Profit Margin In Two Wheeler Dealership
Bike dealership business has always remained a successful business idea in a market like that of India. Maybe because it's economic, fuel-efficient, and suitable for Indian traffic, people in India prefer to buy a two-wheeler, mainly bikes, before they plan to buy a car. Moreover, there is a kind of craze for bikes among the youth in the country. If you look at the Indian bike dealership market, you will find that these are not just the metro cities where motorcycle dealers are running a thriving business but even in small towns or the rural areas. It really inspires us to launch a bike dealership business. However, like all other businesses, a bike dealership business has its specifications and hiccups. But then, if you have chosen the right brand based on your area, can build the right business model, and have a localised marketing approach, you are good to go with the business. In this article, we have piled up all the details to help you get a bike dealership effortlessly. So, let's go through these details one by one.
Market Potential: How Lucrative Bike Dealership Business in India is?
Did you know the two-wheeler sales in India reached an all-time high as of 2019 when India's auto industry sold some 21 million units? This figure is almost double the 2011 sales when just 11.77 million two-wheeler units were sold in India. Moreover, if you look at the sales of premium motorbikes in India, it recorded a seven-fold jump in domestic sales, reaching 13,982 units during April-September 2019, making India one of the biggest two-wheeler markets in the world. So, you can't doubt the market potential of a bike dealership business or why it is one of the most lucrative businesses in a market like that of India. Moreover, new models with powerful features & styles are consistently being introduced by the manufacturing companies accelerating the bike market growth even more.
Capital Investment: How Much Cost is involved?
Like any other business, the first thing that bothers is how much capital you will require to invest in a bike dealership business. Usually, launching this type of business involves a good capital investment. The two high costs are securing a vast space in a prime location and arranging the stock. Paying for utilities and compensating the staff are somethings that are there in every business, and a bike dealership business is no different.
Franchise Registration: The Application Procedure for Getting the Bike Dealership
When you are good to go with the costs involved, you will require to apply for the bike dealership on the official website of the bike manufacturing company you want to franchise with. Let's say you want to get a bike dealership from Royal Enfield. The first thing you need to do is go to their official website and fill in the application form for a dealership or franchise registration. It would ask you to fill in the information like your name, email, contact number, address, type of dealership, an interesting city for the dealership, and so on. Once you have submitted the form after filling in the right information, someone from the company will contact you over the phone or email.
Business Model: Choosing the One That Suits You
In India, there are two types of business models for those who want to start a bike showroom, and that is:
The model requires you to invest significant capital and have vast space to have a showroom for selling bikes and a workshop for offering repair & maintenance services.
Authorised Sales & Service Center (ASSC)
Though it requires a little less investment, you would again need two establishments, a showroom for selling, and a workshop for servicing.
Based on the funds you have and the space available with you, you can choose one of the two business models. Remember, there is a minimum distance that is being maintained between two selling outlets by the bike brands. So, before you settle on anything, check whether you would be able to open the showroom in the given locality or not.
Also Read: Cycle Brands in India
Business Plan: Building the Right Strategy
This one won't take much of your time and effort, for the motorbike dealership industry is believed to be highly organised. In fact, at the time of franchise registration itself, the bike manufacturing company lets you know in & out of the infrastructure and vehicle lifting process. So, creating a business plan isn't at all bothering. However, you may require to put in all the time & effort you have saved in building the business strategy in creating the marketing plan. A bike dealership business requires you to run effective brand awareness and sales promotion campaigns. Opening discount is something that every business offers, you can offer more schemes & benefits initially apart from this.
Location Assessment: How to Choose the Perfect Location?
The location happens to be one of the most crucial factors for running any business successfully, and a bike showroom business is no different. Some of the factors that you need to consider while choosing a location are:
- It should have space for a broad front window
- It should have an easy parking facility
- There should be dedicated spaces for selling counter, accessories as well as the insurance desk
Whatever business model you have opted for, you would be informed about the space requirement by the bike manufacturing company also.
Registration & Licensing: Register Your Business and Get Trade license
Like all other businesses, you must get your bike dealership business registered. If it's a small counter, even the proprietorship option will do. In case you have big plans and want fund investment from other people, you can launch the business in partnership and consider either Pvt. Ltd. or LLP option.
Once your bike dealership business is registered, you need to get the Trade License from the Town's Municipal Corporation Authority. You need to open a current bank account if you don't have any and apply for GSTIN for paying the tax for your business.
