Bike Buyers Tip: How the Rand affects your bike selling experience
Bike Buyers is in the business of purchasing motorcycles which find themselves on the showroom floor of the famous Fire It Up dealership in Fourways, and the number of motorcycles on the Fire It Up floor suggests they are damn good at what they do. Collectively, they have many decades of bike buying experience and will be sharing their knowledge with The Bike Show Website every Monday offering tips, advice, guidance and warnings regarding your bike buying or selling experience. For this week’s tip, we look into how the dropping currency can affect not only your bike buying, but selling also.
We have seen, in the last month or so, a drop in our currency of nearly ten percent that may be only a glitch caused by some uncertainty, and the Rand has a tendency to stabilise over time, but this glitch is something that might cause some chaos in the motorcycle industry in the near future, although there will be a delayed affect.
The stock of motorcycles and motorcycle goods that are currently in stores and warehouses are still being traded at the previous currency because they have already been paid for by the importer. Some importers have stock that will last them months and could weather the storm, and others have payment agreements with the manufacturer and insurance that will also see a delayed effect of the currency change, possibly no effect at all.
For importers that have no such luxuries, a shipment arriving soon will carry a hefty 10% extra charge. The immediate impact of this on them affects cash flow, meaning a large sum of the profits from the previous import will be splashed into merely replenishing stock.
Of course, this has a knock-on effect with the dealer, who will also have to use profits from their previous sales to replenish stock. The good news for the end buyer is that the knock of this extra cost caused by the currency drop is usually absorbed throughout the supply chain, with each party taking on a bit of the strain, so the end-user doesn’t see the brunt of it by the time they purchase from the retailer.
Where it does have a profound effect for the buyer is in the cash flow of these businesses, as they are seeing decreasing profits and are having to use a large sum of that profit to keep their shelves and showrooms full. Therefore, should you arrive at their door proudly flourishing your used motorcycle for sale, it could well receive a more critical eye, more head shaking, a lower offer and maybe even a refusal.
Our advice, then, to people wanting to sell their motorcycle is to either sell it privately, although that has its dangers, or put it on a showroom floor on consignment, that again has its problems especially in times of low cash flow. The best solution is to go to the big, reputable dealers, that have enough to cashflow, even in the more trying times, to be able to make purchases at a decent price and will not snuff the client when their consignment bike is sold.