Do all dealerships get their bikes for the same price?

RJMX834
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RJMX834
Edited Date/Time 10/28/2015 3:42pm
Hey guys, was kinda curious on this subject. You would figure I would know considering I've worked at a local dealership for almost 4 years. 75% of our business is off-road. Mx, sxs and atvs. We carry what I consider a fair amount of stock for an off-road selling dealership, parts and bikes. I'm blessed with being able to receive parts at a great price. However, buying a bike is a different story. I've bought 2 new dirt bikes since working their. Neither the brands we sell (sell Honda and KTM, Have bought 2 new kawasakis). I've made it clear several times that I was wanting to buy a bike from them but they were so far off from other dealers prices I couldn't muster swallowing $1700. I would never buy the same brand from elsewhere so I went back to what I started on, Kawasaki's. They understood and we've been fine ever since and have a good relationship. My question is do all dealerships get bikes for the same prices? For example, does dealership A. get a 2016 KTM 350 SXF for the same price that dealership B gets it for? I've heard people tell me both ways so I was just curious. Thanks guys!
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SwapperMX
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SwapperMX 10/27/2015 6:51pm
10/27/2015 6:51pm
There is a lot more to it than just a dealer's "buy price" on a bike. Floor plans, interest, terms, race plans, etc plus a range of various charges that a dealer will have calculated before having arrived at their "cost price" which a sales manager or salesman will have access to. Thus you end up with widely ranging prices. Working at a dealership and not being able to get a bike cheap means you are working for a tight ass !!
IWreckALot
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IWreckALot 10/27/2015 7:02pm
10/27/2015 7:02pm
SwapperMX wrote:
There is a lot more to it than just a dealer's "buy price" on a bike. Floor plans, interest, terms, race plans, etc plus a range...
There is a lot more to it than just a dealer's "buy price" on a bike. Floor plans, interest, terms, race plans, etc plus a range of various charges that a dealer will have calculated before having arrived at their "cost price" which a sales manager or salesman will have access to. Thus you end up with widely ranging prices. Working at a dealership and not being able to get a bike cheap means you are working for a tight ass !!
But do the dealerships get the bike for the same price from the manufacturer? It's understood each dealer has different overhead, but it all starts at the purchase price of the bike.
Roscoe33
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Roscoe33 10/27/2015 7:05pm
10/27/2015 7:05pm Edited Date/Time 10/27/2015 7:06pm
so 1 dealer sells 10 bikes and another sells 150 bikes should they get them for the same price ?

or should high volume dealer get a discount ?

opinion is based by the motivation behind it.

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Tim507
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Tim507 10/27/2015 7:08pm
10/27/2015 7:08pm
Some dealers are self funded and some dealers use the KTM flooring program (flooring is a Mfg inventory financing program). I would say that it is safe to say that the original cost may be the same .....however the build out price prior to overhead costs figured may very well vary.

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oshow
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oshow 10/27/2015 7:09pm
10/27/2015 7:09pm
SwapperMX wrote:
There is a lot more to it than just a dealer's "buy price" on a bike. Floor plans, interest, terms, race plans, etc plus a range...
There is a lot more to it than just a dealer's "buy price" on a bike. Floor plans, interest, terms, race plans, etc plus a range of various charges that a dealer will have calculated before having arrived at their "cost price" which a sales manager or salesman will have access to. Thus you end up with widely ranging prices. Working at a dealership and not being able to get a bike cheap means you are working for a tight ass !!
IWreckALot wrote:
But do the dealerships get the bike for the same price from the manufacturer? It's understood each dealer has different overhead, but it all starts at...
But do the dealerships get the bike for the same price from the manufacturer? It's understood each dealer has different overhead, but it all starts at the purchase price of the bike.
Depends on how many they buy and sell..
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oshow
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oshow 10/27/2015 7:10pm
10/27/2015 7:10pm
Roscoe33 wrote:
so 1 dealer sells 10 bikes and another sells 150 bikes should they get them for the same price ? or should high volume dealer get...
so 1 dealer sells 10 bikes and another sells 150 bikes should they get them for the same price ?

or should high volume dealer get a discount ?

opinion is based by the motivation behind it.

