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Old 08-26-2008, 10:41 AM   #1
acecycleins
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Default How viable is the Salvage Business?

Business is slow at ACE and I'm itching to do something new to keep me busy. I'm not selling ACE, but I was thinking of using the name/logo to open and sell used parts. With the connection to the insurance I don't think I'll have an issue getting bikes. Here's the rub:
1- I can't just jump in spending $100k to start. I will have to start small and work my way to my goal. I've got the cost for being Registered, Licensed, Insured and Bonded for a "legit" salvage operation. Problem is zoning. It will be near impossible to get "Junk/Salvage" zoning status in the county I work in. HOWEVER, If I operate an "indoor" salvage company I can do it under CDB zoning.
2- That being the case. If I had all my p's and q's lined up- would you as a consumer by parts out of 1 of 2 indoor RV storage bins? The guy that owns the storage facility has two for rent for $500 month. I'd build selving and peg board systems to keep things tidy. All useless junk will go straight to the scrap yard. So, there won't be crap taking up valuable space.

I won't sell complete bikes. Therefore, I won't need a used dealer's license. Storage is 1/4 mile from my Agency location- so I can run my Salvage business out of my office. The kid that works for the storage guy has already asked if he can help strip bikes. Wham!-I got a part time employee. I can actually work a Excel spreadsheet- so inventory should be easy until I become bigtime and need a "real" management system.
Check out these guys: Motorcycle Parts - Honda Suzuki Yamaha Kawasaki
They're maybe a little bigger than I'm thinking for my business, but they seem to have a first class salvage business going and it's a model that I like because it's all indoors.
Let me know your thoughts.
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Old 08-26-2008, 11:08 AM   #2
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I have a friend of mine that ran the online-salvage website/business "www.cyclezoo.com" for a year or two. It more than put food on his table, and he was probably more-reasonable on parts than just about anyone else out there - it was such a success, that he even opened a "brick and mortar" storefront, bought a big Excursion and trailer to haul bikes with, and had one full-time and another two or three part-time employees. BIG ebay business, he was one of the "Original Power-Sellers", knew several of the Paypal "Execs" by name (before ebay bought paypal), I just knew he was gonna corner the market on wholesale salvaged-motorcycle parts, one of those "made my first Million by 30" types.

But he sold it all, and the guy that bought it hasn't done doodly-squat with it - the sale of the business and subsequent doodly-squat were both due to the same thing: It took up every single second of his free time, and a lot of his NON-free time as well.

He had a growing family, and wanted to spend time with them more-often than an hour or so a few times a week.

So, he's back in Sales now. Not 'zackly sure what he's doin' - I've lost track of him over the last few years.
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Old 08-26-2008, 11:21 AM   #3
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Seems like a good idea to me, Kirk. There's a couple of bike junkyards around here, but they're just that: junkyards. You have to find and pull what you want.

I liked the other idea better, BTW.
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Old 08-26-2008, 11:24 AM   #4
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Quote:
Originally Posted by Kenneth_Moore View Post
Seems like a good idea to me, Kirk. There's a couple of bike junkyards around here, but they're just that: junkyards. You have to find and pull what you want.

I liked the other idea better, BTW.
Klazy Ken can help him out with junk ads!

Divorce forces scrapping! Salvage title in hand!

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Old 08-26-2008, 11:31 AM   #5
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Just don't half-ass the website or the marketing. If you have a poorly put together site people won't trust it. Pony up and go for a full online ordering system instead of pay pal.

Get a decent hosting plan. The link you sent acted extremely slow (which it shouldn't have as it was a database driven site).

Get yourself hooked up with good portal sites.
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Old 08-26-2008, 11:40 AM   #6
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The site will be inter-active with an on-line store. I will, also, be using onlineauctions.com because their fees are much more in line with my budget. I have 2500 current customers, allowing for easy solicitation. The guys at blokessportsbike.com and georgiasportbike.com have been behind the idea- so there's local interest. The biggest part is aquisition of bikes/parts. It will take time, but I believe that I could be selling initial product by winter. As long as I can ship orders the lack of store front shouldn't hurt too bad in the beginning.
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Old 08-26-2008, 11:46 AM   #7
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Quote:
Originally Posted by acecycleins View Post
The site will be inter-active with an on-line store. I will, also, be using onlineauctions.com because their fees are much more in line with my budget. I have 2500 current customers, allowing for easy solicitation. The guys at blokessportsbike.com and georgiasportbike.com have been behind the idea- so there's local interest. The biggest part is aquisition of bikes/parts. It will take time, but I believe that I could be selling initial product by winter. As long as I can ship orders the lack of store front shouldn't hurt too bad in the beginning.
I don't see a big need for a store front especially if you have good photos and descriptions.
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Old 08-26-2008, 11:54 AM   #8
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At first I'm going to be space limited. That said, I was thinking of only going back 15-20yrs believing that the turn over would be much higher than stocking "old bike" parts. I know there's a market for old CB parts, but reality dictates that modern bikes of all types are easier to market vs old bikes. High turn over of parts means more money coming in- thus, allowing expansion. Am I wrong?
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Old 08-26-2008, 11:58 AM   #9
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Check out CyclePsycho, which is run by a friend of mine. He seems to be doing quite well.
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Old 08-26-2008, 12:10 PM   #10
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Ace, if you are actually soliciting advice on how to start a successful salvage business from MOrons then you don't stand a chance.
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