Real cost of a new YZ 250 for a dealership

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1/28/2021 11:46 AM

I just bought ( well not picked up but paid for) a new 2021 YZ 250 for 8100 OTD.

Initially when I called the dealership I was told that the best they could do is 8800$ otd due to set up, freight, TTL and cost. I told them to pound sand. They called back 20min later saying the best they could do was 8500$ otd, what was my sticking point? I told them Im at 7900$ otd I want everyone to feel good after this. I figured 400$ over MSRP was decent, due to them getting them at below MSRP. They said they absolutely couldn't do that but would I mind 8K? I said at 8K I would buy it today. I was told he would have to call his boss but we will shoot for 8k today. He calls back and says they cant do 8k but will do 8250. I told them at this time I would call other dealers to see what kind of deals they could offer me ( the narrator preferably Morgan Freeman " they too couldn't offer Brent a deal, 8300 OTD was the best they could do).Well at this time Saturday was over and they were closed till Tuesday.
Tuesday comes around same guys calling me asking if I still was interested. At this time the owner, or upper management guy is on the speaker phone with the kid who has been calling me. They say 8100$ and that is their bottom line because that is selling it to me at cost. I agree due to the scarcity in the market and because anyone local couldn't beat it . Plus they would throw in a free Fox Jersey.

I suppose long story short, is their anyway this is actually cost to them?

I get you gotta pay the guy to assemble the bike(Wheel,bars,etc).
I get you gotta ship it to the shop.
Pay their rent
I get they need to make their money.
However it just got me curious as to what real cost looks like to a dealership?

Sorry for the long write up but I figure this might help someone else who is looking and can see what Step by Step occurred to me. Also I already bought it so Its a done deal .

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1/28/2021 11:49 AM

YZ or YZ-F?

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1/28/2021 11:50 AM

Brent_Apodaca wrote:

I just bought ( well not picked up but paid for) a new 2021 YZ 250 for 8100 OTD.

Initially when I called the dealership I ...more

Do you go to the grocery and ask them what their actual cost for their food is also?

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1/28/2021 11:51 AM
Edited Date/Time: 1/28/2021 12:00 PM

Brent_Apodaca wrote:

I just bought ( well not picked up but paid for) a new 2021 YZ 250 for 8100 OTD.

Initially when I called the dealership I ...more

APLMAN99 wrote:

Do you go to the grocery and ask them what their actual cost for their food is also?

Does the guy at the grocery store make a show of saying, "we're selling it at cost?"

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1/28/2021 11:53 AM

I was a Honda dealer for 10 years. Margin was about 8%, before freight, set up.

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1/28/2021 11:58 AM

Brent_Apodaca wrote:

I just bought ( well not picked up but paid for) a new 2021 YZ 250 for 8100 OTD.

Initially when I called the dealership I ...more

Why do you care what the cost is? You sound like you got a really good deal. No doubt you made out better than the dealer.

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1/28/2021 11:59 AM
Edited Date/Time: 1/28/2021 12:01 PM

Why are you questioning it now? Go ride the thing and enjoy it.
It is what it is now. if you are sitting in the garage worrying about what you paid you need to get rid of it.

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1/28/2021 12:00 PM
Edited Date/Time: 1/28/2021 12:00 PM

Robbirob25 wrote:

I was a Honda dealer for 10 years. Margin was about 8%, before freight, set up.

Where did you make money at then? Parts and clothing?

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1/28/2021 12:04 PM

Brent_Apodaca wrote:

I just bought ( well not picked up but paid for) a new 2021 YZ 250 for 8100 OTD.

Initially when I called the dealership I ...more

Tuna wrote:

Why do you care what the cost is? You sound like you got a really good deal. No doubt you made out better than the dealer.

Genuine curiosity question really. What really does it take to be a dealer? Why would they sell it to me at cost? What really goes on behind the scenes? What does actual cost look like as a dealer? I don't care about what I paid but the line he said that he was selling it to me at cost made me wonder what it actually looks like to be a dealer. Was I missing some sort of link in my train of thinking? What does MSRP look like as a dealer? I figured since some of our users either work for a dealership or potentilly own one I could get a better idea of how this whole thing works on their end.

