Make Money Selling Electric Bikes

1
Make Money Selling Electric Bikes

• Light Electric Vehicle Association
• Ed Benjamin, Larry Pizzi

2
Exciting Opportunity

• Electric bikes remind me of what I hear was said
  about cars around 1910 Interesting, but they
  will never replace a good horse and buggy.
• The dealers that invested in cars, and taught
  their community to buy the new machines from
  them, have been the transport providers to their
  community through nearly 4 generations.
• A similar opportunity exists today Teach your
  community that you are the source for electric
  two wheelers. You, your kids, and your grand kids
  will benefit.

3
About the LEVA

• International association focused on the
  promotion of Light Electric Vehicles Electric
  bicycles, electric scooters, electric Trikes,
  etc.
• 112 members from 18 countries.
• Volume of gross sales of all members combined
  Nearly 500 million USD.
• LEVA members are making money and participating
  in the newest transportation industry already
  4th largest category world wide.

4
LEVA Board

• Chairman Ed Benjamin
• Executive Director Sid Kuropchak
• Board Members
• Larry Pizzi, Currie Technologies, USA
• Dr. Hon, Dahon Bicycle, USA and China
• Masao Ono, Tokyo RD, Japan
• Naveen Munjal, Hero Bicycle, India
• Eddy Eccleston, MUI, Tunisia
• Jack Oortwijn, Bike Europe, Holland

5
Mission Statement

• The Light Electric Vehicle Association's purpose
  is to provide services and assistance to light
  electric vehicle companies by helping to
  establish a favorable operating environment, by
  providing a forum for discussion and networking,
  an industry voice on non-competitive information
  sharing issues, and to assist them in the
  promotion of their business on an international
  basis.
• LEVA will standardize, track and analyze
  industry data by developing a glossary of terms
  and definitions and conducting surveys of members
  with follow up reporting to members.  As a voice
  of the LEV industry, we will develop service,
  quality and safety standards, as well as the
  standardization of performance.

6
USA Market
USA Sales in 2008-09, including DIY kits, are
estimated up to 200,000 units. The value of this
 business is estimated at  up to
140 million retail dollars. 
7
ebikes have had a rough history

• IBDs have had some rough experiences concerning
  quality, reliability, parts availability, and
  vanishing vendors.
• New industry turmoil in vendors is normal. Some
  vendors now more than a decade old. Others have
  experienced staff.
• Quality is much improved.
• Pay attention to warranty, and how the warranty
  is serviced.
• There are still brand new players with OTS
  Chinese bikes that will not satisfy the IBD. Be
  wary.

8
Consumers More Interested Than Bicycle Dealers?

• Most IBD customers are willing to sweat, willing
  to go to small specialty store, do not have
  affinity for motorized two wheelers. Maybe 5-7
  million in the USA?
• Most Americans are very much in favor of motors,
  do not enjoy sweating, and buy primarily from
  mass merchants. Maybe 270 million?

9
Consumer Reasons to Buy LEV

• Cost of Fuel
• Green consciousness
• DUI (more DUIs in your state than sport
  cyclists?)
• Interesting gadget
• Easier to pedal cycle all the benefits of
  cycling without worrying about the hill or the
  wind.
• Commuters

10
Reasons for Growth

• Cost of Fuel
• Parking
• Traffic congestion
• Carbon reduction
• Availability of Fuel

11
Interesting New Book
12
Projected Growth

• Benjamins projection
• By 2015, 10 of USA bikes sold will be electric
  bikes. Call it 1.5 million.
• Butthese bikes will represent 1/3 of the dollars
  brought in by bike shops, and almost all of the
  profit.
• By 2020, 40 of all bikes will be electric.

13
LEVs World Wide

• China nearly 1 in 2 bikes sold are electric. 21
  million in 2008-9, 100 million in use today.
• EU 750K in 2009, Holland 1 in 4, Switzerland 1
  in 10, Germany approaching Holland numbers. Up
  from less than 100K 5 years ago.
• Japan, India, Vietnam, all sizeable markets.
• 170 nations bought ebikes from China in 2008.

14
How to Make Money Selling Electric Bikes

• Make sure that your shop is relevant in this
  emerging eBike category?
• A window of opportunity is open, but you need to
  act now.
• Waiting to see how it all shakes out over the
  next few years will be too late.

