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Someone earlier brought up a very good analogy... airlines and ticketmaster. They list one price, and then hit you with a list of service charges upon checkout.
It's annoying. I hate it too. But they do it because it results in greaters sales AND profits. That's just a fact.
Ive already explained, if the the mfgs/dealers built the setup & freight into MSRP, it wouldnt help sales or revenue. it would hurt both.
Mfgs & Dealers arent out to piss people off for the fun of it. They do what works, dictated by consumer habits.
I mean if they can’t get their product to the dealer cheap enough that the dealer can sell it at the MSRP and not just keep the lights on, but make a profit...then there is an issue with the dealer and manufacturer business model. And I’m not sure how those prices are negotiated...so I don’t know if the dealers are at the mercy of the manufacturer or what?
The Shop
You asked if margins have remained the same over the years. In the manufactures eyes they have. In my eyes(the dealer) they haven't and I will give you an example. In 2015 a particular yellow brand of 450 received a ton of new updates. My rep called all excited expecting me to be fired up and ready to order a pile of them. I told him that I was not as excited because it still looked the same. He came right back at me with "Well at least we are the only one that the price didn't go up!". I said "REALLY?!!". Don't tell me the fucking price didn't go up(I hated to cuss at this rep cause he was great)!! He told me to look at the sheet that the price was the same. I told him to look at his fucking sheet because the customer price(retail) stayed the same but my price(freight increased $50) went up. Fuck you guys! Fifty bucks doesn't sound like much but when they keep doing it, it adds up.
I actually had a rep for a company(that their 450 happens to be winning all the shoot outs) tell me that they don't expect me to make money selling a bike or ATV. He brought this up after I complained about another freight increase after the fuel prices dropped big. They said my best employee should be in the F&I office and if I didn't have that then I will go out of business. I hate fucking extended warranties. I don't buy them on anything. But I've been told, by the manufacture, that I had better be selling extended warranties, marking up your rate on financing, and selling other "paper" products to make a living.
I just want to sell bikes and make a living selling a bike at MSRP and if you think the manufactures are going to listen to our bitching,
We had a local dealer advertising prices that were too good to be true. Once you showed up there they would hit you with the fees. They had terrible service and were caught multiple times turning in warranty claims without actually having done the work. That is a big no no in your dealer agreement. You think the manufacture shut them down? Hell no, they were selling too many bikes. How did they get shut down? They finally fucked over a local politician family member with their bait and switch tactics. The manufacture was probably trying to figure out how to get them going again.
And I will say, if I could sell everything in my store at MSRP I would be fine with that. Terrible money of some of the small stuff, in fact might lose a little after commissions but would do ok on big bikes. With today's society, nobody expects to pay retail for anything.
You are arguing with MX bike buyers. They have always been the black hole of no profit in this industry. If you really had dealership knowledge you would know that and quit trying to make some point that nobody cares about.
When less dealers care about MX, less people ride and race. When less people ride and race there will be less places to ride and race. Prices will go up, participation will go down and it will all be a fond memory someday.
I agree with most of your points, but I totally disagree with the add on fees.
$500 for set up is robbery. No way that should be there. Setting up the bike is part of the cost of doing business.
And some of the other fees I've seen some dealers charge are bullshit as well.
My brother still does it old school, and does quite well. Price, plus tax and a $30 doc fee. They don't give bikes or SxS's away and they're not always the cheapest, but they do have to compete. They concentrate on service, parts and accessories. All the parts and sales staff ride.
But they do lose some sales on price.
I've heard the same comments from my brother. His reps are always telling him to charge fees too.
And you're right about about the margins. They've been shrinking for years.
As the manufacturers try to keep the msrp as low as possible they raise the cost to the dealer and take away margin.
And you're right about the OEM's not giving a shit about dealers. They just want to move units.
But I will disagree on one thing. They sell a ton of SxS's, and even though extended warranties are not worth it in most cases, they are on these.
My brother even bought one for his Polaris Ranger 1000.
I've seen plenty of cases at his dealership where the customer was damn glad they'd bought one. Especially if you go offroad a lot.
SxS repairs can be very costly.
I think this could work for the racer...or image conscious weekend warrior.
When I bought my KX450....I spent another $2000 on parts, and $800 on suspension (to make it off road race ready)..,if I dealer could do all those mods for me and sell me the bike for the same price I could buy them myself for...I’d gladly buy the bike from them in that trim.
