Thursday, September 28, 2023

RumbleOn aims to lead online sales of motorcycles

By Charlotte Chilton

With almost everything else being sold online, veteran auto-dealership executives Marshall Chesrown and Steve Berrard figured why not Harley-Davidsons and Yamahas? The duo started Charlotte-based RumbleOn Inc., a public company that projects it will reach $100 million in revenue this year, a 14-fold increase from 2017.

Such stupendous growth hopes stem from the company’s goal of simplifying the buying and selling of motorcycles. It’s an estimated $7.5 billion market, with about 800,000 used motorcycles trading hands annually, about half involving Harleys, according to a company filing. Reselling cycles now mostly happens through online listing services such as Craigslist.

RumbleOn takes a more active approach, buying cycles from consumers and then taking responsibility for selling them online, through dealer partners or at auctions. The company has forged numerous partnerships with motorcycle dealers and third-party companies such as MotoLease and Sonic Automotive.

To target the die-hard biker crowd, they’ve attended various motorcycle events across the country, such as the annual Daytona, Fla., and Sturgis, S.D., Bike Week rallies, where the company offered free Wi-Fi, charging stations and merchandise.

Berrard, 63, and Chesrown, 60, took over what had been a shell company and created RumbleOn in 2016. Chesrown, who is the CEO, co-founded Vroom Inc., a New York-based online seller of cars that has raised about $300 million in capital since its inception in 2013. He also ran his own car dealerships in Colorado before starting a real-estate business that collapsed in the recession. Berrard previously led dealership operator AutoNation, as well as Blockbuster Entertainment and Swisher Hygiene. He was a longtime senior executive for Florida billionaire Wayne Huizenga, who once owned Blockbuster and the Miami Dolphins.

Since its opening, RumbleOn has signed 12 dealers in seven states. Revenue totaled $7.3 million last year. The company says it sold 678 bikes and earned an average margin of $750 during that period. It has lost about $9 million since the company’s organization, including $8.6 million last year.

RumbleOn went public by raising $14.5 million in October, initially trading at $5.50 per share. The two founders controlled almost two-thirds of the company’s voting stock after the offering. It was trading at about $4.85 in mid-March.

Company officials didn’t return phone calls seeking comment. In a late February press release, Chesrown said RumbleOn has the “only end-to-end online marketplace that provides customers an effective, seamless, and hassle-free way to purchase pre-owned recreational vehicles. This unique and compelling business model has enabled RumbleOn to carve out a niche in the highly fragmented recreational vehicle marketplace.”

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