Nope and don't
SwapperMX
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SwapperMX 10/27/2015 7:13pm
10/27/2015 7:13pm
IWreckALot wrote:
But do the dealerships get the bike for the same price from the manufacturer? It's understood each dealer has different overhead, but it all starts at...
But do the dealerships get the bike for the same price from the manufacturer? It's understood each dealer has different overhead, but it all starts at the purchase price of the bike.
From the involvement that I had with Japanese manufacturer's, yes individual buy price is the same. Rebates etc on the account is what will differ between dealers, thus affecting what can be considered the dealers actual "buy price". Again, there is so much involved that it can't be looked at as simply the "purchase price of the bike"
RJMX834
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RJMX834 10/27/2015 7:25pm
10/27/2015 7:25pm
Thanks guys! I am aware that our overhead varies between the models and we do use various floor plans. That may very well explain why my price on bikes have varied between that of another price I've gotten at other dealerships. I was just curious. Thanks for the advice!
Sir Roostsalot 10/27/2015 7:44pm
10/27/2015 7:44pm
Some manufacturers offer a "cash discount" to dealers if they chose not to utilize the manufacturers floor plan. It is usually only a few % points. Cash rich dealers will often take advantage of this. Otherwise, dealer cost is the same for all dealers. Unfortunately, I have seen dealer employees get bent over worse than anyone else.
Paw Paw 271
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Paw Paw 271 10/27/2015 8:24pm
10/27/2015 8:24pm
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in effect reduces the actual price the dealer pays for the bikes based on the quantity they sell.

Auto dealers have the same arrangement.

Paw Paw
SwapperMX
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SwapperMX 10/27/2015 8:46pm
10/27/2015 8:46pm
Paw Paw 271 wrote:
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in...
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in effect reduces the actual price the dealer pays for the bikes based on the quantity they sell.

Auto dealers have the same arrangement.

Paw Paw
Yeah, it's a called a rebate. And already mentioned !!
olds cool
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olds cool 10/27/2015 8:53pm
10/27/2015 8:53pm
Paw Paw 271 wrote:
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in...
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in effect reduces the actual price the dealer pays for the bikes based on the quantity they sell.

Auto dealers have the same arrangement.

Paw Paw
SwapperMX wrote:
Yeah, it's a called a rebate. And already mentioned !!
Are you sure you don't mean dealer holdback instead of rebate?
SwapperMX
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SwapperMX 10/27/2015 8:59pm
10/27/2015 8:59pm
olds cool wrote:
Are you sure you don't mean dealer holdback instead of rebate?
Yeah that's prob what it is called in the US.
chocolatethunder782 10/27/2015 9:00pm
10/27/2015 9:00pm
Paw Paw 271 wrote:
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in...
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in effect reduces the actual price the dealer pays for the bikes based on the quantity they sell.

Auto dealers have the same arrangement.

Paw Paw
That's kind of how I understood it. When I tried to haggle a dealer down a little bit they said they don't make much on the actual bikes but get bonuses when they meet quotas.
mxnick
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mxnick 10/27/2015 10:35pm
10/27/2015 10:35pm
RJMX834 wrote:
Hey guys, was kinda curious on this subject. You would figure I would know considering I've worked at a local dealership for almost 4 years. 75%...
Hey guys, was kinda curious on this subject. You would figure I would know considering I've worked at a local dealership for almost 4 years. 75% of our business is off-road. Mx, sxs and atvs. We carry what I consider a fair amount of stock for an off-road selling dealership, parts and bikes. I'm blessed with being able to receive parts at a great price. However, buying a bike is a different story. I've bought 2 new dirt bikes since working their. Neither the brands we sell (sell Honda and KTM, Have bought 2 new kawasakis). I've made it clear several times that I was wanting to buy a bike from them but they were so far off from other dealers prices I couldn't muster swallowing $1700. I would never buy the same brand from elsewhere so I went back to what I started on, Kawasaki's. They understood and we've been fine ever since and have a good relationship. My question is do all dealerships get bikes for the same prices? For example, does dealership A. get a 2016 KTM 350 SXF for the same price that dealership B gets it for? I've heard people tell me both ways so I was just curious. Thanks guys!
Lots of sort of correct / wrong information in this thread.

