Industry Insights | Ft. Jeremy Scism 2

In this week's Industry Insights we talk to the team owner and manager of AEO Powersports KTM Racing Jeremy Scism about starting his dealerships, why he wanted to start a race team, and possible plans for 2024.

For the full interview, check out the Vital MX podcast right here. If you're interested in the condensed written version, scroll down just a bit further.

Jamie Guida – Vital MX: What's going on, Jeremy? How is everything at AEO?

Jeremy Scism: Not much. I'm just trying to get ready for the playoffs starting this weekend in Charlotte.

*Editors Note: This interview was recorded the week before round 1 of SMX in Charlotte.

Vital MX: Yeah, it's exciting for the industry and the fans. I'm wondering about that for a team like yours. Do these extra races add any difficulties? More racing is exciting, but I'm curious from a business perspective.

Jeremy: It's a little more challenging just because you have to prepare for the unknown. No one's really seen the way the tracks are going to be as far as suspension goes. So, we're bringing a set of Supercross and a set of outdoor suspension. Hopefully, it's going to be more Supercross-related. Also, the financial side of it is tough, especially for a smaller budget team like ours, but we're ready for it. We're hoping it brings some more outside sponsors back into the sport, especially with the better TV package this year. 

Vital MX: Yeah, I think it will be really good for the sport, and there's a lot of excitement around this. I'm sure, along with the difficulties, there is a lot of excitement for the team. It's another opportunity for your riders to go out, make some money, and have a good showing. 

Jeremy: Yeah, it'll be good. I was super excited. Derek (Kelley) and Joshua (Varize) are both in the LCQ, which is a bit of a bummer. It would have been nice to have Derek get straight in, but we had a rough outdoors trying to get used to the new chassis. Derek being a bigger guy, and then Josh's injuries hurt our points. Josh ended up making it in because a bunch of guys are not going. So, both guys ended up getting invited, and it was pretty cool.

Vital MX: I know you started the first AEO Powersports dealership in Peoria, Arizona, but what's your background in motorcycle racing? How did you get into it? Was it a family affair?

Jeremy: My dad grew up racing and got me into it, and I raced my whole life until about I was 25. I gave it up to take over the shops and build those. I raced some local pro stuff, nothing crazy, and a few nationals here and there, but I never did anything super good. I got another opportunity to run and own a shop. That was the next best thing; we built it from there.

Vital MX: Was it a preexisting shop that you took over and expanded?

Jeremy: Yeah, some family friends started it, and it was just a little part service and accessory store. We grew it up from there. I purchased it in 2005, and then we started our second store in 2015 and our third in 2019.

Vital MX: I know the brick-and-mortar business model is important to you. It seems it would be difficult to keep going and have it do well because online shopping is so easy. How do you make it successful?

Jeremy: We focus a lot on customer service and strong inventory. We have a lot of parts in stock and can go out to the track and do trackside support. We're involved in a lot of events with amateurs and off-road. We go everywhere in Arizona and California, and we were at Loretta's and Texas amateur nationals. We are all over the place, and that helps drive people into the store versus the online stuff. We don't have a website that we sell off of. I don't plan on doing that. I am a diehard brick-and-mortar guy and want to stick to that.

Vital MX: I've been in your Murrieta, California store, and it is the most motocross-specific store I've ever been in. I was so impressed when I walked in there because I'm not used to seeing so many motocross parts and accessories in stock.

Jeremy: We try hard to keep that stuff in stock so people can come in and get whatever they need. Most of the time, with how we treat our customers, they end up ordering stuff from us. We tried to take care of them. 

Vital MX: I love that. That old "the customer is always right" business model has been lost to some degree. Not with you.

Jeremy: I remember as a kid walking in the stores, looking at sticker books, drooling over all the new bikes, and grabbing all the pamphlets I could. We tried to do the same thing and befriend many of our customers. We end up hanging out with them and have strong relationships with them. So, it's awesome.

Vital MX: You mentioned brand recognition from being at the amateur and pro races. Do you have people come in the store and say, "Hey, I saw you at Supercross" or "I saw you at the local track, and I want to come support you?"

Jeremy: It helps with brand recognition. The logo stands out on the bike, and it's definitely helped. It's hard to track all that, but we definitely have some people come in and buy the team swag. They wear it, and it's awesome. The racing side is an advertisement for the shops, but also something that's more passion-driven. I really enjoy it. I've said before that it's like racing without the risk. I mean, it's a financial risk, but not a physical risk.

