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Thread: Msrp ?

  1. #16
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    Quote Originally Posted by akbeemer View Post
    When I bought an R1200R in 2009 I got 14% off MSRP as well as free luggage and mounts. I'm quite certain the dealer did not lose money on the deal.
    It would be interesting to see what kinds of discounts other non-motorcycle industry's give to their customers. What does your mark-up schedule look like? Do you mark up enough in order to provide the ability to mark down and still be profitable? Would anyone here like to 'fess up as to how much their industry discounts? And, whether your industry typically provides for such things as health benefits? If you're a clothing company do your brand new arrivals appear on the shelf at maybe a 30% give or take profit margin? If sold at full list?

    Let's here from some of the audience...

  2. #17
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    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.

  3. #18
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    Quote Originally Posted by EMSimon View Post
    Do you know that? Elaborate, please. What, for example, is the difference between dealer net and retail for a bike that's, let's say, has $15,000 MRSP.
    I think you've already been provided some pretty accurate numbers by Billy and others. I've been retired for a while, but sold BMW bikes part time a few years back. I ordered our inventory and pretty much sold all the BMWs from our multiple brand store. Then the typical margin was 14-17% (if I remember correctly) and there was also a bonus arrange that ran so much per unit. So then, a $20,000 RT provided a $3,000 (or better) gross profit if sold at MSRP. Again, additional bonus money could be added to this. There were also arrangements wherein NA supported sales, of usually out going MY or slow selling models, by allowing additional rebates to dealers (and sometimes announced as an incentive to the public). Demo bikes also came with yet more wholesale discounts, but they were usually required to be demo'ed until 2,000 to 3,000 miles were recorded.

    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.
    MOA #46783
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  4. #19
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    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.
    Marty Hill
    12 GS black/Boxer Cup Replika

    ride till you can't

  5. #20
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    Quote Originally Posted by billy walker View Post
    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?
    At one point when VW Jettas were hot (2000, maybe) there was a "dealer mark-up" of $500-$1000 over MSRP added to every car. Every dealer. No negotiation. Same thing when the Mazda Miata hit the market, if I remember correctly.
    Bill Mayer
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    R1200RT

  6. #21
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    Quote Originally Posted by themayer View Post
    At one point when VW Jettas were hot (2000, maybe) there was a "dealer mark-up" of $500-$1000 over MSRP added to every car. Every dealer. No negotiation. Same thing when the Mazda Miata hit the market, if I remember correctly.
    Mid-80's and Honda Accords came through with new sheet metal and were ultra hot. I snagged the 2nd unit to come out of this particular dealership and paid $1k over MSRP. Sometimes MSRP is nothing more than ink taking up white space on a piece of paper.

  7. #22
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    Quote Originally Posted by billy walker View Post
    Dealer net would be approximately $12,750 plus or minus.
    This would be 15% between dealer net and MSRP. That is quite a bit more than I thought.

  8. #23
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    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.

  9. #24
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    Quote Originally Posted by themayer View Post
    At one point when VW Jettas were hot (2000, maybe) there was a "dealer mark-up" of $500-$1000 over MSRP added to every car. Every dealer. No negotiation. Same thing when the Mazda Miata hit the market, if I remember correctly.
    Around 1998 when the New Beetle went on sale, dealers
    marked them up $2000. A couple of people found others that
    had just purchased one and offered them $5000 to buy it
    from them.

    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.

  10. #25
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    Quote Originally Posted by EMSimon View Post
    This would be 15% between dealer net and MSRP. That is quite a bit more than I thought.
    Maybe, but the reality is many, if not most sales are negotiated therefore the transaction price is substantially less. To my knowledge no one is offering one-price (no haggle) pricing in the world of motorcycling. A good salesman who knows his product and knows how to make quality recommendations theoretically deserves a higher commission than a poor salesman. Of course, one-price pricing is probably viewed as more fair from a customer point of view although in car stores people still try to negotiate the price.

    What do people on the forum feel is a fair margin on a motorcycle sale, or should fairness not enter the picture?

  11. #26
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    Quote Originally Posted by billy walker View Post
    What do people on the forum feel is a fair margin on a motorcycle sale, or should fairness not enter the picture?
    If I am putting myself in a dealer's position and would run a business, I would expect at least a 12% gross margin for a motorcycle sale.
    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?

  12. #27
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    Quote Originally Posted by billy walker View Post
    Maybe, but the reality is many, if not most sales are negotiated therefore the transaction price is substantially less. To my knowledge no one is offering one-price (no haggle) pricing in the world of motorcycling. A good salesman who knows his product and knows how to make quality recommendations theoretically deserves a higher commission than a poor salesman. Of course, one-price pricing is probably viewed as more fair from a customer point of view although in car stores people still try to negotiate the price.

    What do people on the forum feel is a fair margin on a motorcycle sale, or should fairness not enter the picture?
    As always, a "fair margin" is the point at which a (hopefully reasonable) seller and (hopefully reasonable) buyer execute a transaction. Every buyer and every seller has an independent and sometimes different view of that "transaction point". No one else can really decide this for them.
    MOA #46783
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  13. #28
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    Quote Originally Posted by EMSimon View Post
    If I am putting myself in a dealer's position and would run a business, I would expect at least a 12% gross margin for a motorcycle sale.
    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?
    Very realistic point of view for paragraph #1.

    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.

  14. #29
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    Quote Originally Posted by Motodan View Post
    As always, a "fair margin" is the point at which a (hopefully reasonable) seller and (hopefully reasonable) buyer execute a transaction. Every buyer and every seller has an independent and sometimes different view of that "transaction point". No one else can really decide this for them.
    Absolutely true. What really counts is your average gross profit margin, not a unit by unit number. What was your monthly average? How did Q1 average? How about Q2 etc.? Some deals are losers and some are winners and the rest fall in the middle somewhere. Many things come into play for a dealer. The customer need not worry about much except if he was happy with the price.

  15. #30
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    Quote Originally Posted by EMSimon View Post
    If I am putting myself in a dealer's position and would run a business, I would expect at least a 12% gross margin for a motorcycle sale.
    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?
    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.
    MOA #46783
    2014 R1200RT

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