I spent 10 years working for a well known European motorcycle OEM and know the laws of pricing very well.

Bottom line: Fair and equal pricing for EVERY dealer, and across all 50 states - is mandated by both federal and state vehicular laws (motorcycle dealers fall under auto motor vehicle law, however the laws were written for auto dealers).

These laws came about via a lawsuit filed by New Hampshire Honda (auto) dealer Dick Nault back in the early 1990's. Nault changed the industry by exposing corruption via how Honda sales reps allocated "hot" models of cars that dealers knew they could sell at full margin. Nault also owns a Honda Motorcycle franchise but is most known for this lawsuit. It was a big deal that spurred all sorts of laws.

At the state level, laws vary significantly, but the invoice price for every bike must be equal. Thus, the initial price that every dealer pays in all 50 states is the same.

However, the OEMs can and most certainly do offer better back end terms for dealers that meet certain criteria, including:
Agreeing to stocking (wholesale purchasing) levels
Agreeing to purchase / stock certain OEM parts and clothing
Dedicating a certain amount of "exclusive" showroom space to the OEM (square footage or even dedicated showrooms)

The primary "grease" that OEM's offer is:
Extended flooring terms (credit) for both bikes and parts/clothing/apparel
Back end discount when bike is retail registered (normally certain % points that then gets applied to dealers parts account)

But the bottom line is, every dealer is paying the same "invoice" price.

The back end is where extra margin can come from, and based on how much the dealer "steps up" towards stocking stuff.

If any OEM is giving front side discounts, and aside from scratch and dent bikes (like ex press or company demo bikes) they can land in MAJOR state and federal doo-doo.

Also, please keep in mind:

If a dealer makes 15% on a new bike he is doing very well. 15% on a $8000 aint much.

Margins at the dealer level for both parts and bikes are terrible.

Its not what you think. Thats why you are also paying a freight fee, a set up fee, a doc fee and whatever else the dealer can make a few bucks on. But the OP works in the parts department, so he already knows this.

But yes, invoice price is the same across the board.

Also, almost all OEM's that I know of do have a legit freight charge to the dealer, normally between $200-300 bucks.






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zehn
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zehn 10/27/2015 10:51pm
10/27/2015 10:51pm Edited Date/Time 10/27/2015 11:01pm
mxnick wrote:
Lots of sort of correct / wrong information in this thread. I spent 10 years working for a well known European motorcycle OEM and know the...
Lots of sort of correct / wrong information in this thread.

I spent 10 years working for a well known European motorcycle OEM and know the laws of pricing very well.

Bottom line: Fair and equal pricing for EVERY dealer, and across all 50 states - is mandated by both federal and state vehicular laws (motorcycle dealers fall under auto motor vehicle law, however the laws were written for auto dealers).

These laws came about via a lawsuit filed by New Hampshire Honda (auto) dealer Dick Nault back in the early 1990's. Nault changed the industry by exposing corruption via how Honda sales reps allocated "hot" models of cars that dealers knew they could sell at full margin. Nault also owns a Honda Motorcycle franchise but is most known for this lawsuit. It was a big deal that spurred all sorts of laws.

At the state level, laws vary significantly, but the invoice price for every bike must be equal. Thus, the initial price that every dealer pays in all 50 states is the same.

