What's Fair????

motoman0
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Bolivar, TN, USA
Edited Date/Time 1/24/2012 9:10am
This is going to open up a can of worms. So what do you feel is fair for a dealer to make on a bike when they sell it?
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GuyB
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8/21/2008 8:22am
Fair? Normal retail markup. They're in it as a business, not as a charity.

You could ask the same question of a gallon of gas, the food you buy, and the house you want.
motoman0
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8/21/2008 8:28am
I think ppl have a misconception of what a dealer makes on each sale. They think we make a killing on each unit. Would like some input on the subject.
mxmat813
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Groton, NY, USA
8/21/2008 8:29am
Most dealers make there money off from parts and service. I worked for a Kawasaki dealer about 10 years ago and dealer cost on a KX 250 was only about a grand lower than retail. Most dealers around here sell there bikes for 300-500 above dealer. I think that's fair. The mark-up on parts is where they make there money. I can't remember the exact numbers but when you buy parts from Kawasaki there is a sticker on the part and it'll have the part number and then another number, like 10.95-50 or something like that. $10.95 is retail price and the 50 is the mark-up. This was years ago though, so it may have changed.
FreshTopEnd
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8/21/2008 8:30am
Enough to stay in business and make a comfortable income.

The Shop

vet954
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8/21/2008 8:37am
What ever the supply vs. demand will allow. In many parts of the country the riding season is only 4-5 months. There are less riders and the bikes last longer. Most dealers have left over inventory from prior years. They can't even recoup cost after paying floor plan charges for 18 months.
R-acer
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8/21/2008 8:49am
motoman0 wrote:
This is going to open up a can of worms. So what do you feel is fair for a dealer to make on a bike when...
This is going to open up a can of worms. So what do you feel is fair for a dealer to make on a bike when they sell it?
20%
MX7MX
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8/21/2008 9:32am
vet954 wrote:
What ever the supply vs. demand will allow. In many parts of the country the riding season is only 4-5 months. There are less riders and...
What ever the supply vs. demand will allow. In many parts of the country the riding season is only 4-5 months. There are less riders and the bikes last longer. Most dealers have left over inventory from prior years. They can't even recoup cost after paying floor plan charges for 18 months.
the bikes last longer

Very true.....thanks to the 4 strokes.
Slow ~ Pro
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8/21/2008 9:33am Edited Date/Time 4/16/2016 8:07pm
People think there is a

huge mark up on motorcycles...there's not !
On MX bikes a $200.00 over invoice is actually a lot for a dealer to make, but rarely do. Street bikes have a better margin

Now when a sales man tries to up the Document fee, prep., and shipping, it gets out of hand.

Not to mention extended warranties.
When I sold for a few months the dealer I worked for wanted me to sell a $65.00 up grade for $595.00 I could not, and would not, do it.

If a dealer was to sell a bike for suggested retail, tax, & license, they would be happy. But everyone wants a discount.

Few other business's people walk in and expect a discount.
8/21/2008 9:41am Edited Date/Time 8/21/2008 9:42am
motoman0 wrote:
This is going to open up a can of worms. So what do you feel is fair for a dealer to make on a bike when...
This is going to open up a can of worms. So what do you feel is fair for a dealer to make on a bike when they sell it?
R-acer wrote:
20%
I worked for several dealerships in parts and in sales. I was sales manager for some time also.20% profit on a bike would put you paying over retail on each and every bike I can promise that. I would be happy to make a 20% profit on new units as well as parts. Most aftermarket parts(boots, helmets, goggles, tearoffs, tires, tubes, etc) only have a 30-40 % markup anyway. Tires we are lucky to make $5.00 off of each one and with a rear tire retailing at $100 that is a small profit. I make more money installing them than I do off of selling them.
8/21/2008 9:46am
I dont understand how shops can last. Whenever ive bought a bike they say youre paying just above dealer price. If thats true they are losing money on bikes, because the salesmen gets commision, correct?

I do know as far as parts go they make a killing, not necessarily on clothing, I think they do decent on that, but on bike parts that break. Plano Honda had a good 200% markup on many parts.
Matt Fisher
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8/21/2008 9:49am
vet954 wrote:
What ever the supply vs. demand will allow. In many parts of the country the riding season is only 4-5 months. There are less riders and...
What ever the supply vs. demand will allow. In many parts of the country the riding season is only 4-5 months. There are less riders and the bikes last longer. Most dealers have left over inventory from prior years. They can't even recoup cost after paying floor plan charges for 18 months.
MX7MX wrote:
the bikes last longer

Very true.....thanks to the 4 strokes.
And sales and people staying in the sport are down, noise and track closures are up.... thanks to the 4 strokes.

