Real cost of a new YZ 250 for a dealership

Two Stroke
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51
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Location
Pine Bluff, AR, USA
1/28/2021 2:55pm
Yamaha does not have the margin that KTM does. There is some "hold back" that the dealer gets at the end of the year but even with that if the dealer doesn't charge freight and set up his net profit is going to be around 5%. Don't forget, someone has to put it together, put gas and oil in it. That someone also has to be taught, and attend school to learn how to fix your bike when it's broke. Then the dealer has to pay insurance on the building, the stock, his personnel, for liability and hope nothing gets stolen. Usually the guy he gives the best deal is the one that will come back and aggravate him the most and say he needs something for free and tell you he spent $8100 and you owe it to him. The guy who got a good deal will likely be a great customer and buy all his parts and accessories from you and give you a chance to make a profit/living.

Enjoy your motorcycle. Go back and support your dealer when you need something else.
22
1/28/2021 3:22pm
Does the guy at the grocery store make a show of saying, "we're selling it at cost?"
APLMAN99 wrote:
Depends on the store, I suppose. I didn’t read anything about anyone “making a show” of anything, especially at the beginning of the purchase. I don’t...
Depends on the store, I suppose. I didn’t read anything about anyone “making a show” of anything, especially at the beginning of the purchase.

I don’t generally have a lot of buyer’s remorse with most of my purchases, and I think that the major reason is that I don’t care how much the item cost the dealer or the merchant. All I care about is if the item I am buying is worth it for me to part with that amount of money.

I think most people would be happier trying to justify the value of the items they purchase rather than focusing on how much someone else may be making by running the business that gets it to market for you to buy it. Those people almost always get crushed when they hear of someone else getting it for a better price than they did, and it sours their whole outlook.

In the example from the OP, either the bike had enough value to make it worth parting with $8,200, or it didn’t. No one else was willing to take that offer, and yet the overall tone is of worry that the dealer might have actually made a GROSS profit of a couple of dollars.

Just an observation that life is just too short to worry about things like that. Pay what the item is worth to you, shop around until someone is willing to sell it at what it is worth to you, absolutely.

Worry about the cost for the seller? Waste of good time and energy.
GrapeApe wrote:
I don't get the impression OP is having remorse or trying to justify his purchase, more of a curiosity. I get it.
Exactly, I really was curious as to why they would sell at their cost , other than me coming back for parts and accessories. From this thread it seems like that would be the only reason to sell at their cost.
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SoCalMX70
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Thousand Oaks, CA, USA
1/28/2021 5:59pm
cloud41 wrote:
Still over priced... Look for a solid used YZ250, they’re out there. I paid 6300 otd for a left over 2017 in August of 2018. I...
Still over priced... Look for a solid used YZ250, they’re out there. I paid 6300 otd for a left over 2017 in August of 2018. I recently found a 2017 with 25ish minutes a guy was selling on Facebook for 6300 with a full exhaust, extra plastics, braces, wheel spacers, seat, stand, oils, etc.
Yeah ok... Like whatever you paid in August 2018 is relevant in the current market.
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captmoto
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Rancho Cucamonga, CA, USA
1/28/2021 6:16pm
The Yamaha 2 stroke line should $1000 less at MSRP. They've definitely amortized any development costs of that bike over 15 years, maybe $1500 on the 250. It's great that they built a bike that has stood the test of time. God knows the four strokes were all over the place in it's development.
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1

The Shop

gristle568
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Nathalie, VA, USA
1/28/2021 6:29pm
I've always considered that if you can get the bike for the msrp price with tax and any fees you are getting a good deal. Right now is just a bad time to expect a good deal on a bike because they are selling.
1
mxbrian15
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Orlando, FL, USA
1/28/2021 6:50pm
I’m pretty sure you made the wrong thread. Should be a “Spoke with my wallet” thread...
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1
Alex.434
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Warner Springs, CA, USA
1/28/2021 7:20pm
Dealers don't make shit on bikes. Tiny margins. They make most of their money on PG&A and especially service.
3
1/28/2021 7:32pm
mxbrian15 wrote:
I’m pretty sure you made the wrong thread. Should be a “Spoke with my wallet” thread...
Well there it is, now I gotta do it tomorrow after I pick it up. You sir are the owner of a brand new " Spoke with my wallet thread". Ill update you with your upgrade tomorrow.
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1
TeamGreen
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Thru-out, CA, USA
1/28/2021 7:41pm
mxbrian15 wrote:
I’m pretty sure you made the wrong thread. Should be a “Spoke with my wallet” thread...
Well there it is, now I gotta do it tomorrow after I pick it up. You sir are the owner of a brand new " Spoke...
Well there it is, now I gotta do it tomorrow after I pick it up. You sir are the owner of a brand new " Spoke with my wallet thread". Ill update you with your upgrade tomorrow.
Brrrrap!
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drivrswntd
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Johnston, RI, USA
1/28/2021 7:47pm
gristle568 wrote:
I've always considered that if you can get the bike for the msrp price with tax and any fees you are getting a good deal. Right...
I've always considered that if you can get the bike for the msrp price with tax and any fees you are getting a good deal. Right now is just a bad time to expect a good deal on a bike because they are selling.
Makes me feel great about my relationship with my local dealer. New FE slightly below MSRP and a total of $300 in shipping and setup.
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BigBoreFan58
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Beverly Hills, CA, USA
1/28/2021 8:35pm
Just shut the dealers down and go direct to consumer. Cut out the middle man IMO.
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kb228
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Mansfield, OH, USA
1/28/2021 8:58pm
Just shut the dealers down and go direct to consumer. Cut out the middle man IMO.
Im all for this. But the cost of bikes wont change.

