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Thread: Msrp ?

  1. #31
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    Quote Originally Posted by Motodan View Post
    Here are a few answers to your question...there are many more:

    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.
    Some of these items you list seem to be very typical for certain motorcycle brands/dealers and very untypical for others. What dealer, other than HD will sell a $1,500 exhaust sytem to a new bike customer??
    And what Ducati dealer will sell a $900 set of "panniers".
    And knowing the desire of BMW owners to perform all of their service work, even for a new bike themselves - as evident in may other posts in this forum - a BMW dealer will not have this revenue stream.

    Seriously, if making money with a bike dealership would be a walk in the park, I would do it. I had the chance. Crunching the numbers ,including the initial investment, which has to be financed, I decided against it.
    Even considering that there was a restaurant in the mix which would have helped to spread the building overhead.
    I admire motorcycle dealers for their bravery to stay in business and put up with us as customers who think they all are entitled to a better deal than the guy who was in the shop just before them.

  2. #32
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    Quote Originally Posted by EMSimon View Post
    Some of these items you list seem to be very typical for certain motorcycle brands/dealers and very untypical for others. What dealer, other than HD will sell a $1,500 exhaust sytem to a new bike customer??
    Actually, many dealers. Exhaust systems sell well and they are usually expensive.

    Quote Originally Posted by EMSimon View Post
    And knowing the desire of BMW owners to perform all of their service work, even for a new bike themselves - as evident in may other posts in this forum - a BMW dealer will not have this revenue stream.
    The vast majority of owners do not self-maintain. We have many customers who do not know how to change a turn signal bulb. In addition, we did approximately 4,000 repair orders per year. And, the headaches that go along with that number. Say you have an average of 4 labor lines per repair order and you generate 4,000 repair orders a year. That's a MINIMUM of 16,000 opportunities to make a mistake!! To say nothing of the mistakes that can be made at a service counter. And, yes it CAN be fun!!

    Quote Originally Posted by EMSimon View Post
    Seriously, if making money with a bike dealership would be a walk in the park, I would do it. I had the chance. Crunching the numbers ,including the initial investment, which has to be financed, I decided against it.
    Even considering that there was a restaurant in the mix which would have helped to spread the building overhead.
    I admire motorcycle dealers for their bravery to stay in business and put up with us as customers who think they all are entitled to a better deal than the guy who was in the shop just before them.
    Car OEM's are very reluctant to allow people to buy a car store if they have zero car bussiness experience. It does happen but it's not common. Motorcycle OEM's are probably a bit more permissive in that respect but an interesting fact remains: Many car stores that own a bike store are not able to keep the bike store profitable. Although the 2 businesses are almost identical the differences can kill you if you don't have a motorcycle skill set. Having a well run dealership, or multiples thereof, can be exceptionally fun and challenging at the same time. I for one love the business!

  3. #33
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    Quote Originally Posted by EMSimon View Post
    Some of these items you list seem to be very typical for certain motorcycle brands/dealers and very untypical for others. What dealer, other than HD will sell a $1,500 exhaust sytem to a new bike customer??
    And what Ducati dealer will sell a $900 set of "panniers".
    And knowing the desire of BMW owners to perform all of their service work, even for a new bike themselves - as evident in may other posts in this forum - a BMW dealer will not have this revenue stream.

    Seriously, if making money with a bike dealership would be a walk in the park, I would do it. I had the chance. Crunching the numbers ,including the initial investment, which has to be financed, I decided against it.
    Even considering that there was a restaurant in the mix which would have helped to spread the building overhead.
    I admire motorcycle dealers for their bravery to stay in business and put up with us as customers who think they all are entitled to a better deal than the guy who was in the shop just before them.
    Not sure how far you looked into operating a motorcycle dealership..but here are a few routine items you questioned for BMW and Ducati bikes and yes people buy them. And I agree with Billy, BMW shops are chuck full of customer bikes, there for routine maintenance as well as repair. The vast majority of BMW riders do not do their own service work (other than possible crankcase oil changes) regardless of what you might assume from reading this forum.

    I think you were smart in not entering the motorcycle business, especially one tied to a restaurant, neither is an easy path to success.


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    Jesse luggage for GSA - $1590

    Full set aluminum luggage with locks, mounts from BMW has a $2,000 area potential.

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  4. #34
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    Quote Originally Posted by 36654 View Post
    As the consumer, your job is to get the best price to maximize the value of your income.
    Good point. But you need to maximize the value of your purchase as well. And that does not always boil down to dollars. Take care of those that take care of you. Why give business to someone who really shows no desire to take care of your long term needs? That's rewarding someone who doesn't deserve to be rewarded.