And as usual, you're seriously confused if you think that a 450cc 4 stoke lasts as long as a big 2 stroke, or that a 250cc 4 stroke lasts as long as a 250cc 2 stroke.
Slow ~ Pro
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8/21/2008 9:50am
The salesman usually gets 20% commission on the profit.
MX bikes make very little.

Parts retail, are anywhere from 30% - 100% with as little as 10 % mark up depending on the item.

TDB519
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8/21/2008 10:43am
What dealers neglect to tell you when they say your getting it just above dealer cost is that they get an additional kick back from the manufactuer(SP?) after the bike is sold. But yea parts and service is were they make most of there money.
vet954
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8/21/2008 11:03am
vet954 wrote:
What ever the supply vs. demand will allow. In many parts of the country the riding season is only 4-5 months. There are less riders and...
What ever the supply vs. demand will allow. In many parts of the country the riding season is only 4-5 months. There are less riders and the bikes last longer. Most dealers have left over inventory from prior years. They can't even recoup cost after paying floor plan charges for 18 months.
MX7MX wrote:
the bikes last longer

Very true.....thanks to the 4 strokes.
And sales and people staying in the sport are down, noise and track closures are up.... thanks to the 4 strokes. And as usual, you're seriously...
And sales and people staying in the sport are down, noise and track closures are up.... thanks to the 4 strokes.

And as usual, you're seriously confused if you think that a 450cc 4 stoke lasts as long as a big 2 stroke, or that a 250cc 4 stroke lasts as long as a 250cc 2 stroke.
I was refering to the selling prices of bikes are lower in the northern states and that the bikes last longer in the northern states because we only get to ride 3-4 months per year.

I have yet to have any problems with a four stroke. Rebuild at 50 hours w/ new valves.

I got back into the sport because of the four strokes and so did many of my friends.

Rode two strokes for 20 years and would NEVER go back.
flynbrian
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Geff, IL, USA
8/21/2008 11:24am
I will never buy a four stroke race bike. I don't care If all I have to ride is an 85.
My problem with dealers is why don't you just tell me what their cost is, and how much they are going to make, I don't want them to go out of business. And I don't buy bikes from people I don't like. I want them to be able to feed their family. I would just like a little honesty and fair treatment.
lostboy819
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8/21/2008 11:43am Edited Date/Time 4/16/2016 8:07pm
TDB519 wrote:
What dealers neglect to tell you when they say your getting it just above dealer cost is that they get an additional kick back from the...
What dealers neglect to tell you when they say your getting it just above dealer cost is that they get an additional kick back from the manufactuer(SP?) after the bike is sold. But yea parts and service is were they make most of there money.
Its not a kickback its called dealer holdback and it is what the manufacture pays a dealer to sell the bike and they wont tell you how much it is because its none of your business. The dealer also has to pay his floorplan which is the monthly finance charges he has when the bike sits on the floor and does not sell.

If a bike sits in inventory too long it can wipe out the holdback , some times a manufacture will floorplan bikes for the dealer on some hard to sell models to get the dealer to order more of them.

Some manufactures will require you order some harder to sell models to get more of the hot selling bikes and on some hard to get models the manufacture will let the better performing dealer have more of them then low selling dealers.

To me "whats fair " is when both the buyer and seller are both happy but I also believe something is worth only as much as someone will pay.
GuyB
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8/21/2008 11:48am
I don't get the part about customers wanting to know what the dealer's cost is on a bike. Try that same logic with a homebuilder, and see if you can get an answer.
lostboy819
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8/21/2008 11:53am
GuyB wrote:
I don't get the part about customers wanting to know what the dealer's cost is on a bike. Try that same logic with a homebuilder, and...
I don't get the part about customers wanting to know what the dealer's cost is on a bike. Try that same logic with a homebuilder, and see if you can get an answer.
LOL......... I like when a rider wants free stuff and uses the logic that we are using him for "free advertising" because he bought a bike there.
rocrac
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8/21/2008 12:10pm Edited Date/Time 8/21/2008 12:21pm
nm
TDB519
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Lewiston, ID, USA
8/21/2008 12:20pm
TDB519 wrote:
What dealers neglect to tell you when they say your getting it just above dealer cost is that they get an additional kick back from the...
What dealers neglect to tell you when they say your getting it just above dealer cost is that they get an additional kick back from the manufactuer(SP?) after the bike is sold. But yea parts and service is were they make most of there money.
lostboy819 wrote:
Its not a kickback its called dealer holdback and it is what the manufacture pays a dealer to sell the bike and they wont tell you...
Its not a kickback its called dealer holdback and it is what the manufacture pays a dealer to sell the bike and they wont tell you how much it is because its none of your business. The dealer also has to pay his floorplan which is the monthly finance charges he has when the bike sits on the floor and does not sell.

