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Archive for January, 2013

THE DOWN FALL OF MIDWEST MOTORCYCLE SUPPLY

Sunday, January 6th, 2013

BAD ECONOMY AND BAD DECISSIONS
THE DOWN FALL OF MIDWEST MOTORCYCLE SUPPLY

I decided to get into the motorcycle business three years ago after being pissed off countless times by dealers that had no idea how a motorcycle even worked and then selling me the wrong parts and holding my money for 3 to 4 weeks before telling me that the part was backordered.
The first distributer I got setup with was Midwest motorcycle supply. I had used their products in the past on builds and was quite happy with the products.
You can call me old fashioned, but because they were my first distributer I was very loyal, always trying to get my parts from them even though I had other choices.
My first year out of the box I did 1.4 million in sales and a large chunk of that, was spent with Midwest. My only complaint with Midwest was Jireh Cycles. All motorcycle distributers have some form of a retail outlet (a perfect example is parts unlimited has Dennis Kirk), but they don’t undercut and screw over their dealers. Unfortunately Midwest does. The Owner of Midwest (Jim) has a son Jim JR who runs Jireh Cycles, it has always been a thorn in my side. I have had customers buy parts from me and then see it on Jireh’s website or ebay store for below dealer cost and get mad at me thinking I’m taking them for a ride on what I charged them. It only happened once in awhile but since the economy has took a crapper, on an average I see 100’s of items on Jireh’s ebay store at below dealer cost with free shipping. 99.9% of buyers including people that walk into my shop go to Ebay to see what things are selling for.
Here is where it does not make any sense. In a bad economy Midwest should be trying to make their dealers happy and get them out there pushing their product as much as possible, but instead they’re pissing off their dealers and their dealers are going elsewhere.
Let me give you an example of something that is seriously stupid. Let’s say my dealer cost on a tranny is $550.00, if Midwest lets me -the dealer- go out and sell it they get $550.00 and shipping cost, but when Jireh’s sells it on Ebay for $550 with free shipping after the ebay , paypal and shipping fees are taken out Midwest is only walking with $448.00 and it has gotten to the point that when you look on ebay the only person selling their trannys or primarys is Jireh’s. However if they would just let their dealers sell their product they would be making more money, instead of running off their dealers.
The sad thing is even if they shut down Jireh, dealers are so pissed it would take a long time to get their dealers loyalty back. I know they have lost mine. Six months ago Mid-USA contacted me and gave me the same pricing as Midwest and a better deal on shipping and I have had 2680 orders go to Mid-USA that would of normally gone to Midwest. Midwest motorcycle supply is shooting themselves in the foot and it does not make any sense.
To top it off Midwest constantly denies that Jireh Cycles is a part of them, even though they have some of the same web addresses, ip’s and registrars and every rep working at Midwest knows the truth. So they undercut and lie to their dealers and they wonder why their sales are plummeting? Yes it’s a bad economy but Midwest has made it far worse for them selves. Just to prove a point I sold a ultima primary to a client in Australia so it had to be shipped to me first and then I would forward it to my client in Australia, so instead of buying it from my rep at Midwest I bought it from Jireh cycles Ebay store and Midwest made $68.00 less and I made $68.00 more in profit. How stupid is that? And just incase you did not know, Jireh means Jehovah. It amazes me how these people who claim to be Christians lie and love to screw people over.
I have talked with a few people that use to work in the upper levels of Midwest and they all say that the owner believes as long as he has the cheapest motors out there he can treat his dealers and reps however he wants and people will still come to him, kind of the Sam Walton approach. Well Karama is a bitch, a large part of Midwests parts come from an overseas company called Riverline and Riverline now has a invested interest in Mid Usa and now refuses to sell to Midwest. If you haven’t noticed lately Midwest is back ordered on just about everything and they are having a hard time finding a replacement manufacturer for the same kind of pricing from what I understand most of the people there finding are about 25% higher than what they were paying with Riverline. It will be interesting to see what happens with Midwest when the dust settles. But one things for sure Dealers are pissed and going elsewhere. And even with their motors I doubt you will be seeing many dealers coming back.
Personally I’m sick of waiting on containers from overseas with crap parts and here at FMB Choppers we have been working hard and coming up with our own product line of parts that are made here in the USA and when you make a order your parts will ship within a few days, Currently we are making custom handlebars, Custom Ape hangers, custom oil tanks, shift rods, anchor rods, and choke knobs and were are currently in the process of Building a new building to get some CNC machines put in place so we can expand further. I would like to get to the point where I’m not selling anything except American made parts, like some of my favorite companies like Jaybrake, Accutronixs and joker machine.