  5. #35
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    Quote Originally Posted by billy walker View Post
    Good point. But you need to maximize the value of your purchase as well. And that does not always boil down to dollars. Take care of those that take care of you. Why give business to someone who really shows no desire to take care of your long term needs? That's rewarding someone who doesn't deserve to be rewarded.
    And, how many of those "long term" dealerships has BMW taken care of? The motorcycles aren't an investment, they're a product. If one dealer or brand can't fill your repair needs go to another. That's how I ended up with BMW back in 1985. At that time, it was really difficult to get repair parts for a few year old Japanese bike, but BMW parts were available, at least, by mail order. However, my "local" dealership has changed several times in the 28-yrs;

    Shollys - Harrisburg, PA (DEAD)
    Franks BMW - Mountville, PA (DEAD)
    Country Cycle - Williampsport, PA (DEAD)
    ???BMW - Windber, PA dealership (DEAD)
    Heritage BMW - Mckeesport, PA (DEAD)
    Velocity - Harrisburg, PA (OPERATING)
    European MC of Pgh - Pittsburgh, PA (OPERATING)
    Hermy's - Port Clinton, PA (OPERATING)
    Kissel's - State College, PA (OPERATING)

    Of that list, only Hermy's is a long term BMW dealer...................
    Cave contents: 99 R11RS, 2013 Toyota Tacoma, 03 Simplicity Legacy, 97 Stihl FS75, Dewalt DW625 & DW744

  6. #36
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    Quote Originally Posted by 36654 View Post
    And, how many of those "long term" dealerships has BMW taken care of? The motorcycles aren't an investment, they're a product. If one dealer or brand can't fill your repair needs go to another. That's how I ended up with BMW back in 1985. At that time, it was really difficult to get repair parts for a few year old Japanese bike, but BMW parts were available, at least, by mail order. However, my "local" dealership has changed several times in the 28-yrs;

    Shollys - Harrisburg, PA (DEAD)
    Franks BMW - Mountville, PA (DEAD)
    Country Cycle - Williampsport, PA (DEAD)
    ???BMW - Windber, PA dealership (DEAD)
    Heritage BMW - Mckeesport, PA (DEAD)
    Velocity - Harrisburg, PA (OPERATING)
    European MC of Pgh - Pittsburgh, PA (OPERATING)
    Hermy's - Port Clinton, PA (OPERATING)
    Kissel's - State College, PA (OPERATING)

    Of that list, only Hermy's is a long term BMW dealer...................
    That's quite a few stores. I'm not familiar with PA to any degree. What is your definition of local?

    What do you mean by your sentence: "And, how many of those "long term" dealerships has BMW taken care of?" BMW NA is not concerned with taking care of its customers?

  7. #37
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    Quote Originally Posted by 36654 View Post
    And, how many of those "long term" dealerships has BMW taken care of? The motorcycles aren't an investment, they're a product. If one dealer or brand can't fill your repair needs go to another. That's how I ended up with BMW back in 1985. At that time, it was really difficult to get repair parts for a few year old Japanese bike, but BMW parts were available, at least, by mail order. However, my "local" dealership has changed several times in the 28-yrs;

    Shollys - Harrisburg, PA (DEAD)
    Franks BMW - Mountville, PA (DEAD)
    Country Cycle - Williampsport, PA (DEAD)
    ???BMW - Windber, PA dealership (DEAD)
    Heritage BMW - Mckeesport, PA (DEAD)
    Velocity - Harrisburg, PA (OPERATING)
    European MC of Pgh - Pittsburgh, PA (OPERATING)
    Hermy's - Port Clinton, PA (OPERATING)
    Kissel's - State College, PA (OPERATING)

    Of that list, only Hermy's is a long term BMW dealer...................
    Something else MAY be at play here. You probably have little to no need for a dealer. For those with less knowledge a good dealer becomes like a valued partner. A bad dealer becomes a waste of time. The fact that BMW dealers tend to be enthusiasts is a good thing. The fact that BMW dealers tend to be enthusiasts is a bad thing. Sometimes a very bad thing. Like any job you need skill sets. Not many have the skills to run a busy dealership. Just like many can't run an accounting practice or operate on people. Every one has their own skill set and people may need a helping hand for their hobby's. That's where a good dealer comes in handy.

    Almost everyone who enters the motorcycle business starts out as an enthusiast. Many never make the transition to motorcycle business person. And, that's where the customer loses. And, maybe that is why you have had the need to travel the countryside to find a dealer?

  8. #38
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    Well stated Billy. Back in 1980's I did part time sales work for a very professional dealership. At that time they sold the top four Asian brands, BMW and HD. They had an excellent business model and it remains so to this day. However, they haven't carried BMW since '94 and now have only HD, Honda and Kawasaki.