Typically a product costs 1/2 of msrp to manufacture. The mfg will give 15-20% or sometimes more to a distributor if theyre good and move more product. so say whatever company gives 15% to a distributor, theres still 50% left that goes into cogs and then 35% of that total pie goes to other expenses like payroll, r&d, advertising, and profit.

The only benefit of cutting the middle man in moto is the oem has a larger margin to use towards those expense related items. Maybe give some guys a raise, support more privateers, and put more money into making better bikes. All of which would be awesome. Maybe that would lead to more people riding and increasing bike sales volume and maybe lower bike costs? Idk. KTM would probably just buy beta lol.

Obviously these numbers vary from every company. Walmarts margin and blockbusters margin is very different.
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SLAPAHO
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Newport Beach, CA, USA
Fantasy
1/28/2021 9:09pm Edited Date/Time 1/28/2021 9:17pm
i have no problem paying msrp plus tax and lic. on a bike that is hot at the time... like my 19 kx450, there weren't many available at the time so it was a no brainer.... and i want the dealer to make money and stay open.
what i don't like and won't do is the $995 freight and prep, plus, plus, plus... that's where the dealer gets a bad name and bad reputation.
there's nothing worse than buyer's remorse after getting your new bike. get a decent deal and forget about it... just take it out and enjoy it, don't let a few dollars ruin it for you.. it's not that big of a deal.
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prozach
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Eureka, CA, USA
1/28/2021 9:16pm
Just shut the dealers down and go direct to consumer. Cut out the middle man IMO.
kb228 wrote:
Im all for this. But the cost of bikes wont change. Typically a product costs 1/2 of msrp to manufacture. The mfg will give 15-20% or...
Im all for this. But the cost of bikes wont change.

Typically a product costs 1/2 of msrp to manufacture. The mfg will give 15-20% or sometimes more to a distributor if theyre good and move more product. so say whatever company gives 15% to a distributor, theres still 50% left that goes into cogs and then 35% of that total pie goes to other expenses like payroll, r&d, advertising, and profit.

The only benefit of cutting the middle man in moto is the oem has a larger margin to use towards those expense related items. Maybe give some guys a raise, support more privateers, and put more money into making better bikes. All of which would be awesome. Maybe that would lead to more people riding and increasing bike sales volume and maybe lower bike costs? Idk. KTM would probably just buy beta lol.

Obviously these numbers vary from every company. Walmarts margin and blockbusters margin is very different.
In the mountain bike world that isn't true. Price of bikes is significantly lower for mail order brand like YT. Obviously shipping is more for dirt bikes but that's already built into the price. Cut out profit and dealer setup and the manufacturer could make more while the buyers saves.
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crockett
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CA
1/28/2021 11:51pm
Are bike prices rising with inflation or above?
I paid cad7600 +tax for a 2011 yz250 in 2011..
Not the best data but it is data.
Paid 10,500 cad for a 2020 fc350 this year .. that’s basically
8200 usd .. same price you paid for a yz250? Yikes.
Also what’s with the sour grapes in here because he’s asking about margins?
It’s a worthwhile question.