However, the OEMs can and most certainly do offer better back end terms for dealers that meet certain criteria, including:
Agreeing to stocking (wholesale purchasing) levels
Agreeing to purchase / stock certain OEM parts and clothing
Dedicating a certain amount of "exclusive" showroom space to the OEM (square footage or even dedicated showrooms)

The primary "grease" that OEM's offer is:
Extended flooring terms (credit) for both bikes and parts/clothing/apparel
Back end discount when bike is retail registered (normally certain % points that then gets applied to dealers parts account)

But the bottom line is, every dealer is paying the same "invoice" price.

The back end is where extra margin can come from, and based on how much the dealer "steps up" towards stocking stuff.

If any OEM is giving front side discounts, and aside from scratch and dent bikes (like ex press or company demo bikes) they can land in MAJOR state and federal doo-doo.

Also, please keep in mind:

If a dealer makes 15% on a new bike he is doing very well. 15% on a $8000 aint much.

Margins at the dealer level for both parts and bikes are terrible.

Its not what you think. Thats why you are also paying a freight fee, a set up fee, a doc fee and whatever else the dealer can make a few bucks on. But the OP works in the parts department, so he already knows this.

But yes, invoice price is the same across the board.

Also, almost all OEM's that I know of do have a legit freight charge to the dealer, normally between $200-300 bucks.






Thanks for the info. I figured it had to be federally regulated in some way, or it would just invite price discrimination.
mxnick
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mxnick 10/27/2015 10:58pm
10/27/2015 10:58pm Edited Date/Time 10/27/2015 11:00pm
It is mostly state regulation, but no oem can sell a dealer a bike in say, New Mexico for less than the same price in Vermont. Perhaps some sleazier OEM's, like some of the chinese scooter companies might do it and not get caught, but for sure non of the major moto OEM's do it. The stakes are too high, and the penalty costs are very high.

This is the lawsuit that broke the camels back:
http://www.autonews.com/article/19940530/ANA/405300703/suit-names-honda…
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Julian 10/28/2015 1:38am
10/28/2015 1:38am
i worked in an auto dealership for some years, my feeling is that money talks.

big sales means better prices for dealers

but the better deals for the big guys has to be hidden from the little guys so they wont get pissed off.

that's why the manufacturers come up with all sorts of ways to hide what the big guys are really paying.

and yes, the nice guys who are referred by someone or who have some connection with a dealership end up paying the most for what they buy.

the guy that no body referred and who knows nobody and just comes in and negotiates the hell out of the dealership gets the best deal and the nice guys get to pay the most.
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mjr119
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mjr119 10/28/2015 5:56am
10/28/2015 5:56am Edited Date/Time 10/28/2015 5:56am
I work in a different industry, but we do wholesale. We offer Tier A. Tier B, and Tier C pricing for different dealers. Same products, 3 different prices. The tier pricing depends on the relationship with the dealer, how much volume we do with them, etc. We offer better pricing if the dealer does advertising, as well. It's more complicated than you would initailly think, but that's the way we do it.
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dl117 10/28/2015 7:16am
10/28/2015 7:16am
mjr119 wrote:
I work in a different industry, but we do wholesale. We offer Tier A. Tier B, and Tier C pricing for different dealers. Same products, 3...
I work in a different industry, but we do wholesale. We offer Tier A. Tier B, and Tier C pricing for different dealers. Same products, 3 different prices. The tier pricing depends on the relationship with the dealer, how much volume we do with them, etc. We offer better pricing if the dealer does advertising, as well. It's more complicated than you would initailly think, but that's the way we do it.
I also work in the wholesale industry and it is the same here, way differant product than power sports though.
resetjet
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resetjet 10/28/2015 7:38am
10/28/2015 7:38am
Do motorcycle manufacturers give holdback???

Holdback is when a car manufacturer gives a dealer a certain amount of money to cover the financing on a vehicle for a predetermined period of time.

So as a dealer if you sell the car the first day you have it, the holdback is pure profit. If you go beyond the holdback time, you are now paying for the financing yourself. This is why dealers will often "blow out" a car that has been sitting before they have to pick up the tab.

