My Dream Moves Towards Reality: The Naperville Scooter Store

Discussion in 'Battle Scooters' started by KennyT, Nov 9, 2012.

  1. JerseyBiker

    JerseyBiker Living the life!

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    I had once thought of opening a scooter shop. Some things I thought of at the time. Maybe these questions will help you too! Good luck!

    Who will be doing the mechanic work on the scoots?
    What will the mechanics salary be?
    At the start, before many scoots have sold, service work might be slow - what will the mechanic do all day?
    What will it cost for a sales person to be on site when you are working your other job?
    How much is insurance going to cost? Will it include claims for improper service work?

    Having a mechanic on site became an issue for me. Hopefully you've got that covered.

    Look forward to reading more as you move forward!

    David
    #21
  2. tortoise2

    tortoise2 Been here awhile

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  3. JerryH

    JerryH Banned

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    The ATV market in the U.S. is huge. it is what keeps many Japanese dealers afloat these days, because the market for overpriced motorcycles is just not there. But most people want name brands, Japanese, Polaris, and Can Am. I bought a new Honda Recon 250ES back in '08 while the dealer was overstocked and was having a fire sale. I had a full sized pickup back then. I'm in AZ, and was able to make a few minor modifications and register it as street legal. But an ATV cannot be ridden on pavement because they have no differential. So I had to load it up and haul it 35 miles to a place where I could ride it, unload it, then load it back up, bring it home, and unload it again. I had to spend money on a loading ramp, tie downs, a large rack for the ATV so I could carry food, water, stuff to fix flats, and extra fuel for all day rides out in the desert. At first I loved it, and tool it out every weekend. But the toll of all the loading and unloading, driving 100 miles in a weekend in a truck that got 10 mpg finally became too much. I wound up selling the quad to a relative at a big loss, then I sold the truck because I could no longer afford to put gas in it. I now ride a Yamaha XT225 with a rack and oversized gas tank. This is a small dual sport motorcycle that can be ridden to a place to ride it off road, and is also great around town transportation.

    So ATVs were not for me, but the market is there. But like I said, brand name is a big part of that market. People will buy a Genuine or Kymco scooter, but probably not an ATV. Scooter people tend to know what is what when it comes to scooters, but ATV and dirt bike people will immediately thing "Chinese junk" when they hear a name like Kymco, because they have never heard of it. I mean, KwangYang Motor Company certainly sounds Chinese to someone who doesn't know about it.
    #23
  4. jeffgrig

    jeffgrig jeffgrig

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    Kenny, I have had the same dream as you about a scooter store - and as irony would have it - I live near and work in Naperville.

    Unlike you though, I decided not to pull the trigger on it. So let me share with you how I envisioned my scooter store and the business model I had that you may ....or may not...want to use.

    Eerily like you as well, I was a realtor and broker/manager before I left RE, so i think we are on the same page. I am also a scooter enthusiast and have had a plethora of scooters in my riding life....and always looking for more of them.

    So, with a conservative business sense and scooter knowledge, let me share my thoughts.

    I would look for the smallest retail space possible - as close to walk in traffic - in an effort to reduce cost. It would be a 'boutique' scooter store focusing on sales, service and rentals with high, personal customer service.....as residents in Naperville expect and demand.

    My small showroom would have a few models....and I would endeavor to either have a Vespa dealership, or carry used Vespas scoots and accessories to cater to upscale scooter enthusiasts. I imagine residents buying (or leasing) scooters for their kids in college. I would also deliver and pickup those college-bound scooters and store them if needed during summer breaks (all part of a service contract in advance).

    I would only sell quality scoots.... meaning, no cheap Chinese models. Easier to work on and get parts for quality Italian and Japanese scoots. Kymco would be an exception as they have a pretty good reputation. I would build a scooter culture in downtown Naperville: host scoot-ins, develop a scooter club with the store being the sponsor, etc.

    My premium new scooters would be at every social event in Naperville for promotions; at the River Walk, Rib Fest, Park District events, wine tastings, etc..I have many marketing and promotional ideas involving local Naperville dignitaries.....which I know. I would have a a huge presence at North Central University as well.