Do Mercedes dealers make more margins than Honda dealers?
If so why?
I would think the yz250 margins should be as bare bones as any bike out there
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cloud41
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Chicago, IL, USA
Fantasy
1/29/2021 4:58am Edited Date/Time 1/29/2021 5:02am
cloud41 wrote:
Still over priced... Look for a solid used YZ250, they’re out there. I paid 6300 otd for a left over 2017 in August of 2018. I...
Still over priced... Look for a solid used YZ250, they’re out there. I paid 6300 otd for a left over 2017 in August of 2018. I recently found a 2017 with 25ish minutes a guy was selling on Facebook for 6300 with a full exhaust, extra plastics, braces, wheel spacers, seat, stand, oils, etc.
SoCalMX70 wrote:
Yeah ok... Like whatever you paid in August 2018 is relevant in the current market.
It’s a reference, and I I just bought a 2017 with 25 mins on it in the current market for 6300, so, like yeah, whatever I just paid is relevant. The point is there are deals out there if you look hard enough given the bike hasn’t changed.
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Stevo683
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Location
Westerville, OH, USA
1/29/2021 5:22am
The dealers do not own the inventory. They have a "Floor Plan" typically thru GE Financial. So they pay interest on the bikes and pay them off as soon as they are sold. Whatever is left over after the payoff, less-the interest they paid, storage, delivery, set up, insurance, overhead, rent, etc.. Not a good business plan.. why do you think so many dealers went out of business in 2008? People drive 2 hours to save $50 on a TTR50 and wonder why their local dealer is no longer there. Props to the dealers that have a strong service dept. and can survive. Not an easy gig that's for sure!
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yz133rider
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Avondale, PA, USA
1/29/2021 5:27am
Yamaha hasn’t spent a dollar on development on the yzs in 15 years. Their margins should be incredible. If they have slim margins that’s not even logical.
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LungButter
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Yellow Pine, ID, USA
1/29/2021 5:41am
Stevo683 wrote:
The dealers do not own the inventory. They have a "Floor Plan" typically thru GE Financial. So they pay interest on the bikes and pay them...
The dealers do not own the inventory. They have a "Floor Plan" typically thru GE Financial. So they pay interest on the bikes and pay them off as soon as they are sold. Whatever is left over after the payoff, less-the interest they paid, storage, delivery, set up, insurance, overhead, rent, etc.. Not a good business plan.. why do you think so many dealers went out of business in 2008? People drive 2 hours to save $50 on a TTR50 and wonder why their local dealer is no longer there. Props to the dealers that have a strong service dept. and can survive. Not an easy gig that's for sure!
That’s not necessarily always the case, quite a few dealers buy their inventory up front.
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GrapeApe
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Mc Kinney, TX, USA
1/29/2021 5:47am
yz133rider wrote:
Yamaha hasn’t spent a dollar on development on the yzs in 15 years. Their margins should be incredible. If they have slim margins that’s not even...
Yamaha hasn’t spent a dollar on development on the yzs in 15 years. Their margins should be incredible. If they have slim margins that’s not even logical.
They're still paying off the R&D costs of the bold new plastics in 2015
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Robbirob25
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Fort Wayne, IN, USA
1/29/2021 5:59am
philG wrote:
I dont miss working in a dealership at all, it was great when i used to work for free , and they gave me bikes, but...
I dont miss working in a dealership at all, it was great when i used to work for free , and they gave me bikes, but when i got my own shop to run and was doing it 6 days a week, i didnt want to see another bike on the sunday.

Yup... This was me.
1
1/29/2021 6:35am
Mine cost me an 04 YZ250, an 07 250 SX-F, and a couple thousand on top. I was stoked. Enjoy your bike man, you got a good deal.


9
lumpy790
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York, SC, USA
1/29/2021 7:23am
Stevo683 wrote:
The dealers do not own the inventory. They have a "Floor Plan" typically thru GE Financial. So they pay interest on the bikes and pay them...
The dealers do not own the inventory. They have a "Floor Plan" typically thru GE Financial. So they pay interest on the bikes and pay them off as soon as they are sold. Whatever is left over after the payoff, less-the interest they paid, storage, delivery, set up, insurance, overhead, rent, etc.. Not a good business plan.. why do you think so many dealers went out of business in 2008? People drive 2 hours to save $50 on a TTR50 and wonder why their local dealer is no longer there. Props to the dealers that have a strong service dept. and can survive. Not an easy gig that's for sure!
LungButter wrote:
That’s not necessarily always the case, quite a few dealers buy their inventory up front.
I have worked in the MC industry since 1980 and attended Kawasaki’s dealer management. There are 3 pieces in every dealers pie. Sales, Service and parts.

Every month every dealer has a flooring inspector come in and keep track every unit on flooring in the dealership.

Walk into your dealer and look at how many units they have in stock on the sales floor and look at how many crates of new units they have in stock in the back. Now think about every units bank flooring internist has to be paid every month.

Every OEM manufacturer demands minimum units of every model a dealer must buy from them every year. Dealers get 3 months free flooring then ever month they must pay the bank the interest on every unit there over the 3 months. New year 2021 units start rolling in in the fall of 2020 and sit there burning through the 3 month flooring months before customers come in to buy one.

Every dealer must make some profit $ to pay every employees paycheck, pay employee taxes, pay utilities, pay for the building, pay flooring and the list goes on and on.