Not sure of MC OEM's do this.
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mimafia 10/28/2015 10:03am
10/28/2015 10:03am
I work at an auto dealership and I guarantee all dealerships pay exactly the same for cars. Big volume dealerships simply get big bonuses at the end of the quarter/year. They do not get their cars at a cheaper price. Rebates are the same for all dealerships as well. A big volume dealership may sell a car at a lower price and actually lose money on the car knowing they will make it up in bonuses later. I would be shocked if it were any different with motorcycle dealerships.
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TailSoHard 10/28/2015 10:34am
10/28/2015 10:34am
Paw Paw 271 wrote:
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in...
There is also a thing where the dealers get money back or credit for future purchases based on the volumn they have each year. This in effect reduces the actual price the dealer pays for the bikes based on the quantity they sell.

Auto dealers have the same arrangement.

Paw Paw
SwapperMX wrote:
Yeah, it's a called a rebate. And already mentioned !!
olds cool wrote:
Are you sure you don't mean dealer holdback instead of rebate?
You're both right. Dealers get holdback on each vehicle, and if there are any rebates on it, they get those also. Like somebody else mentioned, it all gets credited to a dealer's parts account.

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Falcon 10/28/2015 10:53am
10/28/2015 10:53am
resetjet wrote:
Do motorcycle manufacturers give holdback??? Holdback is when a car manufacturer gives a dealer a certain amount of money to cover the financing on a vehicle...
Do motorcycle manufacturers give holdback???

Holdback is when a car manufacturer gives a dealer a certain amount of money to cover the financing on a vehicle for a predetermined period of time.

So as a dealer if you sell the car the first day you have it, the holdback is pure profit. If you go beyond the holdback time, you are now paying for the financing yourself. This is why dealers will often "blow out" a car that has been sitting before they have to pick up the tab.

Not sure of MC OEM's do this.
Yes, there is holdback on motorcycle units.


OP, you should ask the dealer principal to order one more unit of the bike you want than he was planning to, as long as he promises to sell it to you for cost (or $100 over, or something.) That worked with my boss when I worked for a dealership. It's a win-win-win for him - one additional unit, he keeps the holdback, and it's essentially zero-risk.
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philG 10/28/2015 3:42pm
10/28/2015 3:42pm
Its a lot the same here , dealers buy bikes at the same prices , as they are legally are obliged to, the volume kickbacks are where the money is made , you buy 10 bikes , you get a bit , you buy 100, you get loads..

Then you get extra bonus for being a solus dealer, and maybe extra financing time , say 90 days , instead of 30 or 60.

What became apparent to me , is that some manufacturers dont care about selling bikes to the public, just the dealers, because the incentives they give the dealer to take stock , is more money that it would cost them to offer decent promotions to the public, but a lot less work.

Honda always had you over by making you take stock of stuff you cant sell , just to get stuff you can, and where being a Honda roadbike dealer was always a good thing , their insistance on dealers a few years ago to go to Solus or lose the franchise , saw big dealers just give up the franchise , rather than spend the dollar on a full dealer makeover , and to have all their eggs in one basket , which was looking like a less attractive basket all the time.

They even went down the route of having 'Honda Centres' that sold lawnmowers and all sorts , which the UK bike dealers just arent interested in ,,, was a major dumb move and Honda's market share has been in free fall ever since.

Then the huge dealers came into it , banking on getting the volume bonus , we had Motorcycle City , Carnells , George White and they all tried to make money on volume bonus and finance kickbacks, but just couldnt keep their heads above water as one after the other made the same mistakes .

You can sell bikes for no money , and make $$ in other ways, but it wont last , because the market will only stand it for so long, and the price to swap is what makes the deal, not the screen price .
PLMX
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PLMX 2/22/2021 7:03am
2/22/2021 7:03am
I don't know where you are located but I just bought a used 2019 KX450 from Mudline Motorsports up in PA. I got a killer price on it at 5K which was at least $1,500 less than any of the other dealerships.

https://mudlinemotorsports.com/

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