Vital MX: You must have a passion for it to start a private team. What was the initial thought behind starting a race team?

Jeremy: I've been doing the retail side of the stores for 20 years. It was time to step back, and I needed a reason. So, the race team gave me that reason to step away from the shops and focus more on the trackside stuff, such as amateur events and pro racing.

Vital MX: Something else that stands out about your team that I feel is significant is your partnership with Mark Johnson and REP Suspension. Mark was ten years plus with WP Factory Red Bull KTM as one of the tuners, and then he started his own company. You guys joined together, and that's a big part of your team's trackside support and success.

Jeremy: Most definitely. Mark and I became super close friends and business partners, and it's been crazy what we've done in the last four years together building the company up. His knowledge, I mean, he has an engineer mentality. His brain works differently in so many good ways. He helps with the chassis and the suspension a ton to make our guys comfortable. It's amazing when he comes out to the track, and we do test day, where he helps get the bikes right.

Vital MX: I know you have a REP Suspension shop in Murrietta. Is there one in each of the Arizona shops as well?

Jeremy: We have one in the Peoria location. Our Mesa store ships everything to Peoria because it's only an hour away. 

Vital MX: How has dealing with personnel been on the race team? You have to find the right people to fit your needs. It's a family atmosphere at AEO. You need mechanics that gel with the riders, reliable truck drivers, etc. 

Jeremy: That's been a struggle. We have some guys that have been with me since the beginning. Mainly my mechanics, and they've been awesome, and love it. They eat, breathe, and sleep it. Being a smaller budget team, it comes with a smaller payroll. So, it's awesome to have some guys who care about the team, enjoy it, and are passionate about it. As far as outside help, I get a lot of my guys from my stores that help. We fly them in, and they're very helpful on the team. They're just as passionate about racing and like being a part of it. The truck driver has been our hardest position to fill so far. I've driven the truck most of the West Coast Supercross both seasons. We've hired a driver for some of the West Coast and outdoors, but this year was a struggle. We had to let one go and then hire another guy to finish the last handful of rounds to get us through and get the truck back. 

Vital MX: It seems simple to find a truck driver, but that position has a lot of responsibility. You need someone reliable and willing to do more than drive a truck.

Jeremy: It's the same thing. They have to love it. They have to love the industry and being part of the team. It's a lot more work than just driving the truck around. It's helping set up. It's being a part of the crew and being on the radio. At least with us, it is. Sometimes, it's cooking, cleaning, and taking care of the rig. Being on the road as much as we are, it's hard on the tractor and the trailer.

Vital MX: Talk about some of the riders you've had. Derek Kelley and Joshua Varize are the guys on the team currently. Derek's had good results. Austin Black was on the team at one time. Caden Braswell was on the team. How do you feel about the team's results in two years? 

Jeremy: The first year, we didn't really have a team. We just helped Ty Masterpool out in Supercross and outdoors. We gave him bikes and financial support, and he traveled around himself. Year two started with him, Austin Black, and Derek. Then Ty and Austin got hurt, so we had to have the fill-in: Carson Brown. He and Derek had a good first Supercross season and some nice highlights. In the outdoors, Ty got hurt again, and we ended up parting ways. Austin had injuries the whole year, and then Derek and Josh finished the first year outdoors and did really well. I think we finished 12th and 13th in points. This year, Derek had a solid Supercross season with a couple of down rounds, but for the most part, he had good results and showed some big gains from the previous year. Josh struggled with injury all year, but recently, he's been pretty healthy and getting decent results. It's the same with Derek towards the end of the outdoor season, but we definitely had a rough outdoor season compared to last year.

Vital MX: What are some of the biggest challenges you've had with the team over the last two years?

Jeremy: Keeping riders healthy. That's been a tough one. Obviously, financially, a lot of it is on me. We keep building the team, and we're growing it again next year. Our rig is going up for sale at the end of the season, and we're going to a full semi and three riders. So, that's the biggest thing. We will try to keep upping the program and building this thing and be here for a while. The biggest struggle is personnel. We need more help, but by getting more help, you need more financial support. We do it on a pretty slim crew during the week. I have two mechanics, me and the truck driver, most of the time. The mechanics hold the fort down during the week, and then on the weekends, as I said, we fly a couple of guys in to help all of us set up, tear down, and be a part of it.

