The business of a second-hand motorbike has a much greater reach than a new bike business. This is because of the availability of old bike for sale at a very low price. You may even get used bikes at half the prices of the new motorbikes. This attracts more people as it becomes affordable for them and they can have the latest and updated models. In this article, let's delve deeper into the requirements for opening a 2nd hand bike showroom.
Why is there a preference for Second Hand Bikes?
Having a motorbike makes it easy to commute, including long-distance travel. Many times people opt to buy second-hand mo torbikes. The sale of used bikes went up to 27% in 2021 indicating the scope of opportunities in old bike sale. Therefore, second hand bike showroom or dealerships can be deemed as profitable, especially since the pandemic as it’s easy to maintain social distance during travel.
To start such a business, it is good to have some mechanical engineering skills. If you don't have any, you may employ an expert mechanic to thoroughly inspect the old motorcycles before you spend your money on purchasing and selling them. But before you start this business, you must know about the specifications of running this business. To assist you in achieving your goal of opening a used motorbike showroom, we've put up a step-by-step guide that covers all of the essential aspects of running a successful business. So, let's go through the specifics.
Advantages of Buying a Second hand Bike
There are various advantages of buying a second-hand bike, such as:
- Lower Insurance Premium- Insurance Premium of second-hand bikes is less as the premium reduces with the age of the bikes.
- Reduction in Expenses- A second-hand motorbike is available at low prices in comparison to the new bikes. Even though the motorbike may be used for only a few months, there will also be a massive difference in its price compared to a new bike.
Present situation and future of second-hand motorbike market in India
The second-hand motorbike dealership has proven to be a profitable business, with India overtaking China as the world's largest two-wheeler market and the used two-wheeler sector developing rapidly. In India, three out of every ten two-wheelers sold are currently used vehicles. With 6.6 million units, the preowned two-wheeler market in India is greater than the whole new two-wheeler industry on the African continent. It has increased 20-25% each year over the last five years, according to estimates.
In the previous fiscal year, pre-owned two-wheelers accounted for around 40% of the new two-wheeler market. Furthermore, India's two-wheeler sharing market is 19.07% in 2021 which reduced from 25.18% in 2020. On the contrary, the scope for purchasing old motorbikes has increased significantly. Therefore, the value of motorbikes is expected to increase by 20.2% to $94 million by 2025, with a CAGR of 20.2% (2020-2025).
Ways of Earning Profit in a 2nd hand bike showroom
There are two ways in which you can do a profitable business of a 2nd hand bike showroom. One is to charge a commission from a client by helping them in selling or buying their bike. The second way is to directly purchase and then sell the used motorbike at a margin and verify the documents.
Points to keep in mind at the time of buying 2 hand bike
The following things must be ensured before buying a second-hand bike:
- State to which the motorbike belongs
- Total Number of Kilometers Already Driven
- Timely Insurance Payment
- Is the motorbike accidental?
Getting Knowledge about a Second-Hand Bike Showroom
Although no official or informal training is available for starting a used bike business, you may learn more about it through formal or informal training. Before formally entering this business, be sure you have all of the necessary information. People who have already succeeded in this field may be able to assist you to some extent. However, always contact a committed and devoted person who is prepared to instruct you and give unbiased advice. There are various alternative ways and methods to manage a used motorbike business among which some may yield more results than others.
Contact seasoned store owners who may serve as your company mentor. If you take a cautious approach, you won't have any problems. Things are made easier by involving experienced franchises and conducting business in a wonderful team-building attitude. You can meet folks who have done it before and use their advice in your effort.
How to Start Your Business of Opening a Used Bike Showroom?
Creation of a business plan
The first and foremost step to start a business is to make a business plan. It is always better to have a detailed business plan strategy. It requires perfect planning from the beginning. Some loss is involved whenever you use hit and trial methods, and sometimes small losses add together to make a significant loss. It is preferable to learn from others' mistakes and not to commit those mistakes yourself. An excellent way is to create a business plan before starting a business. While making the plan, you must analyse the mistakes done by others and always define your do's and don'ts of running a business.
