Why Your Motorcycle Brand Was Not at the Show
As the motorcycle show and Expo season winds down, I read many comments from enthusiasts that were dismayed or appalled or extremely angry that their favorite manufacturer chose not to attend and display a cornucopia of new models.
This has gradually become more of a problem in the last decade, and there are reasons for it.
First of all, what is the purpose of an original equipment manufacturer (OEM) that produces motorcycles?
Create machines that people will purchase; you might say.
And you would be wrong.
The purpose of an OEM, in any business, is to stay in business. This is much more complicated than creating products that people want to buy, which is a huge challenge all by itself. To stay in business, you must have a good product, market it correctly, hire, train, and retain the right people and… control costs. Bingo!
Consider what it takes for an OEM to put on a display at a show. You might have a fleet of “show bikes” that are shipped to each show by a semi or several, plus the display for those bikes, which can vary from mild to (expensive) wild, and probably a product expert or six. Or you can call on local dealers to display products that they have ordered for sale, but there are pitfalls there as well.
Bikes on display live a hard life, even if not ridden at all. People sit on them, and some people are careless or mindless. Paint gets scratched, rubber heels leave black streaks or scratches, small parts might be stolen (why?) and all sorts of mayhem, accidental or not, can occur.
Most shows or expos are held in large population areas. These can make getting to the show venue in a large semi or several, at the same time everyone else is, a hassle and expensive. Most large urban areas have agreements with various unions, so if you need an extension cord brought in from the truck, it must be carried in and plugged in by a licensed electrician, for example. As the former president of a union, I am not complaining about this, but it and other examples can add significantly to the cost. Your displays can be damaged during shipment or set up or tear down activities.
Of course, you need staff on hand to “person” your display. The most knowledgeable people in the area are probably local dealer sales staff, if there is a local dealer. Those folks are usually paid on commission, and very few sales actually occur at the site of the show, so you may need to pay them extra, plus parking, food, perhaps a motel room, etc.
Keep in mind that the organization putting on the show is also a business, and also needs to make money. The cost of your display space will vary not only by size but by location within the show. This expense will vary from large to exorbitant.
The point is that these shows are expensive. If you’re an OEM that is going to commit to the full national tour the cost can be…something to ponder deeply.
Some of that can be attributed to marketing or public relations or advertising, but no matter how clever the accountant for the OEM or the dealer, it is still going to be a cost.
To be offset by sales? Hmmmmmm. Who goes to shows? In my fourteen years of experience working at shows and decades of experiencing them, there are several separate groups. The largest are, of course, motorcycle enthusiasts, who often come in groups of friends or as club members. They enjoy the camaraderie and walking around checking out “stuff,” that they may want to buy. But – almost all of them already own a motorcycle, and maybe more than one, and they have some gear or, more often, a lot of gear. How many of them are seriously shopping for a new motorcycle? Few.
The second largest group are people who have never owned a motorcycle and probably never will. They are attending the show because it was in town this weekend and looked interesting. They are there to look at all the shiny things and maybe the special attractions like stunt riders, etc. How many of them are looking for a bike to purchase? Almost none.
The smallest group will be people who want to get into motorcycling. They are there to soak up a lot of information and learn a great deal. They will spend a lot of time talking to sales people for OEMs and gear vendors, and their time will be very well spent. How many will make a purchase decision at the show? Almost none.
Now consider the size of the market. KIA, for example, will sell more cars in America this year, exponentially, than all of the motorcycle OEMs added together. The motorcycle industry is currently much smaller than twenty years or so, partly due to the collapse of the availability of home equity loans. There are far fewer “units” (I hate that word!) to spread out the cost.
Efficiency of scale is a huge factor. When I was a boy, my father was working on the Apollo project. There were very few things he could tell me about it, since it was all classified, but one conversational snippet has stayed with me all these years. If you wanted to design and manufacture one door for a space capsule, he explained, it would cost several million dollars. If you wanted to make 100,000 of them, each would cost $29.95.
All in all, for any OEM considering putting on a display at a major show or a national series of them, the numbers do not work. “Doesn’t pencil,” as they say. You can send a demo truck to many dealers, or help defray the cost of special events at your dealer network, or a host of other promotional ideas and events, and save an enormous pile of money.
Which helps you survive.
I wouldn’t do it either.
Copyright 2020 David Preston