    Rentals during warmer weather is also a segment of the business. Self-guided tours of River Walk, some of the better blocks for nice houses, etc. These would involve classic rentals, such as 50 cc Yamahas and Honda Metro's. Good reputation for taking abuse. With logos on the scoots, this is a great marketing tool as well and the rental scoots traverse the downtown area.

    The business plan is to establish a 'proof of concept' by making the project cost effective and profitable in the first year. Ergo, reduce cost and labor cost and maximize sales, service, rentals and accessories. Used and restored scooters would also be a segment of the sales department. I would also offer winter storage of scooters (for a fee of course) even if i had to rent a storage site for that purpose. Our one van could pick up and deliver the scoots at the start and end of the riding seasons.

    I worked some numbers and it is feasable...although not easy. The key is to keep overhead as low as possible and hustle, hustle, hustle sales.

    Good luck to you and if you need any local help, let me know. Jeff
    #24
  5. safetywire

    safetywire Been here awhile

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    Kenny, Good Luck for sure.

    Many, if not most, Chinese companies start the warranty when they invoice you for the scooter, not when you sell it. Unless you plan on eating some of the warranty work, you'll have to keep track of the warranty status of each scooter as you sell it, this one has 6 months left, this one has 9 months left, etc.

    When you have a warranty claim, many, if not most, Chinese companies expect you to take the part off the scooter, find your original receipt where you purchased the scooter (not the invoice to the end customer, the invoice from the distributor to the reseller) and then ship the broken part back to them. This leaves you with a broken scooter in the shop taking up space and a not happy customer. Half of the time, three weeks or so later, they ship the bad part back to you (UPS Ground) and say "NPF" - "No Problem Found".

    Just an FYI.
    #25
  6. chazbird

    chazbird Long timer

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    I second or thrid or 4x idea of small, low overhead, space. My local scooter shop carries new and used Piaggio-Vespa-Aprilia (bikes & scooters) + -Kymco's. The showroom, accessories, and sales counter is very small; it holds about 3 bikes and 3 or 4 scooters - probably less than 500 sq ft. It is sort of boutique like, and almost crowded, but it, along with some choice historic Vespa decor gives you a enveloped in all things moto feeling. The rest of the inventory is in a big enough low fi basement just below, next to the good sized service area with 3 wrenches working.

    The used scoots and some new scoots are wheeled out each day from below and placed along side the shop, still visible.

    The area is in a higher rent zone, and he does well enough that he also has another similar shop 20 miles away in another high rent demographic - and oddly enough it apparently works well enough to keep them separate. Basically, even in a ride year round good scooter market like where I am I know he really breaks even, at best, on selling bikes; not surprisingly its service and accessories that keeps them afloat. Also, I would bet a Vespa franchise could be a pricey entry. The other scooter shop in the area is a big plate glassed ex car dealer about 9 miles away, also in a good demographic but with lower rent. Its all Chinese scoot shop, I don't even recognize the brands (Lance?) - although it appears to be about 4 or 5 different brand. They have garish paint and slogans on the windows which just adds to my reluctance to even go in to check it out for curiosities sake.

    If you are in a college or university town it seems one ought to carry some low priced 50cc scoots. I am near a major university and they make up about 50% of the all bikes parked near the university, probably several hundred on any given day.
    #26
  7. hugemoth

    hugemoth Long timer

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    Back in the 70s Piaggio opened a factory owned Vespa shop in San Francisco. The building they chose was a huge old bank building right on Van Ness Ave which is some of the most prime real estate in SF. 40' tall ceilings, chandeliers, marble floors, professionally decorated by an Italian designer. The service department scooter washing area was all done in Italian tile. I was offered the job of service manager for 3 times what I was making at another motorcycle shop and worked there for about 18 months until it was clear they weren't going to survive. Shortly after I left they pulled the plug and closed it down. My uncle's small shop 25 miles away survived. He always said the key was to owe the bank a lot of money so they didn't dare refuse to lend you more when you asked for it.
    #27
  8. Jim Moore

    Jim Moore Long timer

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    KennyT, you have a PM.
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  9. Dabears

    Dabears --------------------

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    Kenny-

    I spent Thanksgiving in Naperville (have lots of relatives there) and I grew up a few miles away from there so I know it well.

