Saturday, August 1, 2009

Are Mini Bikes Toys for kids ?

Every kid grows up and sooner or later either has a bicycle or dirt bike depending on what the parents could afford. Back in the old days when your choices where limited to the Big 4 manufacturers like Yamaha, Honda, Kawasaki and Suzuki only the well off could afford hefty price tags of a few thousand to ride the beginner model pee wee 50 or 90. Back then some 10 years ago it was just too expensive for the beginner to get into motocross. The introduction of the Chinese Mini Bikes (Monkey Bike, copy of the Honda) it opened up a can of worms for the Big Japanese manufactures who had it sweet all this time with little or no competition in the bottom end range 50cc-100cc. The Chinese bikes flooded the market some six years ago in Australia and couple years earlier in the States. This basically cut out the low end market for the Japanese bikes and allowed newbie motocross riders to get into the sport at a entry level.

No real distribution channels were correctly setup because the Chinese would sell and anyone. Mom and Pop backyard operations sprung up like the plague all across America, Europe, Canada and Australia.

The Chinese pumped these out like hot cakes and thousands of containers of Mini bikes entered the shores. The Bikes were mostly made of reinforced mild steel for the frames, and recycled alloy hubs which were weak at he spokes. The finish was not great to begin and attention to detail took a back seat to pure volume.

Being that said the bikes were so cheap to get and the average kid could start on a 50cc or 110cc pit bike with all the protection and armor for under $1000. The bikes wouldn't last and basically became a throw away item. It was cheaper to replace the whole bike then it was to pay a mechanic to fix it. If the engine blew up you would rebuild it just throw away the old one and slam in a new one.

Kids and teenagers took to these bikes abused and destroyed them. They were not a machine to be serviced and maintained as they should but because they were so cheap they treated them like toys. Disposable toys like when DVD & MP3 players.

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.