If a bike sits in inventory too long it can wipe out the holdback , some times a manufacture will floorplan bikes for the dealer on some hard to sell models to get the dealer to order more of them.

Some manufactures will require you order some harder to sell models to get more of the hot selling bikes and on some hard to get models the manufacture will let the better performing dealer have more of them then low selling dealers.

To me "whats fair " is when both the buyer and seller are both happy but I also believe something is worth only as much as someone will pay.
Sorry wrong term. But nevertheless the get a dollar amount after selling.
8/21/2008 12:28pm Edited Date/Time 8/21/2008 12:32pm
TDB519 wrote:
What dealers neglect to tell you when they say your getting it just above dealer cost is that they get an additional kick back from the...
What dealers neglect to tell you when they say your getting it just above dealer cost is that they get an additional kick back from the manufactuer(SP?) after the bike is sold. But yea parts and service is were they make most of there money.
lostboy819 wrote:
Its not a kickback its called dealer holdback and it is what the manufacture pays a dealer to sell the bike and they wont tell you...
Its not a kickback its called dealer holdback and it is what the manufacture pays a dealer to sell the bike and they wont tell you how much it is because its none of your business. The dealer also has to pay his floorplan which is the monthly finance charges he has when the bike sits on the floor and does not sell.

If a bike sits in inventory too long it can wipe out the holdback , some times a manufacture will floorplan bikes for the dealer on some hard to sell models to get the dealer to order more of them.

Some manufactures will require you order some harder to sell models to get more of the hot selling bikes and on some hard to get models the manufacture will let the better performing dealer have more of them then low selling dealers.

To me "whats fair " is when both the buyer and seller are both happy but I also believe something is worth only as much as someone will pay.
OMG The dealer can retire on a whopping $100-$150 on the holdback of a 250 or 450 dirtbike. Try paying there floorplan, insurance, lightbill, payroll, taxes, workman comp, and etc. BTW car dealers make the same so next time you buy a car make sure they knock that off the price also. Only it is alittle more on a car. LOL

X2 on Buyer and Seller both being happy.
Jabjr222
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8/21/2008 12:32pm
I've sold bikes in a dealership for a couple of years, and while it was fun, I can promise you the dealer isn't making a killing on you. Motocross bikes, as much a fan and rider as I am, I hated selling them because you don't make any money on them as there is no markup in the first place and they take more time because the guy buying the bike knows he can get it cheaper elsewhere and feels he is owed something.

As for the street side of it, there is better money there but not by much. If you are lucky, you only have one or two dealers within a short drive and if you don't discount to make the sale, they will. But oh my, if I could sell a couple of goldwings, that would give me a decent start to the month.

Now, what I don't like is the freight and prep charges you get hit with. I had to look people in the eye and tell them it was a legit charge. My sales manager told me later that the factories paid for both of those. Can anyone tell me if this is true?
8/21/2008 12:56pm Edited Date/Time 4/16/2016 8:07pm
The factory does not pay for freight or prep. The freight is added on to the cost of the bike so it really depends on how you look at it. When fuel first went up the factories added a fuel surcharge on top of the cost. The true cost of the bike does not include freight but you do have to pay the factory for the freight when you sell the bike and pay it off fromt he floorplan company. The units are delivered to the dealerships in crates and the dealership has to pay a technician to assemble those bikes. So you do not have to pay the manufacturer you have to pay the tech. In order to properly track profit and loss it has to be figured into the cost of the bike. The tech is also suppose to check all the nuts, bolts, air pressure, coolant, oil level, add a full tank of fuel, etc. Most techs do not do it properly. Now these bikes are not completly disassembled. For example a dirtbike comes with the front fender, front wheel, levers, front number plate and etc in the box and have to be installed. I am sure every manufacturer is different though.

Dealer Cost = True Cost + Freight + Prep + Fuel (these days)
Jabjr222
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8/21/2008 1:01pm
The factory does not pay for freight or prep. The freight is added on to the cost of the bike so it really depends on how...
The factory does not pay for freight or prep. The freight is added on to the cost of the bike so it really depends on how you look at it. When fuel first went up the factories added a fuel surcharge on top of the cost. The true cost of the bike does not include freight but you do have to pay the factory for the freight when you sell the bike and pay it off fromt he floorplan company. The units are delivered to the dealerships in crates and the dealership has to pay a technician to assemble those bikes. So you do not have to pay the manufacturer you have to pay the tech. In order to properly track profit and loss it has to be figured into the cost of the bike. The tech is also suppose to check all the nuts, bolts, air pressure, coolant, oil level, add a full tank of fuel, etc. Most techs do not do it properly. Now these bikes are not completly disassembled. For example a dirtbike comes with the front fender, front wheel, levers, front number plate and etc in the box and have to be installed. I am sure every manufacturer is different though.

