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Becoming an ATV dealer requires obtaining a reseller license, posting a bond, investing in infrastructure and inventory, and establishing relationships with manufacturers. Marketing and competition for the off-road enthusiast market are also important. Legal requirements and fees vary by jurisdiction.
To become an all-terrain vehicle (ATV) dealer, there are several steps you must take to meet the legal and financial burdens of owning a dealership. You must first obtain a reseller license from your state or jurisdiction. You will also be required to post a bond and maintain proof of licensing and insurance coverage. In addition to the legal requirements to become an ATV dealer, you must make a significant investment in the dealership’s infrastructure and inventory. This will require a substantial amount of initial capitalization. The road to becoming an ATV dealer also involves marketing and tough competition for the off-road enthusiast market.
Legal requirements to become an ATV dealer vary by jurisdiction. Each state generally requires a dealer license application process, possibly a commercial vendor license and a bond. In 2011, California, for example, requires a prospective ATV dealer to apply for a license, obtain a dealer number, pay an application fee of $150 USD (USD), pay a fee to the New New Vehicle Vehicle Board, and hold an insurance bond of $20,000. To become an ATV dealer in Arizona, you must pay $100 to obtain a license and pay $100 annually to maintain that license. Several other miscellaneous fees are also required, in addition to an insurance bond of up to $50,000 and a state background check.
There is also a significant capital investment required to become an ATV dealer. You’ll need a lot to show your inventory, establish a service center, transact, and maintain various aspects of the business. It is not a good idea to operate a privately owned utility that is used for other things, such as your residence or storage facility. You will also need to establish relationships with several ATV manufacturers and obtain a corporate affiliation with a major manufacturer.
When establishing your relationships with manufacturers, make sure none of your contracts include 100% exclusivity, which would preclude the sale of other brands of ATVs. For foreign manufacturers, you will need to organize an import and delivery system and negotiate the best possible wholesale price per ATV. The lower the price you buy per unit, the more profit you are able to generate. It also gives you and your sales team more leeway in dealing with customers.
To successfully operate an ATV dealership, you will need to market your operation and train your sales force. Selling ATVs is totally different from selling consumer automobiles. Off-road ATVs cater to a small niche market of enthusiasts looking for a specific vehicle for a specific activity. For this reason, it’s important to offer a variety of brands when building your inventory, as there isn’t much difference between individual ATVs.
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