KTM fire sale may have started

scootscheerer wrote:

If the Euro price list that I saw carries to the US, I'm guessing this is the "new" price that the dealers pay for the bikes...

If the Euro price list that I saw carries to the US, I'm guessing this is the "new" price that the dealers pay for the bikes s I wouldn't expect anything less than that except removing some of the fees. In my state, a dirt bike is a certificate and not a title. There are no Husq dealers in Sc so most will sell to my with no sales tax. Fair deal to me. It's unusually warm for Feb so my itch to buy is getting pretty bad.

Village Idiot wrote:

Just a friendly word of warning - be careful buying a dirt bike from an out of state dealer if you live in SC and they...

Just a friendly word of warning - be careful buying a dirt bike from an out of state dealer if you live in SC and they don't collect sales tax from you. If an out of state dealer doesn't collect the sales tax from a SC resident, the resident is supposed to declare the purchase on their state income tax and pay a "Use Tax" equivalent to what the SC sales tax would have been on the purchase. This also covers internet purchases (implemented back before they started charging sales tax on most internet sales). 

The SC  DOR noticed a large dropoff in sales tax collected on ATVs and dirt bikes some years ago and put together a task force to audit dealers in nearby states and see if they were collecting the sales tax (people were crossing the state lines in several SE states to avoid the sales tax). If the SC buyer didn't pay the tax at the time of purchase, the DOR would see if they paid it on their state income tax. If it didn't show up as paid in either case, they sent them a letter with a bill for the taxes AND a big penalty along with accrued interest from the date of purchase. The best part is that there isn't a sunset clause on this law - they can come after you 50 years after the purchase for all the taxes, penalties and accrued interest. And once they've got you on their radar, they'll keep an eye on you. 

Hope it helps.

ryanp.mcpherson wrote:

unless dealers are getting a rebate back from KTM when they warranty register them, I wouldnt expect dealers to just start losing money by selling them...

unless dealers are getting a rebate back from KTM when they warranty register them, I wouldnt expect dealers to just start losing money by selling them below cost. The best thing for KTM to do would be sell their overstock/leftover vehicles cheaper to dealers so they are incentivized to keep last years model with a package on the floor plan and pricing. 

kawasa84 wrote:

damn, but if you're that worried about interest rates buying a new dirt bike, maybe you can't afford one. You're blaming everyone else for your problems...

damn, but if you're that worried about interest rates buying a new dirt bike, maybe you can't afford one. You're blaming everyone else for your problems. Wow

ryanp.mcpherson wrote:

unless dealers are getting a rebate back from KTM when they warranty register them, I wouldnt expect dealers to just start losing money by selling them...

unless dealers are getting a rebate back from KTM when they warranty register them, I wouldnt expect dealers to just start losing money by selling them below cost. The best thing for KTM to do would be sell their overstock/leftover vehicles cheaper to dealers so they are incentivized to keep last years model with a package on the floor plan and pricing. 

mx617 wrote:

Generally yes, but there comes a point where your inventory continues to devalue and you create bigger losses.As an example let's say you're selling a $10k...

Generally yes, but there comes a point where your inventory continues to devalue and you create bigger losses.

As an example let's say you're selling a $10k widget that you bought from the widget factory for $9k. It's not selling, but you don't want to lose money so you hang on hoping someone will buy it. A year goes by, you still have the widget but now it's a year older and only worth $8500.  You lower the price to $9k but it still doesn't sell. 

The shop I used to work in did this, and they ended up sitting on piles of old accessories that were virtual worthless (think 5 year old helmets) that they were still only giving 25% for. 

Point of the story, eventually you have to eat the loss and liquidate the inventory, get the cash back in your pocket and move on.  

ryanp.mcpherson wrote:

unless dealers are getting a rebate back from KTM when they warranty register them, I wouldnt expect dealers to just start losing money by selling them...

unless dealers are getting a rebate back from KTM when they warranty register them, I wouldnt expect dealers to just start losing money by selling them below cost. The best thing for KTM to do would be sell their overstock/leftover vehicles cheaper to dealers so they are incentivized to keep last years model with a package on the floor plan and pricing. 

mx617 wrote:

Generally yes, but there comes a point where your inventory continues to devalue and you create bigger losses.As an example let's say you're selling a $10k...

Generally yes, but there comes a point where your inventory continues to devalue and you create bigger losses.

As an example let's say you're selling a $10k widget that you bought from the widget factory for $9k. It's not selling, but you don't want to lose money so you hang on hoping someone will buy it. A year goes by, you still have the widget but now it's a year older and only worth $8500.  You lower the price to $9k but it still doesn't sell. 

The shop I used to work in did this, and they ended up sitting on piles of old accessories that were virtual worthless (think 5 year old helmets) that they were still only giving 25% for. 

Point of the story, eventually you have to eat the loss and liquidate the inventory, get the cash back in your pocket and move on.  

Two Stroke wrote:

Margins under a $1000? On some of the smaller dirt bikes if you sell them at retail you may lose a few dollars or maybe make...

Margins under a $1000? On some of the smaller dirt bikes if you sell them at retail you may lose a few dollars or maybe make $50-100. Notice how all the manufacturer adds say plus freight and set up? That's because they charge the dealer the freight. It makes for a short margin unless the dealer charges the customer for it. 

I do remember back in the 70's when 25% margins were the norm but they are long gone. The manufacturers squeezed the margins to as low as 5% on some 4 four wheelers. 

KTM has gotten themselves in trouble by buying up lots of brands and poor financial practices, let's see how it all works out.