posted by Bob | May 08, 2011 | link
I don't like to toss around words like crisis or panic without a very good reason. I especially don't when it comes to scooters. But after a Minnesota spring that has not been great in terms of average daily temperature, we finally saw a couple of decent days in a row and sales just exploded!
Supply: How it works.
Every fall, usually in October or November, scooter dealers are required by their suppliers (Genuine, Kymco, Piaggio/Vespa in our case) to place orders for the upcoming year. Using a complicated metric of tea leaves, Ouija board, prior years' sales data, and current inventory, we come up with the formula of what to order. We take the over-all order and specify which scooters we want in which months. The monthly order usually comes to us in the second or third week of the month. We order the most scooters for the months that have the strongest sales data. In Minnesota that has been heaviest in May and June.
Mother Nature's role.
The earthquake and tsunami that devestated large areas of Japan also took a toll on their power grid, requiring periodic power shortages throughout the country. Although we do not sell any Japanese manufactured scooters, many Kymco models use parts that come from Japanese factories. We are sold out of one of our most popular 50cc models, the Kymco People 50. They are not able to tell us when they will be available, but our May allotment will not be fulfilled.
When gas prices go up, scooter sales follow.
We saw it happen in 2008 and it is happening again. Gas prices are hovering around $4 per gallon and, depending on whom you're listening to, predicted to go up (or down). Those fuel prices drive up the demand all over the country and in the warmer climates, scooter dealers bought up the remaining 2010 inventories that distributors had in their warehouses.
How about those inventories?
I just came across a fuel receipt from November 1, 2010 when premium was selling for $ 2.99 a gallon. That was when we were putting together our 2011 scooter orders. Inventories were a bit higher than we like to see them at that time of year and 2010 sales figures were well off the all time highs of 2008. Oil prices had not seen much upward movement, awaiting some positive word about the global recession. Even the BP oil spill in the Gulf of Mexico had not had produced much upward pressure on the price of gas.
There was still snow on the ground when we began to notice a larger than normal amount of floor traffic in Scooterville. The inventory of scooters we thought would carry us well into May was getting bought up and forecasters started to speak of $4, $5, even $6 dollar gas. That's when we took a closer look at our orders for April , May, and June and noticed that there could be some shortage if sales kept up their pace.
The pace has kept up and we are already starting to see shortages, especially in the 50cc up to 150cc models. We're taking deposits for the next shipment of Buddies, and People 50s are sold out until further notice. If you're looking to upgrade to a larger scooter (250cc and up) this will be a great year to do so. Demand for the larger scoots is still a bit soft, while trade-in value for a used 50 or 125 cc should be strong.