    Downtown Naperville is way busier than it used to be (like you don't know:rofl). Parking is a premium, and scooter people are going to need space to unload pickups and trailers for scoots that need repairs, or need to be trucked home after purchase. I saw nothing that had that kind of set up in downtown proper.

    You mentioned the many strip malls that are vacant due to the tanked economy. These make good sense- many will have cut rate leases, decent parking out front, and doors in the back big enough to bring scooters in for service. I have a feeling this makes much more business sense that to be in a boutique store across from the Lantern. You're not selling ice cream cones after all-

    Hope you find a good brand to sell. The comments about selling upscale to suit your clientel are wise. You're lucky to live in such a wealthy community, although it means they will be way more demanding than a chinese scooter shop in some place like Lombard or Addision.

    FYI- the Vespa dealer here (one of two) sells Genuine and SYM in addition to the high end Vespas- This pretty much means he's got something for every price point. And they share the space with a high end used car dealership (think BMW, Benz, Jag) to help leverage costs. I believe both are owned under the same umbrella. Pretty slick.

    This also helps with the issue of foul weather business.

    Hope all works out great for you. I'll keep my eyes open an hopefully come visit your shop next Thanksgiving!
    #29
  10. JerryH

    JerryH Banned

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    I think Vespa has some pretty lofty requirements for their dealers. Japanese scooters are out, at least new ones. To become a Japanese dealer, you have to carry their whole line, which includes motorcycles, ATVs, personal watercraft, etc. and you must meet certain quotas. I agree about staying away from Chinese crap, it will ruin your reputation quick. But there are still several "scooter only" brands left. SYM, Kymco, Genuine, Adley, Lambretta, Aprilia also allows dealers to only carry their scooters, without having to deal with high dollar sportbikes. The Lance Cali Classic also seems to be popular around here, and also seems reliable. Lance used to be Chinese, but I understand the Cali Classic is built by SYM. Kymco alone has a scooter that would suit just about everybody, from 50cc to 500cc. They seem to be the most dealer friendly and customer friendly scooter company around.

    I could not afford to open a dealership, I don't have the capital. There is a ton of expenses up front. You have to acquire a building, make all the necessary repairs and modifications, it has to pass city inspection for a commercial building, You need all kinds of expensive permits, You need utilities, you will need to have insurance to cover the building and all it's contents, including the scooters, tools and equipment, parts and accessories, etc. Because you will be working on motor vehicles, which involve gasoline, there are special requirements and insurance will be higher. You will need an alarm system and a company to monitor it. If you have employees, you will have to pay benefits and unemployment insurance in addition to their salary. I would start out with a part time mechanic and see where things go. Scooters come in crates and have to be assembled, which should be part of your overhead. Once you become known as a "fee" dealer your reputation is ruined. You will need to set up a connection with the department of motor vehicles so you can put plates on scooters and do the title work. You will probably need the services of an accountant. You will need to pay for your tools, parts, and scooter inventory up front. And on top of all that, at least in the beginning, you will need some form of advertising to et people know you exist, and you will need a decent web site, and..........
    #30
  11. tortoise2

    tortoise2 Been here awhile

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    and an "obit" when you close . . example.
    #31
  12. redhandmoto

    redhandmoto Been here awhile

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    yeah. And he could get hit by a bus, too; or suddenly develop a galloping malignancy, suffer a myocardial infarction. So the global economy is for shit; so times are so unstable and unpredictable that solid dealers who know what they're doing - like NoHo - are forced out anyway.

    The OP is not a fool; he's a businessman - and a successful businessman in that specific market - who seems very well aware of the realities, and moreover able to capture and integrate the things about the scoot-shop biz he may not know. And to factor them in according to his well-founded understanding of all business. The man is doing his homework.

    WTF is life without hope? Without a calculated & careful run at the odds? I'll tell you: it's reduced to smirky and empty one-liner 'obit' quips that defeat joie d'vivre.

    This whole deal may be entirely untenable, and yet...in a time of rapid die-off of the independent bookstore in this country, of a wholesale shift to e-books, I know people who opened a book shop 18 months ago, and who are making money hand-over-fist.

