Inventory shortages
Road Warrior
Joined: Dec 2019
Posts: 1,783
Likes: 938
From: Ohio
Well... it's complicated. The supply curve and the demand lines are not linear, but curved for a lot of reasons (including cost per unit changes as you make less bikes as you point out). You've got to figure out where you can sell for the most profit, which isn't the same as selling the most bikes.
MoCo has been doing this for awhile though... worst case scenario is to have too many bikes on the market to meet your demand, and then you end up with surplus inventory well into the next year model line... or worse beyond that. I'm in the process of taking delivery on a leftover 2019 Road King at a pretty good discount.
Basically you try and optimize the supply and demand curves, but you're going to be penalized worse for having excess inventory, so you usually fudge on the side of scarcity. Even more so when you have a perceived premium product that buyers distinguish from competitors...
MoCo has been doing this for awhile though... worst case scenario is to have too many bikes on the market to meet your demand, and then you end up with surplus inventory well into the next year model line... or worse beyond that. I'm in the process of taking delivery on a leftover 2019 Road King at a pretty good discount.
Basically you try and optimize the supply and demand curves, but you're going to be penalized worse for having excess inventory, so you usually fudge on the side of scarcity. Even more so when you have a perceived premium product that buyers distinguish from competitors...
Stellar HDF Member
Joined: Mar 2017
Posts: 3,174
Likes: 1,466
From: Charleston, SC
Well... it's complicated. The supply curve and the demand lines are not linear, but curved for a lot of reasons (including cost per unit changes as you make less bikes as you point out). You've got to figure out where you can sell for the most profit, which isn't the same as selling the most bikes.
MoCo has been doing this for awhile though... worst case scenario is to have too many bikes on the market to meet your demand, and then you end up with surplus inventory well into the next year model line... or worse beyond that. I'm in the process of taking delivery on a leftover 2019 Road King at a pretty good discount.
Basically you try and optimize the supply and demand curves, but you're going to be penalized worse for having excess inventory, so you usually fudge on the side of scarcity. Even more so when you have a perceived premium product that buyers distinguish from competitors...
MoCo has been doing this for awhile though... worst case scenario is to have too many bikes on the market to meet your demand, and then you end up with surplus inventory well into the next year model line... or worse beyond that. I'm in the process of taking delivery on a leftover 2019 Road King at a pretty good discount.
Basically you try and optimize the supply and demand curves, but you're going to be penalized worse for having excess inventory, so you usually fudge on the side of scarcity. Even more so when you have a perceived premium product that buyers distinguish from competitors...
Here's why I don't like Zeitz's plan: He's trying to create an ARTIFICIAL DEMAND. He thinks limiting Supply will AUTOMATICALLY increase Demand. That isn't a given.
I see it this way. He's thinking that by limiting SUPPLY, that will make the dealers stick to the MSRP, making a better profit on each bike. He thinks the bidding war between dealers will stop because he is closing down dealers and giving customers fewer places to buy bikes. But he fails to acknowledge a very important point of that strategy. He thinks that the Customer is always going to be there no matter what kind of shenanigans he pulls. I don't think that is a GIVEN!
I think limiting supply and trying to create that 1980-1990 model is going to get NEW CUSTOMERS( which he's trying to bring in) aggravated and look elsewhere for a new bike, if they can't get what they want at a Harley dealer. I think he's also going to run off a lot of old customers like me. He won't lose ALL of the long time ones, but he can't afford to lose ANYBODY at this point. And as the market exists right now, there's never been a better time to be a motorcycle rider. You have all kinds of good choices for quality bikes.
Last edited by GOV5; Apr 12, 2021 at 08:03 AM.
Stellar HDF Member
Joined: Mar 2017
Posts: 3,174
Likes: 1,466
From: Charleston, SC
I noticed something else. There were a lot of employees sitting around and I didn't see but 1 or 2 customers. And I'm not sure they were customers. They could have been employees.
Overall, it just looked weird to me. I don't know, maybe everybody was out RIDING and not shopping. After all, the weather is great down there.
Overall, it just looked weird to me. I don't know, maybe everybody was out RIDING and not shopping. After all, the weather is great down there.
Road Captain
Joined: Sep 2014
Posts: 713
Likes: 97
From: Castle Rock, Colorado
Maybe small dealers not wanting to have $$$$ wrapped up in inventory right now? Here in Colorado dealers have lots of bikes for sale and selling them like crazy. Lots of road glides and street glides. One dealer we were at Saturday must have had at least 20 road glides, blacked out and chrome and the same amount of street glides, plus 8 CVO's. Road Glides they show online; 5 special black and 5 special chrome, 4 limited black and 4 limited chrome, 3 regular Road Glides and 3 CVO Road Glides. Just don't see the limited inventory at any of the dealers here. They all have lots of bikes and selling fast. That bell kept ringing the entire time we were there, annoying.
