Racing is expensive

[Fan]

FormerF1champ: As an example of a B2B deal, I would look at a series or team which is sponsored by, or has links to, a chain of garages or sell aftermarket car parts. I'd then speak to an exhaust manufacturer, or any car part manufacturer, and find out if they have any excess stock that they're looking to get rid of at discounted prices. You'd need to have agreements in plce with both companies but quite often you'll be able to offload parts and earn a comission from that. These deals take quite a bit of time to set up but they are possible.

[Paul D]

Originally Posted by Fan

FormerF1champ: As an example of a B2B deal, I would look at a series or team which is sponsored by, or has links to, a chain of garages or sell aftermarket car parts. I'd then speak to an exhaust manufacturer, or any car part manufacturer, and find out if they have any excess stock that they're looking to get rid of at discounted prices. You'd need to have agreements in plce with both companies but quite often you'll be able to offload parts and earn a comission from that. These deals take quite a bit of time to set up but they are possible.

Sorry - I may be missing something here, but how does that amount to 'sponsorship'? That's just a bloke brokering a deal between two companies, and to be honest, it sounds like the amount of work you'd need to put in to pull off anything worthwhile would be time better spent simply earning more money in your own line of work.

I've always taken sponsorship to mean a company giving you something worthwhile (be it cash, spares, consumables, free use of facilities, etc) in return for advertising exposure, corporate entertainment and such like.

[Fan]

PaulD: That's a fair point however you'll find it a lot more difficult to convince someone to give you money for racing Club F/Ford 1600 than it would be to broker a deal as I explained above.

Once set up, the deal could/should carry on for years to come whereas with a "normal" sponsorship deal you have to convice the directors/CEO's every year that it's worth them putting money towards your race deal.

I know of a top WRC driver who introduced a drinks company to a major retailer and the deal financed a large part of his programme for a number of years. It's not easy, but I find it a better way of setting up a long term race programme.

[Paul D]

Yes, I agree that it probably is more difficult to convince a company to part with anything tangible/worthwhile based simply on the promise of their name on your club racecar. There's not really much in it for them at club level is there?

But my point was that what you're talking about with the business to business thing isn't really sponsorship is it? It's simply acting as a broker to close a deal and take some kind of commission from it, and then using that commission to pay for your racing. You could equally use the money to buy a new kithcen, or go on holiday, couldn't you? And if so, then it's just earned income isn't it, like any other earned income?

Taking your example of the WRC driver: I can see how that can amount to sponsorship if either the name of the drinks company or the name of the major retailer appears on his car, and the promise of that exposure was a key element in the deal brokered between the two companies - that, to me, is sponsorship. But if you tell me that the driver simply used his business sense or connections to broker a deal between the two companies, and the motorsport connection was not part of the deal, then to my mind that is simply a businessman doing a deal, and choosing to spend the proceeds on his rallying. That isn't sponsorship.

If it is the former (i.e. sponsorship), then more power to his elbow, and well done for being able to close that sort of a deal to pay for his motorsport. However, those of us on here who race or rally at grass roots level are never going to be able to emulate that - with the best will in the world, I can't really see Tesco or Coca Cola being that interested in having their name on my club racecar that does five or six meetings a year on the club circuit.

And if we're talking about trying to manage the same thing, but on a smaller scale at local company level, I still don't see much hope of success to be honest. I could approach 'Joe Bloggs Engineering & Fabrication' together with 'John Smith Steel Stockholders', and I might even be successful in creating a situation where both companies benefit from a deal whereby one agrees to buy all their steel from the other, for an agreed discount. Joe Bloggs gets cheaper steel, and John Smith gets more sales, but neither of them benefit any further by having their names on my car, and offering them that option as a deal sweetener isn't going to sway their final decision in my opinion. So if I'm successful - great, maybe I make a bit of commission from it, but it ain't sponsorship!

I can see how the B2B thing can work at the higher echelons of motorsport, where there's big money, and potentially big exposure opportunities, but I just don't see it ever working for club racers. I could see myself putting an awful lot of time into it for zero return, and, as stated earlier, I'd probably be better off simply putting more effort into my own source of income and using extra money made there to pay for my racing.

[luke g28]

You could go drifting for <£100 a day including entrance fee, tyres and fuel.

To be in the national championship you are probably looking at £2k for car and anywhere between £300 and £1k per round depending on how competitive you are / how much you break.



Before you all get on your horses, its fun, its cheap, its accessible and you do it in a car. Whether it is your idea of "motorsport" doesn't change any of these facts

[dtype38]

The title of this thread is "Racing is expensive".

Well.....erm, yes. For most of us ordinary folk, yes it is.

But it's relative:

Deciding to walk in your local park is cheap. Deciding to walk the Great Wall of China isn't. So with walking, you can choose to do it cheaply or not.

Deciding to go offshore power boat racing isn't cheap. There simply isn't a cheap version. If you're a millionaire it still isn't cheap. If you're a billionaire then it's not expensive.

Motor racing is somewhere between the two, but the price depends on the level you decide on. If the level you can afford is lower than you want to do, then you need to make sacrifices and set yourself the task of earning more money. If you aren't prepared to do that, then maybe it's not the right sport for you.