    Let us not, in ways clever or otherwise, start counting the house at the OP's funeral. Honi Soit Qui Mal Y Pense.
    #32
  13. vtwin

    vtwin Air cooled runnin' mon

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    My glass is half full, I say go for it!:D
    #33
  14. bandito2

    bandito2 Been here awhile

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    That's what an optimist would say. A pessimist would say it is half empty. A realist would say it is twice as large as it needs to be. In any event, I say forge ahead with your ears and eyes open, and do have a bailout.....er .... exit strategy in place as well.:deal Hope for the best, but be prepared for the worst in order to effect a minimizing of a possible financial/legal downturn. I applaud your efforts.:clap May good fortune shine upon your endeavor.
    #34
  15. Brooktown Geezer

    Brooktown Geezer scooter guy

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    Just curious: does anyone here know of an independent new scooter retailer who has been in business for more than 5 years, does not sell the Vespa brand, and has no other means of support? I don't. I've seen a lot of them come and go, but I'm not aware of any thriving scooter shop offering second tier brands who can make a profitable income solely from sales and service of new scooters. Loving scooters and thinking it would be a fun business and "hope" is not enough. You need a solid and realistic business plan, and most likely once the hard work of developing a business plan is done, that's all the info you'll need.

    The last one I knew of just announced they are closing their doors, and they enjoyed a great reputation and a large metropolitan market (Los Angeles.)
    #35
  16. Chindog

    Chindog Old Guy

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    I got my Aprilia at Twist and Scoot in Atlanta. They have been in business since 2003, and sell only new scooters other than Vespa. They carry Kymco, Genuine, and Aprilia, but they are an authorized service center for Vespa and Lambretta. And they also sell electric bicycles, but I've never seen more than a couple of them on the showroom floor. No ATV's or motorcycles, though.
    #36
  17. tortoise2

    tortoise2 Been here awhile

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    On the other hand, the Pep Boys affiliation with Baja Motorsports still seems to be working.
    #37
  18. Brooktown Geezer

    Brooktown Geezer scooter guy

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    Scooters are not driving Pep Boy's business, so in effect you just proved my point. There are scooter shops that make it around the country, but most have a primary engine that drives their business, like internet sales of parts, motorcycle sales, etc.

    The OP wants to open a scooter shop and exist solely on the sale of new, second tier scooters and service of same. If he mirrors the strategy of hundreds of other shops that have tried that recipe, his outcome will likely mirror theirs too unless he has built a business plan that includes other revenue streams.
    #38
  19. Bronco638

    Bronco638 Nobody Home

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    Kenny, this is the scooter to which I was referring in my PM to you. For everyone else; I recently took a trip to France. In Paris, I think scooters/bikes are almost as prevalent as cars (about a 60/40 car-to-bike ratio). Scoots and bikes are allowed to filter and lane-split. Rush hour is basically a stop-light drag race (that is, crazy/nuts). I'm willing to bet that if you ride a scoot/bike, you're easily home an hour before your neighbor who drives.

    Most, if not all, scooters have hand mitts and skirts. I bought a pair of Tucano Urbano hand mitts and put them on my Reflex. They are awesome and have allowed me to ride, with my mid-weight gloves, in 20ยบ F morning temps since my return. The skirt stays in place when you ride, keeping you warm (out of the airflow) and dry (if it's raining). There must be helmet laws in France because I did not see any helmet-less riders. However, they do not seem to like to wear any other moto specific gear (jackets or pants). A lot of women ride scoots as it's common to see riders with fur-rimmed hooded jackets and high-heeled boots. Both Tucano Urbano and Bagster (a French company) make hand mitts and skirts (among other accessories). The TU hand mitts seem to be most popular while the Bagster skirt is most often seen. I know Bagster's US distributor is in Naperville (I contacted them when I was searching for soft luggage for my TransAlp).

    Since scooters seem to have a reputation as being "summer" transport, if you could make them a little more weather impervious, they might be viewed as a viable three season option.

    [​IMG]
    #39
  20. hillbillypolack

    hillbillypolack Grumpy Old Goat

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    Why are there two threads for this?
    #40