Anyone have a clue as to what a dealer makes on a sale
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When my wife bought my 04 for a retirement gift she did a goggle search for something like motorcycle dealer cost and she found a site where you paid something like $20 and they gave you all the figures. I think the 04 was around $14800 ready to deliver and that the MSRP also included dealer prep and Transpiration charges. And that the dealer got 10% of the MSRP as hold back charges paid ever Oct and May. This may have changed by now
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In early 2007, it was about 8%.
That is probably a very guarded figure that not many are privy to and the dealer is not going to tell. Some businesses mark up is far greater than others. I'm in the A/C business and 200 to 300% is common around here. Motorcycles are not near that great but finding out what a dealer pays for one is going to be almost impossible. The large volume dealers get them for a lot less that the small dealer that only sells a few a year. That is common practice for any retail business.
I would say it's only around 10-12% on a new bike. Dealers make more out of parts and accessories for the bikes than they do on the bikes themselves. Accessories is where it's made. FI I know a guy who works in a Piaggio dealership and he gets his parts for cost price, ie a new ignition switch for his scoot cost him $16. You or me would be paying $87.33 for the same switch. A new OEM trunk for his same scooter cost him $29. He bitched about that while I looked in amazement at the invoice, the same trunk would have cost us over $100. Some guys don't know when they have it good...
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All dealers pay..or floor plan the bikes at the same cost... it's called the fair price act... if the factory was across the street vs across the country
the dealer pays the same frieght which is passed on to the consumer .
Hold backs are not 10%...they are lucky to get several hundred dollars
300-500 bucks at best ... usually 2-5 % of MSRP .
Sometimes the manufacture has Factory to Dealer incentives...which the dealer can pass on to the consumer ...which when you see a dealer advertising for several thou off...that is why and how they do it.
Sometimes the factory may give a dealer specials to pass on to the
consumer to help "move" inventory..or leftover sales.
Some dealers may even lose money to get rid of old stock...car dealers do it all the time .. they may lose 2-3k to get rid of a car...nothing worse than a car being on the lot for 420 days.... I've seen it.
the dealer pays the same frieght which is passed on to the consumer .
Hold backs are not 10%...they are lucky to get several hundred dollars
300-500 bucks at best ... usually 2-5 % of MSRP .
Sometimes the manufacture has Factory to Dealer incentives...which the dealer can pass on to the consumer ...which when you see a dealer advertising for several thou off...that is why and how they do it.
Sometimes the factory may give a dealer specials to pass on to the
consumer to help "move" inventory..or leftover sales.
Some dealers may even lose money to get rid of old stock...car dealers do it all the time .. they may lose 2-3k to get rid of a car...nothing worse than a car being on the lot for 420 days.... I've seen it.
Caveat to this post:
We live in a society where profit is what makes the world go round. I do not begrudge anyone from making a profit. I even encourage sellers to attempt to get the most profit as they can. Education and knowledge with a side dish of negotiating skills are whats needed to keep the profit down to a reasonable (for the buyer) number.
In days of old we had the MSRP and were told that is the "cost " of the vehicle. In some cases with vehicles that were in demand you paid above the MSRP if you wanted any chance of getting that particular vehicle.
The the consumers found out that MSRP was an artificial price which bore little relationship to the cost and was intended for maximum profit. Along came invoice price (or "tissue" price) which then became touted as the dealer "cost". Consumers were able to acquire the "invoice prices" from various services. Now all of these numbers are freely available on the internet. We are told to negotiate up from the invoice not down from MSRP. All dealers will swear that that nuumber is the bottom line and that they would be losing money if they go below that.
But alas, once again the general public has been sold a bill of goods. Even if dealers were to sell at invoice price, the profits would be sweet. There are several discounts the public may be unaware of. Holdbacks are a reserved profit number taken off to ensure x dollars of profit. Dealer incentives are not always published or available to consumers and provide an added savings. Then there are the management incentives that sales managers receive depending on how many pieces are sold monthly, quarterly and yearly. Then there are the factory incentives which probably only the owners are aware of. Many do not kick in until the end of the year when the final numbers are tallied
I have several friends who walk into dealerships point to a car and buy it for MSRP. Its those individuals who make it possible for me to negotiate a better deal.
So the simple answer is there are very few people who can really appreciate what the final profits will be.
Dave G
CRS56
We live in a society where profit is what makes the world go round. I do not begrudge anyone from making a profit. I even encourage sellers to attempt to get the most profit as they can. Education and knowledge with a side dish of negotiating skills are whats needed to keep the profit down to a reasonable (for the buyer) number.
In days of old we had the MSRP and were told that is the "cost " of the vehicle. In some cases with vehicles that were in demand you paid above the MSRP if you wanted any chance of getting that particular vehicle.
