How Much Profit Do Motorcycle Dealers Make? [Tips & Fact]

How Much Profit Do Motorcycle Dealers Make

Motorcycle dealerships are a prominent profession worldwide. Anyone can pursue it as long as he can sell new and old motorcycles to customers. However, the initial stage is challenging and needs hard work to earn. Also, many are not aware of the earning potential of a motorcycle dealer. By the way, do you know exactly how much profit motorcycle dealers make?

Motorcycle dealers generally make a profit of 5 to 15% initially.  Once established, a motorcycle dealer can earn around 38% profit. To be exact, dealers can make a profit of around $5700 per month. However, the dealer’s connections and persuasive skills determine the profit margins.

There are several tricks and techniques to make motorcycle dealerships profitable. Here I will discuss all these aspects. 

7 Ways Motorcycle Dealers Follow To Make A Profit

Becoming a successful motorcycle dealer requires constant action. The dealership is basically increasing sales. And selling a motorcycle to a potential customer is not as easy as it may sound. The dealer needs to follow several ways and tricks to profit from it. 

1. Targeting Millennials:

A motorcycle is the most exciting vehicle for millennials. They buy motorcycles the most. So dealers promote and curate motorcycle features as per the demands of young generations. Dealers add a cool feature, a handy motorcycle, and a budget-friendly model for young buyers. 

2. Impressive Online Profile:

Offline marketing was effective previously. But most people now search online to find any materials, including a motorcycle. So without an impressive online profile, it is difficult to attract audiences. Motorcycle dealers, therefore, highly concentrate on promoting their businesses online. 

3. Referral Marketing:

Word-of-mouth or referral marketing is very persuasive as buyers refer the dealer to an interested buyer. For example, the dealer has sold a motorcycle to a customer. Now the dealer would request the buyer to refer his motorcycle to a potential customer. In return, the buyer would receive a discount or benefit. 

4. Hiring Skilled Salesperson:

Dealers generally don’t directly approach buyers. They hire salespeople to persuade the customers. If the salesman offers features that benefit the customer and add value, he only buys the motorcycle. So hiring a skilled salesperson is the key to making a profit. 

5. Follow Up:

The importance of following up with buyers and customers cannot be overstated. Dealers keep contact data of those who approach them through the website or in person. Even if he doesn’t buy, the dealer stays in touch and follows up. This is how conversion rates are increased.

6. Measuring Conversion Rate:

Monitoring the conversion rate is essential to know how many motorcycles the dealer sells every day or week. This would help the dealer measure the effectiveness of the campaigns and the skills of the salespersons. The dealer can train the salespersons accordingly and increase sales. 

7. Customer Support:

Providing customer support helps dealers make long-term bonds with the customers. When a dealer supports the buyer, it creates a positive impression. This makes it easier for the dealer to promote the motorcycle further to new customers. 

Read more: How to buy a motorcycle with a credit card?

5 Tips That Will Help A Motorcycle Dealer Earn More Profit

I have closely observed motorcycle dealers and learned their unique strategies. From those observations, I have acquired some excellent tips that can help a motorcycle dealer earn more profit. 

Tip-1: Arrange Promotional Events

Arranging or participating in promotional events attracts new customers. Dealers should attend local or national automobile promotional events to reach new buyers. The dealer can arrange one too to let people know about his motorcycles. The promotional event is a huge scope to reach the mass and grab attention. 

Tip-2: Display Online (Videos)

Displaying motorcycles online is an excellent way to attract audiences. Dealers must make exciting YouTube and social media videos highlighting the best features of the motorcycle. Keep promoting these videos to stun the viewers. Effective video promotion increases sales. 

Tip-3: Discount Offers

Dealers often offer discounts to loyal customers and even new buyers. The discount can be very small, but it sure impresses the buyer. Discount offers easily increase the conversion rate. I mean, who doesn’t love to get a motorcycle at a discount?

Tip-4: Pitch A Relatable Product

The dealer must pitch a motorcycle that matches the customer’s demand. When a buyer wants a budget-friendly motorcycle, you should show an affordable motorcycle. But for luxurious demands, pitch a premium motorcycle. That is how it works the best. Show the motorcycle that the buyer wants to see. 

Tip-5: Think Profit

Never compromise with profit. Just for the sake of selling, don’t sell it at a low price. Or don’t pitch an affordable bike to someone who can afford a premium bike. Think of earning a profit and selling as per that. But don’t be desperate either. Be natural but ensure you get profit from each motorcycle.