Choosing a business aim is the first stage in building a company business plan. The primary objective of a second hand bike shop should be to provide 100% client satisfaction. Each happy client may lead to further referrals and even repeat business. The second goal you should set is to achieve or surpass profit margins during the first two years of operation. Happy customers will bring you additional sales, resulting in higher profit margins. Before drafting a business strategy, thoroughly research the facts and numbers in the sector.
Customer Focus should be the top priority in your second-hand bike showroom. Concentrate on giving your clients the most pleasant bike-buying experience possible. Please pay more attention to the quality of the motorbike you'll be supplying them with. Try to go above and beyond the customer's expectations regarding both the product and the experience. Employee welfare should be included in your business plan since your employees play a vital part in delivering revenue. It is crucial to give the employees bonuses and incentives for their efforts in generating sales for you.
For a bike second hand showroom, choosing the proper location is critical. Make sure the location you've selected for your showroom has a strong supplier network that will help you in the quick purchase or sale of high-quality used motorcycles at reasonable rates. You can acquire a second showroom for motorcycles by checking the classified section of your local newspaper or through internet buying and selling sites.
So, how much money is required for starting the business of a second hand bike showroom? It is essential to be careful in the beginning as unnecessary expenses should not be incurred. There are various costs involved in the starting days of the business, such as:
- Cost of complying with the legal formalities for starting a business.
- Rent for the old bike showroom.
- Prices of furniture and desks to be used in the showroom.
- Cost of other equipment such as telephones, computers, fax, printer, etc.
- Expenses to be incurred for promotion of the business, such as advertising and marketing.
- Expenses for Stationery and other office supplies.
- Cost of Consultancy charges of the accountant.
- Analysis for the finalisation of the location of the used bike showroom.
The place you select should make purchasing and selling high-quality used motorcycles at attractive rates simple. It would be great if you do some study on whether or not the people in that area can afford a used bike. When choosing a location, consider the local laws of the area or state, demography, and accessibility. In such a location, there should not be a second-hand bike showroom. Before deciding on a site, consider parking space availability as well as safety and security.
License Requirement for the Second Hand Bike Shop
It doesn't matter if it's a second-hand motorbike dealership or not; as long as it's a company, it needs to be licensed. To gain legal authority to operate your second-hand bike showroom, you'll need to secure a dealer's license. People usually avoid buying a motorbike from a dealer who does not have a dealer's license. Having a dealer's license makes your showroom a more trustworthy source for buying and selling motorcycles. The procedure for obtaining this license, however, differs from state to state. To get one, you need to con tact the municipal corporate authorities in your town.
Promotion of the Business through Advertisements and Marketing
Marketing and advertising are critical to the success of any organisation. You have two options for marketing and advertising your used motorbike showroom: digital and offline. Because of the widespread use of smartphones and the internet of things, digital marketing has become a necessity. If you want your 2nd hand bike showroom to grow quickly, you must advertise it digitally. The first step is creating a website and promoting it through numerous channels such as search engines, blogs, and social media. You may begin offline advertising by placing advertisements in a local newspaper, radio station or by handing out brochures and flyers. It's also a good idea to place hoardings in key areas.
You also need to develop a business website for advertising your showroom where people can also book orders for motorbike purchases. When individuals inquire about buying or selling motorcycles, have them fill in their names, phone numbers, email addresses, and other pertinent information so you may quickly follow up with them.
The best aspect of opening a used bike showroom is that you won't need a large sum of money or incur significant expenditures. You can work full-time or part-time at a used-motorbike showroom. All you need is a systematic approach to managing your company. Furthermore, you may expect a positive reaction if you open a second-hand bike shop in a high-traffic area such as a highway, marketplace, or transportation hub. The motorbike showroom should be large enough to accommodate as many motorcycles as possible. Concentrate on product quality and the customer's bike-buying experience as a top concern. Customers that are satisfied and happy are more likely to do business with you again in the future. Buying or selling bikes without adequate documentation, investing too much money initially, purchasing bikes with severe maintenance difficulties, and so on are some of the blunders that one makes while running a second hand bike showroom. Therefore, use the strategies and principles mentioned in this post to become a thriving second hand bike dealer.
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