The the consumers found out that MSRP was an artificial price which bore little relationship to the cost and was intended for maximum profit. Along came invoice price (or "tissue" price) which then became touted as the dealer "cost". Consumers were able to acquire the "invoice prices" from various services. Now all of these numbers are freely available on the internet. We are told to negotiate up from the invoice not down from MSRP. All dealers will swear that that nuumber is the bottom line and that they would be losing money if they go below that.
But alas, once again the general public has been sold a bill of goods. Even if dealers were to sell at invoice price, the profits would be sweet. There are several discounts the public may be unaware of. Holdbacks are a reserved profit number taken off to ensure x dollars of profit. Dealer incentives are not always published or available to consumers and provide an added savings. Then there are the management incentives that sales managers receive depending on how many pieces are sold monthly, quarterly and yearly. Then there are the factory incentives which probably only the owners are aware of. Many do not kick in until the end of the year when the final numbers are tallied
I have several friends who walk into dealerships point to a car and buy it for MSRP. Its those individuals who make it possible for me to negotiate a better deal.
So the simple answer is there are very few people who can really appreciate what the final profits will be.
Dave G
CRS56
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24,623 Posts
Our recent economic times has given me a big hint. I have always suspected for sure even when you make a good deal, you have still gotten..............!!!
Locally due to lack of sales at a Dodge dealership where the fancy Ram pickups were selling for 25 to 30 thousand, you can now buy the very same pickup from 17 to 19 and I am quite sure he is making a profit at that price.
So that is more in the 40 percent range.
How many people actually purchase parts, oil, accessories and so on from a dealer? Some I assume, but most shop on line, or find things elsewhere as dealer prices are extremely high. My local dealer I think has to dust off the oil bottles and shake out the riding clothes for dust. Nice big fancy new dealership, with some very high prices on the bikes, that is where he makes the money , and at 10 percent, he would have to close the doors.
They also manage to sell 90 percent of purchasers about 2 grand or more of extra services such as an in house service plan, and a high priced warranty with a tidy profit for themselves. Do not forget also that each and every finance contract the dealer makes a percentage off that, so add it all up and it is quite lucrative.
Yea, I am not buying the low percentage thing. There is a whole lot of profit in the bikes, and that sell for invoice nonsense, believe it if you wish to, the dealer will smile all the way to the bank.
Please do not mis-understand, they have to make a living, just as I do, I also wish a nice tidy profit, just that all the sales hype is just that, hype.
And no matter how good a deal you got, you still have been got. :joke: You are going to have to get up early to match wits with a sales staff. They are going to win, we are going to lose, but by how much, I suppose it depends on if the utility bill needs to be paid that day. Kit
Locally due to lack of sales at a Dodge dealership where the fancy Ram pickups were selling for 25 to 30 thousand, you can now buy the very same pickup from 17 to 19 and I am quite sure he is making a profit at that price.
So that is more in the 40 percent range.
How many people actually purchase parts, oil, accessories and so on from a dealer? Some I assume, but most shop on line, or find things elsewhere as dealer prices are extremely high. My local dealer I think has to dust off the oil bottles and shake out the riding clothes for dust. Nice big fancy new dealership, with some very high prices on the bikes, that is where he makes the money , and at 10 percent, he would have to close the doors.
They also manage to sell 90 percent of purchasers about 2 grand or more of extra services such as an in house service plan, and a high priced warranty with a tidy profit for themselves. Do not forget also that each and every finance contract the dealer makes a percentage off that, so add it all up and it is quite lucrative.
Yea, I am not buying the low percentage thing. There is a whole lot of profit in the bikes, and that sell for invoice nonsense, believe it if you wish to, the dealer will smile all the way to the bank.
Please do not mis-understand, they have to make a living, just as I do, I also wish a nice tidy profit, just that all the sales hype is just that, hype.
And no matter how good a deal you got, you still have been got. :joke: You are going to have to get up early to match wits with a sales staff. They are going to win, we are going to lose, but by how much, I suppose it depends on if the utility bill needs to be paid that day. Kit
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Does it really matter? The economy depends on sales everyday. We have thousands/millions of businesses that sell small, inexpensive items at 200 - 300% mark up and nobody even really thinks abt it. That retailer may sell thousands/millions of units each year. Mean-while, our sellers of the big ticket items sell far less volume and still have to make a decent living. (Otherwise - they'd only be selling the small inexpensive items).
I think that some people always believe they are going to get screwed by a salesman, but I honestly believe there are many, decent retailers out there who will treat you fair and agree to a number that makes the buyer happy and still gives the salesman an income to live on.
I think that some people always believe they are going to get screwed by a salesman, but I honestly believe there are many, decent retailers out there who will treat you fair and agree to a number that makes the buyer happy and still gives the salesman an income to live on.
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