Sales Of Motorcycles In Various States: More Sales Bring More Profit

The sale of motorcycles is different in different states. If you plan to become a motorcycle dealer, you should probably know the sales rate in various states. Here is a chart that shows how much a dealer sells motorcycles per year in each state. The more the sales, the more the profit.

StateAverage Motorcycles Sold
New York384,620
Michigan 237,481
Washington 221,448
Indiana 209,824
Georgia 207,857
Iowa 191,804
North Carolina189,680
Virginia 184,441
Colorado 179,086
Tennessee 177,270
Arkansas 169,797
Massachusetts 138,123
Oklahoma 133,895
South Dakota129,769
Missouri 126,706
Utah 123,924
Oregon 123,617
New Jersey121,379
Arizona 121,074
Alabama 114,901
South Carolina114,514
Louisiana 101,490
Kentucky 97,156
Kansas 90,643
Connecticut 80,949
New Hampshire78,688
Nevada 69,536
Idaho 59,225
New Mexico54,946
Nebraska 50,373
West Virginia43,529
Maine 38,340
North Dakota36,234
Mississippi 30,573
Vermont 28,982
Wyoming 28,488
Alaska 26,781
Hawaii 26,203
Rhode Island23,607
Delaware 4023
District Of Columbia3567

Related Questions:

What Is The Motorcycle Dealer Margin?

The motorcycle dealer margin is the difference in price between the cost the dealer pays to buy a motorcycle and the price the dealer receives for selling the motorcycle. This difference is also known as the dealer profit margin. The difference between the buying and selling price is the dealer’s profit. 

The dealer profit is negotiable by the customer. But the profit is generally not too high, so cutting it off doesn’t happen much.

How Many Motorcycle Dealers Are There? 

In total, there are about 7000 dealer establishments in the United States. The annual profit that comes from motorcycle dealerships has spiked from $8.3 million in 2018 to $30 billion in 2022. The revenue growth is huge as motorcycle dealerships, and selling rates have increased noticeably. 

All over the States, the maximum profits by motorcycle dealerships are earned in California, followed by Florida, New York, Ohio, and Pennsylvania. The lowest profit by motorcycle dealerships is earned in the District of Columbia.

What Is The Average Profit Margin For A Bike Shop?

According to reports, a bike shop has a profit margin of around 36%. A bike shop earns this profit just by selling bicycles. But the profit margin is more when combined with other cycling accessories like water bottles, cycling gear, helmets, clothes, etc. 

When the profit margin of bikes and accessories is combined, the profit bike shops earn on average is 42%. In general, the maximum profit range is between 40 to 45%. The lowest profit margin for a bike shop is from 20 to 25%. 

Which State’s Motorcycle Dealers Make More Profit?

Motorcycle dealers in California earn the maximum profit from selling motorcycles. Reports say that dealers in California sell around 785,424

motorcycles annually. After California, Florida is the second-largest motorcycle dealing state selling 620,077 motorcycles per year. 

Followed by California and Florida, states like New York, Ohio, Pennsylvania, and Montana are among the largest motorcycle-selling states. The lowest profit from motorcycle dealing is earned by states like the District of Columbia, Delaware, Rhode Island, Hawaii, and Alaska. 

Why Do Motorcycle Dealers Make Such A Lot Of Profit Every Year?

Motorcycle dealers make a lot of profit as they mostly target the young generation. The new generation is motorcycle riding enthusiasts, and the dealers mostly help them to buy affordable and suitable motorcycles. Due to dealers’ online presence, they are reaching out to more potential customers.  

Besides the millennials, motorcycle dealers reach out to people between the 30- 45 age group. As more minimalist and versatile motorcycles are available, motorcycle dealerships are becoming profitable with time. 

Should You Be A Motorcycle Dealer?

If you have excellent selling skills and detailed knowledge of motorcycles, you should think of becoming a dealer. Motorcycling enthusiasm is not enough to become a dealer. You should have the patience and skills to approach and sell motorcycles to clients. 

Besides, team management, training salespersons, and maintaining contacts are some skills you would need to become a successful motorcycle dealer. If you believe you can stick with it and work passionately, you may think of becoming a motorcycle dealer. 

Final Verdict:

The profit motorcycle dealers make depends on their selling skills and consistent hard work. Starting can be challenging. You would need a license, strong contacts, and effective strategies. But once you establish a position, there is no looking back. It is indeed a profitable profession if appropriately pursued. 

If you decide to become a motorcycle dealer, follow the tips and ways I have mentioned. These tricks would help you promote your dealership business and earn more profit. 

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