and design. Throw something at the wall to see if it is done, and go with it.  Unfortunately, they have often missed the wall.

They invested heavily in an electric motorcycle company, then sold out less than a year later.  They eventually produced their own electric bike, which would have been terrific if it could offer 300 miles of range for $20,000.  Instead it offered 200 miles of range for $30,000, which cost them a lot of customers, including a friend of mine.  They responded to early criticism, which was rife, to explain that the bike was meant as a “starter” bike, and customers would eventually move on to a gas Harley. A $30,000 starter bike!  Can we say hubris?  Sales have been… a challenge.

They brought out a new prototype for a new use every few months or so, which generated the obligatory barrels of enthusiast ink, and then the bike would be seemingly erased.

But now – finally!  We see the touted introduction of two new models for late 2020.  The Bronx will be a street fighter style bike with a 975cc twin with 105hp, and the Pan American will offer 1250cc and 145hp.  Both look like very attractive and capable bikes.

But – here is the fear.  They will be sold by the same dealers who have managed to bungle the sale of everything that was not a large and heavy cruiser for the past two decades.  Will Harley commit to training and education of dealer staff to get them to understand and actually love the riding experience of these types of bikes?

There has never been anything wrong with the motorcycles. The engineers are competent, and the line workers who put the bikes together do an excellent job.

The problem lies with the moribund mind set and world view of top management, the sales department, and many of the dealers and their staffs.  IF Harley can change the view from the top, and then invest in the training required to get dealer and sales staff to embrace electronic technology, the joys of off-road dual sport bikes, and the simple pleasures to be found in motorcycles with light weight, horsepower, handling, and excellent brakes, the bikes will sell and Harley will survive. And, they can and should continue to produce their traditional models.

Can they do this?  I hope so. I really do.  History argues against that hope, but let’s be positive!  The motorcycle world needs a healthy Harley-Davidson.

Copyright 2019                      David Preston

You can read more of my work – a lot more of it – at www.davidpreston.biz.