I’ve recently become addicted to off road motorcycling. It’s full of freedom, adventure, and the challenge of improving your skills. It’s my new passion and, without really meaning to, I’ve stumbled upon a way to make it pay for itself. By leveraging three basic strategies you can too.
Here’s the story. It all started when I saw a fairly small bike parked on the side of the road (a Honda XR100R for you enthusiasts). As I drove by, it shouted longingly to my inner fourteen year old.
As soon as I got home I did a bit of online price researching on eBay and cycletrader.com, discovered it was a deal, and bought it the next day. Shortly thereafter I began to crave more power.
So I did a bit more research, made a couple of phone calls, and discovered a great deal on what was supposed to be my dream bike. Since the bike was in Phoenix, I had to trust the opinions of those who suggested that this was the model for me and buy it without a test drive. Before finalizing the purchase I contacted my local independent motorsports dealer and asked if they accepted consignments, which they did. Armed with a back up plan, I moved forward with what had become virtually a no risk proposition.
When it arrived I quickly discovered it wasn’t what I wanted. It was a highly modified Honda CRF250R racing bike not especially suited for trail riding, which is what I do.
But not to worry. I knew I could turn a tidy net profit, though I still needed a second bike with more power. Tonight, while my wife was out celebrating my sister in law’s birthday, I lost a bidding war on eBay for the motorized toy I planned to replace my former dream bike with. As soon as I received notification that I hadn’t won, I browsed over to cycletrader.com and did a quick search. I found a very good deal on the exact bike I’m looking for. The seller’s ad states that he has two identical ones available, and that he will make a package discount if the buyer takes both. So tomorrow I may be doubling my bike inventory, keeping one and selling the other for a profit.
Though this is just a story of picking up some extra hobby money while having a little fun, I think it illustrates just how simple it is to monetize one’s knowledge of a market. Three basic business strategies were at work in these transactions. They are used in many “full size” businesses and are easily transferable to hobbies. No doubt you’ve already picked up on them. To put them succinctly…
First, learn the market. For me it has to be easy. And thankfully I don’t really have to do this for grocery money so it also needs to be fun. Frankly, I know market values within only a very, very small niche of the bike market: recent models of Honda’s CRF off road motorcycle product line. If one wanted to expand their hobby business, assuming they can continue to carry out the next two steps, they only need to learn the values of other product lines of Honda or Yamaha bikes. The possibilities are as abundant as the number of off road motorcycle manufacturers.
Secondly, source “it” below market value. In this case I like to mess around online learning about off road motorcycles. I’ve only bought bikes that I either believe I want or at least think it’s worth trying out, though there’s no reason someone couldn’t grow this “business” to be as big as their investment capital and sales channel can handle. There seems to be plenty of good deals out there. My “it” here happens to be motorcycles, but it could just as easily have been cars, boats, jewelry, furniture, or about anything else that has a secondary market, which is virtually everything now.
Lastly, find a good sales channel. My sales channel is All Star Motorsports in Buford, Georgia. Over the past two months I’ve gotten to know James, the owner, and his brother Russ. They think I know very little about dirt bikes…and they’re right. But, I do know the market value of a few Hondas, and that is all I need. I have absolutely no desire to market bikes myself but, together in our informal partnership, we make a great team. I don’t really enjoy administrative work, so I limit my involvement to a phone call with the seller agreeing to a price and a phone call to my new friends at the bike shop. Someone else coordinates the details of the transaction. Russ will be picking up the bikes from my house, selling them in his brother’s shop, and sending me a check for the sales price minus a 10 commission.
Whatever the “goods” are, to use the economic term, the basic principles remain the same. As billionaire serial entrepreneur Richard Branson said, “Business opportunities are like buses; there’s always another one coming.”
Author Resource:
http://www.leadingbythinking.com Paul Hoyt is an emerging writer presenting a fresh perspective on topics relating to business and the logic of life. He is the founder and President of a successful luxury watch company and is a member of the Cerebrals Society for those with IQ's in the 99.7 percentile.
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