15
How to Make Money Selling Electric Bikes

• Understand how Consumers view your store.
• Consumer perception must be that you are a
  creditable source for LEVs. That requires
• Selection
• Presentation
• Trained Staff
• Demos Test Rides
• After Sale Service
• Dont let this be the customer experience in your
  store
• When we would go into Bike Shops and ask about
  electric bikes, 9 out of 10 peopleyou know with
  shaved legswould sort of look at us with a
  shocked pity
• Listen to this NPR story on All Things
  Considered by John McChesney

16
Selection of Product Vendor

• One brand or just a few models wont do
  Consumers demand selection
• Good, Better, Best
• Quality products at various pricing points
• Just like a bicycle, eBikes are function specific
• Different models for different intent
• Must be appropriate for your market
• And more importantly, choose the right vendors
• Can they support the product?
• Warranty and Replacement parts
• Technical and trouble shooting guides
• Sales training and support materials
• Will they be there when I need them?
• New start-up or well established company?

17
Training Sales Staff

• Right Attitude
• Passionate about the product
• Must be able to transfer your enthusiasm
• Be proud of the product
• Product Knowledge
• Learn the details to sell and up-sell each
  product
• Batteries, drive systems, method of motor
  actuation, user controls
• Actively use the product and understand how it
  functions
• Study training materials from Vendors and
  leverage Vendor reps when available
• Manage Expectations dont rely on vendor claims
• Understand realistic range and variables
• Understand realistic speed and variables
• Understand realistic motor wattage/torque and
  variables
• Understand battery care realistic battery life
• Know local and state laws that govern use

18
Training Sales Staff

• Train to develop customer relationship skills
• Ensure you ALWAYS have trained staff available
• Ask questions to understand where they are in the
  buying process and their lifestyle reasons for
  wanting an eBike
• Economic, Commute, Neighborhood Transport,
  Environmental, Health Fitness or Fun
• Recommend specific models that might meet their
  needs and budget
• Accessorize!
• Train to develop strong Demo and Test Ride skills
• Have a dedicated test ride fleet
• Make sure they are regularly maintained and
  batteries fully charged
• Develop a Safety review pre-ride checklist
• Develop a waiver form
• Suggest a test route, with hills if possible.

19
Answering Common Questions and
Objections
20
Demonstration and Test Rides

• Strong Demo and Test Ride skills
• Conduct a safety review go over your pre-ride
  checklist
• Fit a helmet and get waiver form signed
• Adjust saddle height and educate on use
• Ride along if possible and do some suggestive
  selling
• Make sure they are smiling (almost impossible
  not to) but if they are not, it generally means
  they are either uncomfortable or dont understand
  how to use the eBike.
• Post demo test ride ask for the sale because
  generally they are thinking Ive gotta have it!

21
After Sale Service

• Upon delivery
• Set-up and adjust saddle and HB position
• Check and explain importance of proper tire
  pressure
• Review proper use of user controls
• Review proper charger use and battery care
• 30 Day check
• Explain importance of coming back in for a minor
  tune and adjust or check-over
• Great opportunity to sell additional accessories
• Review and reiterate battery care
• Annual Tune Up
• Set the expectation from the start that annual
  service is required
• Tires, Brakes, Batteries need checked and
  replaced as necessary

22
Service Staff Training

• Assign a EV Tech Expert to the category
• One person that can get comfortable with the
  product details and train other staff
• Assembly and set-up
• Mechanical
• Electrical
• Vendor service manuals
• Best time to review is while setting up new bikes
• Vendor trouble shooting guides
• Review for understanding and refer to as needed
• Vendor technical support
• Develop vendor relationships
• Ask questions if you are unsure

23
Selling Service for Better Profits

• eBikes Generally require more service then a
  recreational use bicycle
• Used more frequently
• Accumulate more miles
• Heavier the regular bicycles
• Tire wear and tear
• Battery replacements
• Cycle life diminished capacity
• Second battery pack
• Second charger
• Service providers are currently not readily
  accessible in most markets
• Opportunity for premium

24
Strong Profit Opportunity

• ASPs are higher
• More margin dollars then regular bikes
• European Dealers have figured this out quickly
  and are capitalizing on this.
• GMs are generally higher on upper price points
• 40 free freight from some vendors
• Less price driven cut-throat competition
• Inventory investment lower then regular bikes
• Fewer SKUs (size and color)
• More limited assortments
• Increased overall store traffic
• Bringing in NEW consumers
• Bringing back old (aging) consumers

25
Become the LEV Source in your Community

• It seems only natural that a bike shop is where
  consumers would look for an eBike however this is
  not currently the case
• Bike shops have been very slow to embrace the
  category
• And, many Dealers seem to second guess the strong
  market indicators
• This phenomenon has left the door wide open for
  other retailers to grab this emerging market and
  become more relevant then a bike shop to the
  consumer looking to buy an electric bike
• Take advantage of this once in a lifetime
  opportunity to help shape the market and
  establish yourself as THE SOURCE for Light
  Electric Transportation in your community

26
Make Money Selling Electric Bikes
Questions?
27
Light Electric Vehicle AssociationWould like to
thank our Interbike Seminar Sponsors