Years ago in the 80’s I watched a dealer in MD that was caught not paying off after units were sold. All flooring was canceled. Units went back to OEM manufacturers. Doors closed boom gone.
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Stevo683
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Location
Westerville, OH, USA
1/29/2021 7:24am
Stevo683 wrote:
The dealers do not own the inventory. They have a "Floor Plan" typically thru GE Financial. So they pay interest on the bikes and pay them...
The dealers do not own the inventory. They have a "Floor Plan" typically thru GE Financial. So they pay interest on the bikes and pay them off as soon as they are sold. Whatever is left over after the payoff, less-the interest they paid, storage, delivery, set up, insurance, overhead, rent, etc.. Not a good business plan.. why do you think so many dealers went out of business in 2008? People drive 2 hours to save $50 on a TTR50 and wonder why their local dealer is no longer there. Props to the dealers that have a strong service dept. and can survive. Not an easy gig that's for sure!
LungButter wrote:
That’s not necessarily always the case, quite a few dealers buy their inventory up front.
I agree its not always the case, but how many dealers have the couple of million dollars to purchase all of their bikes in their inventory up front? Not any that I dealt with because of the dealer trading/transfers we did. Brutal industry. I had a dealership from 2004-2008. Lost everything I had worked for up to that point when the recession hit. Didn't get any kind of bailout like the banks/automakers did. Took me 10years busting my ass to recover financially. Learned a lot of hard lessons. Live and learn! Stay out of debt kids!
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1/29/2021 7:50am
Dealers don’t make much on units. But they can really get
You out of a pinch In a hurry in other places if you got a great relationship With them.
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Falcon
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Menifee, CA, USA
1/29/2021 7:58am Edited Date/Time 1/29/2021 7:59am
yz133rider wrote:
Yamaha hasn’t spent a dollar on development on the yzs in 15 years. Their margins should be incredible. If they have slim margins that’s not even...
Yamaha hasn’t spent a dollar on development on the yzs in 15 years. Their margins should be incredible. If they have slim margins that’s not even logical.
Yamaha probably has FAT margins on the YZ250. But you aren't buying the YZ from Yamaha. Yamaha sold it to Joe Blow's Downtown Motorsports Yamaha on Quank and Melrose. Trust me, they aren't taking it back now. Joe is the one who was only provided $1500 in margin on it, minus all his costs, and he has to sell it for whatever margin he can.

EDIT: Yamaha Motor USA probably doesn't even have fat margins on the YZ250, either, because guess what? THEY bought it from Yamaha Motor Japan, who is probably the only entity really making decent profit off your motorcycle.
LungButter
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Yellow Pine, ID, USA
1/29/2021 8:10am
Stevo683 wrote:
I agree its not always the case, but how many dealers have the couple of million dollars to purchase all of their bikes in their inventory...
I agree its not always the case, but how many dealers have the couple of million dollars to purchase all of their bikes in their inventory up front? Not any that I dealt with because of the dealer trading/transfers we did. Brutal industry. I had a dealership from 2004-2008. Lost everything I had worked for up to that point when the recession hit. Didn't get any kind of bailout like the banks/automakers did. Took me 10years busting my ass to recover financially. Learned a lot of hard lessons. Live and learn! Stay out of debt kids!
I know of 4 personally that operate that way right now. One common theme is they are all single line dealers, I can't imagine there are too many of the big multi line dealers who are buying inventory from 3-7 brands outright.

Kinda sad just how tough it is to make a go of it.
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STLSharky
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Edwardsville, IL, USA
1/29/2021 8:32am
crockett wrote:
Are bike prices rising with inflation or above? I paid cad7600 +tax for a 2011 yz250 in 2011.. Not the best data but it is data...
Are bike prices rising with inflation or above?
I paid cad7600 +tax for a 2011 yz250 in 2011..
Not the best data but it is data.
Paid 10,500 cad for a 2020 fc350 this year .. that’s basically
8200 usd .. same price you paid for a yz250? Yikes.
Also what’s with the sour grapes in here because he’s asking about margins?
It’s a worthwhile question.

Do Mercedes dealers make more margins than Honda dealers?
If so why?
I would think the yz250 margins should be as bare bones as any bike out there
5 to 11% mark up on Bmws if you pay sticker: no one pays sticker on cars
Moto520
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Schaumburg, IL, USA
1/29/2021 9:24am
i would rather order my bike online and have it shipped directly to my house in a crate. I know how to set it up and all that. I know which bike i'm going to buy and seeing one at the dealer never has an impact on my decision of which bike to buy.

I see the new sales model as being direct to consumer from the builder.
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chuck356
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Danville, IL, USA
1/29/2021 9:30am
I just retired as a dealer after 40+ years, what used to be a fun industry that you could make an ok at best living to a a place I no longer liked as margins on bikes went to nothing, everybody buying parts and accessories on line, and doing youtube repairs until the bike was almost not work repairing.
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