I pay cash for all my stuff-and I don’t recommend financing toys-but Another perk for a lot of people-and the dealer...you can’t finance $800 in suspension and $2k in parts...but I would imagine if the sticker price included those it would be possible to finance those, right? That means some cash strapped folks could get that decked out bike they want but would never have the cash to buy-and the dealer gets to sell $2800 in parts that they wouldn’t have otherwise sold because the buyer didn’t have the money for. So dealer gets to make some money on the parts-cost plus 10% or whatever-make money on the bike, money on the financing...and the buyer gets to roll it all into his loan and hopefully get all that for what he could have got it all for if He would have purchased them himself.
I like it! Not everyone would though....but I’d probably recommend letting the customer customize the bike-at least serious riders as they have their preferred parts...casual riders would probably be okay buying a bike you modded for them.
Another perk for the dealer...this muddies the water when buyers shop around...yes sir, that bike from the other dealer is $800 cheaper...but does it have an fmf pipe, pro taper bars and revalved suspension set up for your weight and riding? It doesn’t? Well that explains why it’s cheaper. you seem like a good enough rider to care about riding a bike set up to your how you like and would probably end up doing those same mods anyway, right? Okay, you’ll like this then, those same things wil cost you $850 from Motorsport and the time it will take to install them...so really, we are saving you $50, and You can finance all of them so you don’t have any money out of pocket: Should I get the paperwork started?
Dealer gets to sell the bike and make money on the parts.
And if they don’t care about that...we’ll then this bike down here will be more to your liking, it’s completely stock and we can get it to you for the same price as that other dealer.
I can't imagine why anyone would need to drive to a local lender when they can truly do everything from the comfort of your own home. They even send the notary to your house!
Pit Row
#2. Sales people that don't know the product and try to "Sell Me!". One year I purchased 5 new motorcycles. I went into Long Beach cycles every time first since they were near my office. I told them what I wanted and I wanted a price. Unless I sat down with them and played their sales game I could not get this from them so I ended up buying from a dealer that had no problem telling me his best price. The sales kid actually said to me "what... you want me to drop my pants and I'm not sure you're really going to buy".
#3. Dealers that have to order everything since they don't have it in stock. I can order it just as easily as the dealer so why bother him.
#4. Dealers that charge an assembly fee!!!
That said I always bought everything else at T.R.E.
Nice try tho. Smh.
Your larger question is answered like this... educated buyers are gonna think price first. Nothing will change that. Not even a track in the back yard.
But the educated buyer/racer is not the staple of your diet. So you dont cater to them. Cater to those who are looking for financing options that'll keep them in debt for the next decade. Or buyers that fall for marketing gimmicks. That's the average American consumer.
There's another area of competition that you didn't list that doesnt force a dealer to compete on price. It's an area that most dealerships struggle in big time.
The rest of us will have to deal with it until eventually we can order a bike direct and have it dropped off at our front door.
Two different outlooks on the same point were kind of glossed over in here. The example was Apple. The pro dealership guys say that Apple should regulate price, so as to create an environment where every dealer can make money. The guys not impressed with dealers, say if vendor x wants to sell it cheaper, so be it, and that's where I'm going.
I went to replace my iPod recently, and it didn't matter where I looked or went, the price was $149.99. This included Apple's website. It was more convenient for me to go down to target and pick up it same day.
It's the same product, same price no matter what, period. How or why should purchasing a vehicle be any different?
With the exception of financing said vehicle, then let the games begin. Or, arrange your own financing before you get there.
I believe the tide has already turned to more internet based vehicle purchases anyway. Although still done through a dealer, you can pretty much do a deal completely by phone/computer, and just show up to sign paperwork.
I'm still holding out for the day I can order direct from the manufacturer.
I think Titan and I have the same stance in that the MSRP that's set should account for a realistic margin for the dealers. Clearly it's not and the dealer's needs don't seem to be a priority for the manufacturers, and thats the sad part. Extra fees are necessary in some cases and Jabroni seems to be fine with that, I'm not but I do understand now why they are there.
So why is this problem not addressed better? New dirt bike sales are probably low on the manufacturer's priority list. Within the Powersports industry, the margins/profits probably lie more in SXS, boats, PWCs, fancy Adventure Bikes, Utility quads... and thats where the effort and importance probably lies for most of them on the corporate retail level.
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