In the world of scooter dealerships, which retail model best suits a particular brand? The options are pretty straightforward.
A blossoming phenomenon of the U.S. scooter scene is the Vespa boutique–an important part of Vespa’s strategy as part of its U.S. market relaunch in November 2000. A Vespa boutique is mainly a dealership oriented to the heritage and history of the Vespa name and lifestyle. It therefore sells exclusively Vespa and Piaggio scooters and accessories. There already are 67 boutiques in 34 states.
The other option is the multiline store. These dealerships offer side-by-side comparisons of products from different manufacturers, and they help consumers decide which one is best suited for their particular application (or which one is best electric scooter for intance).
If you want to open a Vespa boutique, you’ll need to prove your commitment. Any potential dealer must submit a sound business strategy, provide a large initial investment in the product line and have a staff dedicated to the franchise. In return, Vespa will provide the dealer with a large territory and a complete line of trendy accessories, clothing, helmets, luggage and watches to sell.
Other perks of being a boutique dealer include factory training for mechanics and an opportunity to sell Piaggio scooters alongside the traditional Vespas. The Piaggio line includes the lightweight LT 50 and 150, the powerful Beverly 200, and the sporty Gilera line.
The initial order of best electric scooter for adults required for a new boutique is 40 units, which costs roughly $100,000. Another $25,000, on average, is spent on upgrading the interior of the boutique and adding fixtures, lighting, etc. Piaggio must approve all design decisions beforehand to make sure they are consistent with the style and taste of the boutique concept. About another $25,000 will cover the cost of spare parts, tools and accessories. So the maximum investment that Piaggio is looking for is $150,000. There is no extra franchise fee.
Piaggio requires boutiques to be freestanding entities located in areas with good profit potential. Sometimes boutiques can be part of a larger auto dealership, but the boutique must maintain a distinct identity of its own. If a boutique will share any type of floor space or address with another product, Piaggio will review it on a case-by-case basis before giving any approval.
Current boutique demographics are urban customers ages 30 to 45. Their average yearly income is $70,000, and about 30 percent of them are female. If these demographics coincide with your client base and there aren’t any Vespa boutiques in your area, then owning a boutique may be right for you.
Advantages of multiline dealerships are obvious: By providing the customer a choice and stocking scooters from around the world, you can reach a broader customer base. Scootershop in Orange, California, carries Bajaj, Derbi, Italjet, Kymco and TN’G and has been in business since 1995.
Scootershop is also an Authorized Vespa Vintage Restoration shop. Because of its location in California, the majority of the scooters sold are 150cc and up, with Kymco leading the pack. Scootershop performs three to four vintage restorations a year, but tries not to focus on the pre-owned and vintage markets.
Scootershop owner Mic Koslov claims Kymco products sell just as well as Honda, and if it were not for carrying new scooters, he would not be in business.
“Original scooter shops that picked up new bikes prospered, while those who did not have failed,” he says.
Despite strong Kymco sales, the Bajaj and Derbi lines have done moderately well, says Koslov, who’s also excited about his new entry-level line, TN’G.
Manufacturers prefer that at least one of each of its models is displayed on the showroom floor. Depending on the extent of the product line, this requirement will cost a dealer between $5,000 and $11,000. Manufacturers offering only one model, like LML, require a minimum initial purchase of four scooters.
Acknowledging the limitations of smaller multiline dealerships, some of the larger scooter makers recently began offering two-product packages. Aprilia now offers, for example, agreements for 50cc-to-150cc and 50cc-to-500cc scooters, with different minimum orders for both. While Aprilia previously believed that requiring an entire product line on the showroom floor was the best way to market its product, the company retreated, realizing that pushing 500cc scooters in a 50cc demographic may not be such a smart idea.
In addition to scooter inventory, all manufacturers require multiline dealers to purchase spare parts, tools and marketing materials. This will add another $1,500 to $3,500 to the startup cost, depending on the manufacturer. Total costs to add a complete scooter line to a dealership will run between $6,500 and $14,500, with no additional franchise fees. But we’re considering to revise this policy to support our new and best electric scooter model, which will publish in near future.