Let's here from some of the audience...
Let's here from some of the audience...
Another interesting point: Most people expect a discount off MSRP. Now if you have a product in high demand and no inventory to really back it up does it ever become worth more than MSRP?
Or, another good example: People who are spending a couple of hundred dollars at the counter will sometimes ask for a discount because it's a "big sale". Do you ask for a discount when you purchase groceries at your favorite store and the tab ends up at $200 or $300 and more? After all the level of service at your typical grocery store leaves something to be desired. Meanwhile the guy at the brick & mortar motorcycle store who is providing good service and can't match an internet price suddenly sucks and/or is a ripoff.
This is why I say a $500.00 discount or more isn't going to break the dealers' bank...it's not can they do it, it's do they want to do it, for the most part. As has been stated, every deal is different...some people will pay MSRP if a "free" pair of gloves is thrown in and some people want to pay no more than $100.00 over wholesale with first service free!
I think best advice is ACT like you know what you're talking about when addressing the dealership..don't ask if something is possible, like: "Can you discount your price any?" Be direct and state: "'I'd be willing to pay $XX,XXX amount for that bike." If they ask where you got that figure tell them the truth, you've been shopping and know the product and marketplace..and don't say a lot more...the ball is now in their court. If they are interested in moving the "unit" you'll get a reasonable counter offer. If not, be willing to walk after thanking them for their time. And always do all with a high degree of calm confidence, which can quite often result in a call from the dealership next day.
Good advice from motodan. I've never recd less than $1300 off msrp on my 12GS's and the last one which is a 2012, I got $2900 off msrp. I've bought 8 of them starting in april of '04. The GS is lots more popular than the R. Find another dealer and remember they need to sell the moto/you don't need to buy it.
12 GS black/Boxer Cup Replika
ride till you can't
I can say that the MSRP of a K1300S ( no extras )
is approx 15% over dealer cost. This is in line with the RT
info Billy provided.
marked them up $2000. A couple of people found others that
had just purchased one and offered them $5000 to buy it
And don't forget about Harley Davidson's waiting lists of
a few years ago. A close friend would get his name on the
list every year and either would sell his place on the list
when he got close to purchase time for $1000 or take
take delivery of the bike and ride it a few times and then
sell it for between 1 - 2K over what he paid.
What do people on the forum feel is a fair margin on a motorcycle sale, or should fairness not enter the picture?
It all depends what the mechanics of the transaction with the OEM are. If I have to pay and finance my inventory and may have bikes sitting on my shop floor for 6 months or longer, anything less would be suicidal.
As a customer, of course, you want the "best deal". You buy a car and you want $125.- "over invoice". While "invoice" is not what the dealer pays, there is little left. How does he pay his overhead and the salesman?
Paragraph #2: One of the ways a car dealer is substantially different is with something known as "absorption rate". If your fixed op's (a.k.a. Parts and Service) is capable of paying all of the overhead in a car store you have a 100% absorption rate. You have to be extremely good to pull this off. However, if you can do 100% absorption every car over the curb represents bonus money so to speak. For car dealers big enough and good enough you may see 200 to 400 units per month being moved. The gross profit margin may be somewhat slim despite possible spiffs and/or holdback money but given the fact the place was paid for due to absorption the dollars can be pretty reasonable.
However, like any business dollars are not necessarily the entire game. You need percentages to cover for mistakes and whatever. Look at big oil. Newspapers always publish the big profit number from a dollar point of view. They never state the gross margin in the headline or the rest of the story usually. The somewhat low gross margin will not shock and setoff the average citizen as they can't relate to that. The billions of dollars will however set off a storm of protest just as quick as a wildfire in Arizona. You really need that gross profit margin before you say a business is "raking it in".
To my knowledge there is no such thing as a motorcycle dealer who runs a 100% absorption rate. Given the fact many motorcycle service departments lose money on an annual basis it is critical unit sales cover for the rest of the store. It's a much tougher business than people generally think.
1. Salesman are usually paid a commission against a draw. Commission is usually a percentage of the gross profit on products sold...say 15%.
2. $290.00 fluid changes (called first service)
3. $500.00+ fluid changes w/valves and sync (labor rates of $75 to $100+ with wrench getting $15.00 to $25.00 an hour)
4. $900.00 top cases that cost dealer $500.00+
5. $16, $18 or $20.00 oil filters
6. $58.00 for liter of gear lube
7. $18.00 spark plugs
8. $350.00 tank bags
9. $1,000 jackets and $900.00 pants
10. $1,500 exhaust systems
11. $2.37 bolt and 85 cent nut with a 31 cent washer
12. $28 gaskets
13. $900+ per bag panniers
14. $2,000++ final drive units
15. $120.00 service manual CD
16. $200 battery
17. $20 light bulbs
18. Tires and on and on
I'm not complaining...just saying you pay to play and dealer is in business to stay in business. Again, profits from a bike sale can be just a drop in the bucket when it comes to the overall revenue stream from each and every customer. You have to look at the entire product and service line to market when calculating the potential for profit.