Tuesday, July 28, 2009

Why Pit Bikes Became so Cheap to buy ?

The Pit bike craze some 4-5 years ago when they were first released in the market took the traditional Japanese bikes by shock. In fact most Dealerships that carried Yamaha, Honda or Kawasaki didn't think they would stick but when everyone started buying them it sporned a epidemic literally overnight. A whole new market was born.

Here's where it went all wrong. See 99% of Pit bikes are made in China. Yes, that's the truth. They are made in china where 70% of the worlds goods are made. There was no real distributor channels setup because the Chinese in there infinate wisdom will do anything to make a buck so they sell to anyone who will "show them the Money". So basically you could source Pit bikes from China or steal your competitors supplier and start bringing them in yourself and sell them at a lower price. Cut your competitors throats and many flyby backyard operations killed the market big time. Now any Joe Blow can get the sames bikes work out of home and sell them dirt cheap. Back in the hay days I know several importers in Australia (who will remain nameless) that brought them in and sluted the market to make a quick buck.

They sold them on eBay by the hundreds of thousands. The number of eBay sellers who sold Mini Bikes quadrupled on both US and AU eBay. So all of a sudden everyone is flogging off these little puppies and making $25-$50 profit just so they could screw they're rivals. The some ebay sellers in Australia would sell 300-1000 bikes per month. Now if you check ebay under Dirt bikes>other , you'll see alot are listing them at Buy it Now or Starting at there lowest profit margin for example $599.

In the end everyone lost except the consumers. It was and still is a consumers paradise. They go so cheap that the supply out weighed the demand because every man and his dog had in sitting in the shed.

The demand is still and will always be there because a certain target market predominately blue color working class society needs entry level bikes to learn how to ride.

Gone are the days where importers would make 200-300% profit on a item, now its more like 30%- 50% after expenses. There are some small variables that influence the price over time like exchange rate , availability and seasons but most definitely it is Supply vs Demand.

No comments:

Post a Comment