[Tim Falce]

Originally Posted by luke g28

You could go dr**ting for

Wash your mouth out with soapy water and stand in the corner for mentioning that word in here.

[mountainstar]

Originally Posted by formerf1champ

Would much rather go racing...

Can you, or anyone else, explain, to me at least, what is a business to business deal?

Well I have to have something else to do when I am home and it's good exercise.

B2B deals are more common these days. Kmart and Target sponsorships in CART are good examples. They got most of the large branding on the team and all of the many associate sponsors paid the bill. In exchange for those associate sponsors kicking in a few hundred thousand each, they received prime space on the shelves at Kmart and Target over their competitors(Energizer batteries vs. Duracell and other brands) and other marketing considerations.

In the indy racin' league and Nascar, Penske recently did a deal with Shell Oil. Shell pays for the sponsorship of the cars but gets to be the vendor of oils and lubricants for all of Penske's Truck and car sales businesses(which is quite significant in size).

It takes some creativity, but a lot of these deals ensure everyone gets something from something, rather than running it on a hope and a prayer with media coverage and exposure.

[mountainstar]

Originally Posted by Paul D

Sorry - I may be missing something here, but how does that amount to 'sponsorship'? That's just a bloke brokering a deal between two companies, and to be honest, it sounds like the amount of work you'd need to put in to pull off anything worthwhile would be time better spent simply earning more money in your own line of work.

I've always taken sponsorship to mean a company giving you something worthwhile (be it cash, spares, consumables, free use of facilities, etc) in return for advertising exposure, corporate entertainment and such like.

It does amount to sponsorship and allows business to be done where everyone can make money. It's much better than going to a company and saying just give me half a million bucks and you get your name painted on a race car.

Also you even end up having to advertise to advertise your media exposure. One manufacturer I work with spends money advertising in car and racing magazines to let everyone know it won the championship or whatever, as well as doing other promotions too.

[mountainstar]

Originally Posted by dtype38

The title of this thread is "Racing is expensive".

Well.....erm, yes. For most of us ordinary folk, yes it is.

But it's relative:

Deciding to walk in your local park is cheap. Deciding to walk the Great Wall of China isn't. So with walking, you can choose to do it cheaply or not.

Deciding to go offshore power boat racing isn't cheap. There simply isn't a cheap version. If you're a millionaire it still isn't cheap. If you're a billionaire then it's not expensive.

Motor racing is somewhere between the two, but the price depends on the level you decide on. If the level you can afford is lower than you want to do, then you need to make sacrifices and set yourself the task of earning more money. If you aren't prepared to do that, then maybe it's not the right sport for you.

Motorsport is a cruel sport, not because it is dangerous, plenty of sports are dangerous, but because it is so expensive.

I think if one doesn't have pro ambitions or wants to run Ferraris, there are plenty of lower cost options to buy a car, run it for a few years and then sell it and get some of your money back out of it.

[phoenix]

Originally Posted by mountainstar

In the indy racin' league and Nascar, Penske recently did a deal with Shell Oil. Shell pays for the sponsorship of the cars but gets to be the vendor of oils and lubricants for all of Penske's Truck and car sales businesses(which is quite significant in size).

I think I am right in saying that in the EU that kind of arrangement would be in breach of competition laws.......... i.e. it is the same as a bribe or a back-hander.

[mountainstar]

Originally Posted by phoenix

I think I am right in saying that in the EU that kind of arrangement would be in breach of competition laws.......... i.e. it is the same as a bribe or a back-hander.

I don't see how it would, unless it is that totalitarian of a society. It's a private business deal that has nothing to do with competition and a business is choosing to purchase products from another. Also these deals have gone on in F1 as well with car manufacturers and their suppliers.

With an easy search I found this as an example:

http://joesaward.wordpress.com/2011/...some-more-b2b/

[greenamex2]

Originally Posted by phoenix

I think I am right in saying that in the EU that kind of arrangement would be in breach of competition laws.......... i.e. it is the same as a bribe or a back-hander.

Either that or tax evasion in the UK. You need a really good contract to prove that it isn't either.

At work we have an ever growing list of increasingly petty things in case we bring the company into disrepute (instant dismissal).

And yes we do live in a totalitarian society, the EU. Unless your French in which case seem to have a waiver for everything (and that's jealousy NOT an insult to the French, wish we did more of it!).

[formerf1champ]

Originally Posted by Fan

FormerF1champ: As an example of a B2B deal, I would look at a series or team which is sponsored by, or has links to, a chain of garages or sell aftermarket car parts. I'd then speak to an exhaust manufacturer, or any car part manufacturer, and find out if they have any excess stock that they're looking to get rid of at discounted prices. You'd need to have agreements in plce with both companies but quite often you'll be able to offload parts and earn a comission from that. These deals take quite a bit of time to set up but they are possible.

Yes, I get it now. You could probably sell parts for higher than retail price at a track as well.

Originally Posted by mountainstar

Well I have to have something else to do when I am home and it's good exercise.

Yeah, I get. I'm just messin around.