Fortunately for businesses, but not of us that live here, we have many folks from California moving here after selling their tiny home in California for a million dollars. We love to get their money into our economy, but now we have to figure out how to get them back to California. Keep telling them that Nebraska is a great place to move to, or Texas or Ohio or Florida or Canada, just go away.
Fortunately for businesses, but not of us that live here, we have many folks from California moving here after selling their tiny home in California for a million dollars. We love to get their money into our economy, but now we have to figure out how to get them back to California. Keep telling them that Nebraska is a great place to move to, or Texas or Ohio or Florida or Canada, just go away.
Club Member
Joined: Aug 2008
Posts: 2,875
Likes: 197
From: Texas
Maybe small dealers not wanting to have $$$$ wrapped up in inventory right now? Here in Colorado dealers have lots of bikes for sale and selling them like crazy. Lots of road glides and street glides. One dealer we were at Saturday must have had at least 20 road glides, blacked out and chrome and the same amount of street glides, plus 8 CVO's. Road Glides they show online; 5 special black and 5 special chrome, 4 limited black and 4 limited chrome, 3 regular Road Glides and 3 CVO Road Glides. Just don't see the limited inventory at any of the dealers here. They all have lots of bikes and selling fast. That bell kept ringing the entire time we were there, annoying.
Fortunately for businesses, but not of us that live here, we have many folks from California moving here after selling their tiny home in California for a million dollars. We love to get their money into our economy, but now we have to figure out how to get them back to California. Keep telling them that Nebraska is a great place to move to, or Texas or Ohio or Florida or Canada, just go away.
Fortunately for businesses, but not of us that live here, we have many folks from California moving here after selling their tiny home in California for a million dollars. We love to get their money into our economy, but now we have to figure out how to get them back to California. Keep telling them that Nebraska is a great place to move to, or Texas or Ohio or Florida or Canada, just go away.
Club Member
Joined: Aug 2008
Posts: 2,875
Likes: 197
From: Texas
Actually, no to the last statement. All manufactured goods have fixed and variable costs associated with them. There is a certain amount of overhead (fixed cost) that has to be met whether you manufacture one motorcycle or one million such as lease payments, insurance and interest.. All the labor and raw materials, etc make up variable costs. Imagine your rent is $1 million per year. That million has to be spread across all the motorcycles you build. Build 10,000 motorcycles, fixed cost is $100 per bike ($1,000,000 divided by 10,000). If you only build 1,000 motorcycles, however, the fixed cost component is $1,000 per bike ($1,000,000 divided by 1,000). So even if you could keep your labor and raw materials per bike cost constant, your total cost per bike to manufacture 1,000 would be $900 more than if you built 10,000. It's a balancing act for the manufacturer.
Road Warrior
Joined: Dec 2019
Posts: 1,783
Likes: 938
From: Ohio
Maybe small dealers not wanting to have $$$$ wrapped up in inventory right now? Here in Colorado dealers have lots of bikes for sale and selling them like crazy. Lots of road glides and street glides. One dealer we were at Saturday must have had at least 20 road glides, blacked out and chrome and the same amount of street glides, plus 8 CVO's. Road Glides they show online; 5 special black and 5 special chrome, 4 limited black and 4 limited chrome, 3 regular Road Glides and 3 CVO Road Glides. Just don't see the limited inventory at any of the dealers here. They all have lots of bikes and selling fast. That bell kept ringing the entire time we were there, annoying.
Fortunately for businesses, but not of us that live here, we have many folks from California moving here after selling their tiny home in California for a million dollars. We love to get their money into our economy, but now we have to figure out how to get them back to California. Keep telling them that Nebraska is a great place to move to, or Texas or Ohio or Florida or Canada, just go away.
Fortunately for businesses, but not of us that live here, we have many folks from California moving here after selling their tiny home in California for a million dollars. We love to get their money into our economy, but now we have to figure out how to get them back to California. Keep telling them that Nebraska is a great place to move to, or Texas or Ohio or Florida or Canada, just go away.
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Road Master
Joined: Feb 2019
Posts: 832
Likes: 219
From: The Shit Show
Harley has been hemorrhaging money for the last few years which has lead to more and more bikes that arent meeting sales numbers being discontinued. Why is it a surprise that a dealership that historically may have had poor Road Glide sales be short on RG inventory? Obviously its just a pure guess as I know in many places the Road Glide is starting to outsell the Street Glide.
Thread Starter
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Novice
Joined: Aug 2020
Posts: 19
Likes: 8
From: Nebraska
Harley has been hemorrhaging money for the last few years which has lead to more and more bikes that arent meeting sales numbers being discontinued. Why is it a surprise that a dealership that historically may have had poor Road Glide sales be short on RG inventory? Obviously its just a pure guess as I know in many places the Road Glide is starting to outsell the Street Glide.
I just think its weird when 2 of your main models that people know about are street glide and road glide and you don't even carry one of them.