Dealer Cost = True Cost + Freight + Prep + Fuel (these days)
I didn't know who to believe on this. I know the factories pay some on the assembly or at least that's what I was told by my sales manager (Honda and Suzuki dealership).

I don't have a problem with freight and prep if it is a legitimate charge, but we had other local dealers, who were heavy discounters, telling folks that freight and prep are bogus charges. It made my job impossible when we had to fight over the charges. No way to win.
8/21/2008 1:07pm
Jabjr222 wrote:
I didn't know who to believe on this. I know the factories pay some on the assembly or at least that's what I was told by...
I didn't know who to believe on this. I know the factories pay some on the assembly or at least that's what I was told by my sales manager (Honda and Suzuki dealership).

I don't have a problem with freight and prep if it is a legitimate charge, but we had other local dealers, who were heavy discounters, telling folks that freight and prep are bogus charges. It made my job impossible when we had to fight over the charges. No way to win.
I have been there and done that. I always used model comparison features/benefits and what was your OTD price to help me. As long as you educate the customer on what he or she is looking at and you know what other unit they are comparing it too along with there OTD price take that to your sales manager and go to bat for the customer.
motoman0
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8/21/2008 3:03pm
Have seen $40 profit on deals ,then they ask for freebies. What, do you do let them walk? Hope they will buy gear and a few other things?As for you "?" dookiepie37 YES! But ppl are just a # to them.
kawboy388
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8/21/2008 3:32pm
What about the profit dealers make on bikes that have been traded in ? Ya, i know it's dumb to trade in instead of selling on your own. A guy I sometimes bs with at the track traded his 06 KX250F in July of 06, got 2100 for it. The dealer sold it for 4500 and they did nothing to the bike, didn't even replace the roached rear tire.
lostboy819
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8/21/2008 4:02pm Edited Date/Time 8/21/2008 4:05pm
kawboy388 wrote:
What about the profit dealers make on bikes that have been traded in ? Ya, i know it's dumb to trade in instead of selling on...
What about the profit dealers make on bikes that have been traded in ? Ya, i know it's dumb to trade in instead of selling on your own. A guy I sometimes bs with at the track traded his 06 KX250F in July of 06, got 2100 for it. The dealer sold it for 4500 and they did nothing to the bike, didn't even replace the roached rear tire.
Used bikes can be your best money maker. Also buying from bike auctions. A dealer can sell a used bike for more than a private seller most times because they have a professional sales person, Floor trafic and they can provide financing. Used bike sales are very important.
8/21/2008 4:09pm
Jabjr222 wrote:
I didn't know who to believe on this. I know the factories pay some on the assembly or at least that's what I was told by...
I didn't know who to believe on this. I know the factories pay some on the assembly or at least that's what I was told by my sales manager (Honda and Suzuki dealership).

I don't have a problem with freight and prep if it is a legitimate charge, but we had other local dealers, who were heavy discounters, telling folks that freight and prep are bogus charges. It made my job impossible when we had to fight over the charges. No way to win.
I have been there and done that. I always used model comparison features/benefits and what was your OTD price to help me. As long as you...
I have been there and done that. I always used model comparison features/benefits and what was your OTD price to help me. As long as you educate the customer on what he or she is looking at and you know what other unit they are comparing it too along with there OTD price take that to your sales manager and go to bat for the customer.
The MFG will pay the dealer a small fee for assembly but it is reflected in true cost. When you see a dealer cost sheet, it includes freight (legit) minus dealer assembly credit (very small amount). I used to tell people you would pay me double what freight and prep was if you had to 1st pay to get it here, then unload it, build it, prep it, haul the excess off and pdi the bike.
kawboy388
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8/21/2008 4:55pm
kawboy388 wrote:
What about the profit dealers make on bikes that have been traded in ? Ya, i know it's dumb to trade in instead of selling on...
What about the profit dealers make on bikes that have been traded in ? Ya, i know it's dumb to trade in instead of selling on your own. A guy I sometimes bs with at the track traded his 06 KX250F in July of 06, got 2100 for it. The dealer sold it for 4500 and they did nothing to the bike, didn't even replace the roached rear tire.
lostboy819 wrote:
Used bikes can be your best money maker. Also buying from bike auctions. A dealer can sell a used bike for more than a private seller...
Used bikes can be your best money maker. Also buying from bike auctions. A dealer can sell a used bike for more than a private seller most times because they have a professional sales person, Floor trafic and they can provide financing. Used bike sales are very important.
Ya that was kinda my point, but doesn't it sound like they screwed this guy pretty good ? Yes it was his fault (stupidity) for taking the deal. He also paid full pop for the new KX450F he was trading the 250 in for.

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