    The second dealer I was associated with was just the opposite when it came to having a sound business model and philosophy. It wasn't one aspect that closed this business. It was a combination of aliening customers with shoddy repair work, to some extent their pricing model on parts and accessories and a total lack of money management. They went so far as to alienate other BMW dealers when it came to inventory sharing (trading) and a general inability to build profitable relationships for all involved. My position was a perfect example...I worked 10 to 20 hours a week, IF I WANTED TO. I was there to be the BMW guy, but BMW was not really on their radar. It was so loosely ran that my showing up on an intermittent basis was quite acceptable. They had the BMW franchise for a number of years, but never developed it to any extent. They had an adversarial relationship with the BMW rep as well as their offsite parent owner.

    It's amazing they lasted as long as they did. And they lasted that long because they offered new models at $500.00 over invoice - up front! All the customer had to do was act interested in the unit and the low offer, by the dealer, was made. They would sell AT A LOSS if a model sat there too long (some were there over two years). I found this a crazy way to do business, but they thought metric sales were the only profit center with meaning. Eventually they lost the franchise....I thought BMWNA bent over backwards to help them, but they were a lost cause.

    So there you have two opposite examples of spectrum. And yes, you'd pay more at the first example dealership...and still can. The second example is now gone and many of their customers are thankful...and/or should be.
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  9. #39
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    Billy, the history is that plenty of good dealers are gone thanks to BMW NA.
    For years, BMW forced them to be single brand dealerships or they wouldn't approve them.
    And they had to completely renovate the buildings to conform to the new look or they would lose the dealership.

    I hope that has changed, as my local H-D dealership recently became H-D/BMW.

  10. #40
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    Quote Originally Posted by ClassicVW View Post
    Billy, the history is that plenty of good dealers are gone thanks to BMW NA.
    For years, BMW forced them to be single brand dealerships or they wouldn't approve them.
    And they had to completely renovate the buildings to conform to the new look or they would lose the dealership.

    I hope that has changed, as my local H-D dealership recently became H-D/BMW.
    Given the fact that NA is located in Woodcliff Lake and Bergen County had no representation for years it may have been I do think they made a good choice with Bergen H-D. I don't know this for fact but with the overall decline in the motorcycle business I imagine Bergen was happy enough to take on BMW. Something that may have not occurred had H-D kept increasing sales. Bergen's good people so hopefully they can build a BMW staff with some depth in a reasonable time frame. It ain't easy. A stand-along BMW store in Bergen County would basically equal suicide and I guess even BMW realized that at some point in time. At one point they were actually running motorcycle sales through a BMW car store up on 17 South in Ramsey. That mix doesn't typically work well although a few have pulled it off.

    The old time BMW stores were pretty much a disaster. BMW NA really needed to address that issue but they have probably gone too far especially so in today's market. Having said that if more dealers listened to some of the good information BMW has to hand out it would benefit the dealer network as a whole. IMO. Most of BMW's plans were difficult to pull off when the economy collapsed and many stores did pay the price. How much of that was due to poorly managed stores versus the economy is extremely difficult to tell.

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    My opinion, but I'd definitely put most of the blame on BMW, some on the economy, and less on the dealers.
    Yes, there were some dealers that weren't very good, but quite a few good ones were victims too.

    There's a whole backstory as to the financial woes of Bergen H-D. I think BMW came around at the right time, and it may be good for them. (the dealer)

  12. #42
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    Quote Originally Posted by ClassicVW View Post
    My opinion, but I'd definitely put most of the blame on BMW, some on the economy, and less on the dealers.
    Yes, there were some dealers that weren't very good, but quite a few good ones were victims too.

    There's a whole backstory as to the financial woes of Bergen H-D. I think BMW came around at the right time, and it may be good for them. (the dealer)
    Well, as you've probably seen I'm pretty quick to blame BMW. But sometimes the dealer just needs to get their act together.

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    Quote Originally Posted by billy walker View Post
    Well, as you've probably seen I'm pretty quick to blame BMW. But sometimes the dealer just needs to get their act together.
    No, Have you posted here before, I hadn't noticed....

  14. #44
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    Quote Originally Posted by ClassicVW View Post
    No, Have you posted here before, I hadn't noticed....
    Hey, I can take my fair share of knocks .

  15. #45
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    Quote Originally Posted by billy walker View Post
    Well, as you've probably seen I'm pretty quick to blame BMW. But sometimes the dealer just needs to get their act together.
    I agree with the latter but why the former? I am just curious to understand your reasons.
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