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Originally Posted by RiderZone The ideal purpose of buying a used bike from a dealer/broker is to take some of the risk and hassle out of the equation. They are the experts in checking the bikes's history and condition, supposedly, so should help you stay away from lemons. .............And of course there's always the plague of influencers around, who will "buy" from and promote these places, even if they witness a human sacrifice happening inside. |
@Riderzone, very well said. You have concisely explained what is the current problem with the used bike market.
I want to shed some light on why the market has become so skewed and sketchy. Below is a summary which I hope helps all forum members.
The used bike business traditionally was not a very lucrative business. There were a few dealers who sold 2nd hand bikes on the showroom premises, either as park and sale or bikes that were returned by the seller who upgraded.
The market has picked up steam once you have banks and NBFIs offering loans for used bikes, a flood of bikes sold back to dealers after the BS4 / BS6 conversion and Covid with people eschewing public transport for private.
Outside of showrooms, most used bike dealers in the North are more or less brokers who know the bike owners. Their model was simple. If a buyer had a particular bike in mind, he contacted the broker, who found the seller, and earned the commission (very similar to the matchmakers in traditional matrimonial services). The brokers have very limited capital, so they utilize that limited capital to pick up bikes that can be easily re-sold. As long as they can churn bikes quickly, they can meet overhead costs and make a tidy profit.
Some investors with deep pockets caught on to this. They realized that if they "invest" capital worth 2 - 3 crores with the brokers, have a decent warehouse, a FB / Insta page and marketing, they can increase the volume and make very healthy returns.
This has now started a vicious cycle. Investors want 30 - 40% return on the capital they lent to the broker. The broker goes and picks up random bikes without proper checks, beautifies the bike and peddles it to unsuspecting customers. Most used bikes sit for one month or less on the showroom floor. Some brokers are even fined or lose commission if the bike is not sold after 2 -3 months. If the broker stays ethical, he will fall behind on his commitment to the investor and ultimately lose business and be forced to exit.
And guess what, ethics goes out of the window when the monetary pressure piles up. Then you see the shady behavior coming out in full swing. The industry is a bit wild and the good profits have enticed even some small VC / PE firms to enter this market to provide funding capital.
This is one side of the coin.
Now, unlike the forum members here, who are knowledgeable, have a very good idea of the bike market and do their homework, the average used superbike buyer is a guy whose only criteria are 1) can he get the Dhoom bike or 2) can he get a bike that he can rev. They do not care about the model, the condition, the mileage. They just need a bike on which they can ride through their neighborhood and show off. And their decisions are influenced by vloggers and influencers. The latter capitalize on their fan base, and to stay relevant, work with the used bike dealers to promote their inventory, in exchange for nominal cash, or "ownership" of a superbike for few months.
Can the market be regulated? It's tough. Already numerous consumer forum complaints have been filed against these used bike brokers. There have been a few lawsuits also. But so far the effect is limited. When persons with deep pockets are funding the business, the law tends to turn a blind eye.
In full disclosure, I learned all this while setting up my own used motorbike company. I have seen how the market behaves and offered my own firsthand experiences.
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Originally Posted by AtheK Hmmm, I see that the SOP are getting ready real well, when is the big reveal |
@Athek, yes brother, I started my business. It is very hard work.
As per forum rules I won't be mentioning my company name or any details. I love the forum and don't want to earn the displeasure of the mods.
But I am more than happy to share relevant industry information for the benefit of forum members, especially those who want to buy 2nd hand bikes.