Outlet & Resources: Setup the Bike Showroom and Manage Resources
We have already discussed before the showroom physical store plan in the location assessment section regarding the front space, dedicated selling points, finance, insurance, and accessories counters. As far as the vast front space where you showcase the bikes is concerned, it approximately occupies half of the total carpet area. Moreover, there should be more than two selling points. Though you can keep the interior of your choice, put more focus on making the showroom bright. Pay extra attention to lights, flooring, and wall colour. About the air conditioning, it should be according to the season. Proper sitting arrangements and comfortable chairs are a must.
As far as maintaining records and stock is concerned, you are provided with a software solution by the motorcycle company itself in most cases; if not, you can make use of a POS. Coming to human resources, you should hire experienced and skilled professionals who can easily handle the customer query.
Business Promotion: Effectively Endorsing the Bike -Showroom
Mainly, there are two ways you can promote your business and that are online & offline. Forget about the urban people; even rural India uses digital platforms for multiple purposes, and that you must leverage the digital platforms for connecting with your target audience. Go online! Get a website and promote your website through various channels like search engines, social media, paid advertising, etc. Now comes offline advertising; you can give ads in local newspapers, radio stations, and television channels. Though rural people are on digital platforms, for them, you can additionally launch a Bike Fair or, say, a Bike Mela. You can distribute flyers and pamphlets as well. Moreover, don't forget to provide your customers with easy finances.
As discussed above, the Indian motorbike market is experiencing a double-digit growth rate in sales. It is undoubtedly the right time to start a bike dealership business. As far as bike manufacturers are concerned, there are many big brands like Royal Enfield, Hero, Yamaha, Honda, TVS, etc., that you can take dealership of and earn a good profit. All you need is to abide by all the guidelines we have discussed in this article and get huge returns on even a single penny that you invest in this business.
|We hope our article answered all your questions. To get details about other franchise businesses in India, you can visit these linked articles:|
|Hero MotoCorp Dealership Cost||McDonald's Franchise Cost||Asian Paints Dealership Cost|
|Subway Franchise Cost||Starbucks Franchise Cost||Naturals Franchise Cost|
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Q. Is bike dealership profitable?
Ans- In India, if you own a bike dealership your monthly profit can easily come around 4 Lakh per month. Which can mean your annual profit coming around 60 Lakhs. In terms of ROI, you can calculate them based on your monthly profit margins.
Q. How much does it cost to open bike showroom?
Ans- To open a bike showroom is to spend at least five to ten lakhs in the sector in India.
Q. What is the profit margin on bikes?
Ans- Profit margin on bikes can range from anywhere between 10-12% on monthly basis.
Q. Which month is best to buy a bike?
Ans- In India the best month to buy a bike is during festivals like Diwali and New Years as many brands venture out hefty discounts during this time.
Q. How much a bike showroom owner earns?
Ans- The general two-wheeler Dealership Margins ranges from 50,000 to 75,000 Rupees for Scooties and for Bikes the per margin profit ranges from 75,000 to 1,00,000 Rupees. The dealer margins range from 4% to 7% depending on the brand and its authenticity of being a domestic brand or an imported vehicle.
Q. How much does it cost to start a bike dealership in India?
Ans- The investment cost to start a bike dealership in India ranges from anywhere between 30 to 50 Lakh rupees.
Q. What are the documents required for new bike?
Ans- The documents required for any new bike in India are as follows:
- Proof of Identity: Driving License, Voter ID, Passport, Aadhar Card, and PAN Card.
- Passport Size Photographs
- Address Proof: Utility Bills, Bank Statement, Driving License, Passport, Voter ID or Aadhar Card.
- Income Proof: ITR (Income Tax Returns), 3 months bank statements.
Q. How can I get bike dealership in India?
Ans- Like all other businesses, you must get your bike dealership or two wheeler dealership business registered. If it's a small counter, even the proprietorship option will do. In case you have big plans and want fund investment from other people, you can launch the business in partnership and consider either Pvt. Ltd. or the LLP option.
Q. How much profit do motorcycle dealers make in India?
Ans- Indian motorcycles give a profit margin of 7% while international brands like Harley Davidson, Triumph, Yamaha, Ducati, and Kawasaki provide up to 10% dealer margin in India.
Q. How can I promote my bike shop?
Ans- Some best and proven ways to promote your two wheeler dealership in India:
- Use word-of-mouth marketing and multi selling channels
- Build online presence via Social Media Optimisation
- Curate your own online website to promote bikes