Vital MX: Does KTM as an OEM help out much at all, or is it primarily on you? 

Jeremy: They help tremendously with support. With us being one of the biggest Austrian dealers in the world, it helps. Also, we get a lot of outside sponsor money. There are a lot of logos on our bikes for a reason. We have a lot of cool people who help us out, and I'm hoping this SMX thing takes off and the TV package helps everybody. Especially the satellite teams like I am, you know, who are right off of the factory level. We could all use more financial support and to be able to pay the riders more. That's another thing. Many of these riders are riding for free and get paid by bonuses, contingency, or purse money, and that's it. The way our team works is we have a free ride with some financial support with bonuses and stuff like that. Hopefully, we keep building to where we can pay these guys some decent salaries for going out there and risking it.

Vital MX: That leads to my next question. What is your five-year plan? What do you want AEO Powersports KTM Racing to be? You answered that by paying the riders more and more success.

Jeremy: That would be ideal, but we are also aligning with the three manufacturers, KTM, GasGas, and Husky, all under one roof. We will be more of a development team by taking some of their riders who step down to us to rebuild, or we will bring them up from amateurs. If they don't have a spot on the pro team, they can give them a year or two with us to build. Then potentially, they could get brought up or stick with me if they're happy, you know? 

Vital MX: What are a couple of highlights from the two years as a race team?

Jeremy: I'd have to say, from the first year, the first round at A1 was awesome. We had the rig set up, dialed, and being there and making it all happen. It's just a thought until it becomes reality. Another one was Carson's top five last year at A3. That was a big highlight. Derrick's results at Phoenix this year. It was our hometown race, and Derek crushed it. It was a Triple Crown, and he got a top-five in the first moto, and we ended up overall. 

Vital MX: Has it gone better than you anticipated when you started the team, or is it about where you thought it would be?

Jeremy: The first year was better than I thought. This year has been a little flat because the outdoor season was rough on us. It was just a long season with truck driver issues and rig issues, and we ran into a lot of issues that we had to work through. That's just part of it. Next year, many people will be surprised by what we come out of the box with. We're building. I keep hearing everybody's Tweeting who our team is next year, and it will be a pretty solid program. I'm excited about what we have in store for next season. 

Vital MX: I've heard the rumors, and I know you can't spill the beans just yet, but what can you tell us? 

Jeremy: I mean, the rumors are pretty true. I'm not going to sit here and lie about it. Everybody kind of knows. Talon Hawkins is coming from Husky, and we're excited about that. I worked with Talon before he signed his Husky deal, so we have some history, which is awesome. I love the family. It will be a great environment for him to tune into his full potential. We're re-signing Derek, but the difference is he'll be 250 West Coast, and then we'll go 450 outdoors with him. So, that's going to be fun. Derek is a big boy. He's 180 lbs on a 250F outdoors, which was a big struggle for us this year. Most of these kids are 140 to 150 lbs on these bikes. Then, by the looks of it, we'll have Ryder McNabb doing Supercross Futures with us and 250 outdoors.

Vital MX: I did not think you would actually say that. 

Jeremy: It's not 100%, but it looks positive. The talks are there, and it's pretty exciting. I'm excited about it. We never really raced with three guys because somebody was always hurt. Going to a full rig with three guys will surely be a fun and interesting year.

Vital MX: I'm going to close this thing out with this. How do you balance your professional life and your personal life? 

Jeremy: Honestly, it's been a struggle. The last five years have been tough because I opened up Murrieta, and my family lives in Arizona. So, I spent the first year and a half, pretty much full time out there and getting that store up and going and through Covid, which kicked our ass at first. Then we got uncontrollably busy and started the race team and that whole process, adding more time away from home. My wife loves the race team, and she knows I love it. She gets to enjoy it quite a bit. She gets to travel around with me to a handful of races a year and go to places she's never been. So, that's super fun for us, but being on the road a third of the time with the team, a third in California, and a third at home has been tough. I also have two little girls, but we're working through it. As I said, the biggest thing is trying to back away from the shops more. I've got some good guys at all my locations who have stepped up and run them for me, so I'm allowed to do the race team stuff and then be home a little more.