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1/28/2021 12:06 PM

Zesiger 112 wrote:

Why are you questioning it now? Go ride the thing and enjoy it.
It is what it is now. if you are sitting in the garage ...more

Its more of me trying to see what they are seeing on their end. In the end I paid what I paid, that doesn't matter to me. I figure we have some people on here who work at dealerships and they can give some insight as to what its like on their end.

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1/28/2021 12:08 PM

Robbirob25 wrote:

I was a Honda dealer for 10 years. Margin was about 8%, before freight, set up.

life_of_jaze wrote:

Where did you make money at then? Parts and clothing?

This is exactly why I asked this question. I greatly appreciate the transparency behind the scenes.

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1/28/2021 12:09 PM

Dirty Points wrote:

YZ or YZ-F?

YZ 250 2 stroke.

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1/28/2021 12:09 PM
Edited Date/Time: 1/28/2021 12:15 PM

Brent_Apodaca wrote:

I just bought ( well not picked up but paid for) a new 2021 YZ 250 for 8100 OTD.

Initially when I called the dealership I ...more

APLMAN99 wrote:

Do you go to the grocery and ask them what their actual cost for their food is also?

Dirty Points wrote:

Does the guy at the grocery store make a show of saying, "we're selling it at cost?"

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.

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1/28/2021 12:19 PM

Robbirob25 wrote:

I was a Honda dealer for 10 years. Margin was about 8%, before freight, set up.

life_of_jaze wrote:

Where did you make money at then? Parts and clothing?

On Side by sides, snowmobiles, atv's and street bikes....You are eating soup with a fork selling dirt bikes at MSRP with no dealer fee's.

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1/28/2021 12:30 PM

Robbirob25 wrote:

I was a Honda dealer for 10 years. Margin was about 8%, before freight, set up.

life_of_jaze wrote:

Where did you make money at then? Parts and clothing?

If he was anything like us, financing .

More money to be made in the money, than the metal.

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1/28/2021 12:30 PM

If a dealer is selling at cost they will not stick around long. Shop for the best deal you are happy with and enjoy the new bike.

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1/28/2021 12:37 PM

Robbirob25 wrote:

I was a Honda dealer for 10 years. Margin was about 8%, before freight, set up.

life_of_jaze wrote:

Where did you make money at then? Parts and clothing?

Yes, those areas and service. Used bikes are where the margins make you money... New units got you new customers, and that was about all they did. There is "holdback' on the back side of the sale, but payments were quarterly.

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1/28/2021 12:40 PM

Robbirob25 wrote:

I was a Honda dealer for 10 years. Margin was about 8%, before freight, set up.

life_of_jaze wrote:

Where did you make money at then? Parts and clothing?

philG wrote:

If he was anything like us, financing .

More money to be made in the money, than the metal.

Yup. Financing as well. Even that became more difficult with all of the options on line and competition between institutions. We sold in 2013, and I have been a much happier person ever since. You invest hundreds of thousands into a business, only to have the public want to buy bikes at the same price as you, but with zero financial risk on their behalf. So I sold and got out!

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1/28/2021 12:59 PM

OP fighting to get 8K on a new bike lol

Here in WA trying to get a bike well sought after (21 yz250f), after the sales tax and fees. It was $10.3K lmfao. I knew they werent going to budge on fees because the bike was going to sell. Tbh I could care less what it costs because its what I want. After running the main sorter at my warehouse makes my purchase worth it.

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Gone:
2006 CRF230F
2008 KTM 200 XC
2017 KTM 250 SX
2019 CRF250R
Current: 2021 YZ250F

1/28/2021 1:05 PM

You got it for cost - dealer rebates.

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1/28/2021 1:18 PM

Neat story

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1/28/2021 1:32 PM

APLMAN99 wrote:

Do you go to the grocery and ask them what their actual cost for their food is also?

Dirty Points wrote:

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 ...more

I don't get the impression OP is having remorse or trying to justify his purchase, more of a curiosity. I get it.

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1/28/2021 1:47 PM

Robbirob25 wrote:

Yup. Financing as well. Even that became more difficult with all of the options on line and competition between institutions. ...more

We always used to kick back.. so a guy is a car dealer, you go and try to buy a car from him at cost... or get a builder to quote you , and then try and chip him 20% on the price... and they look at you like a fool.

The thing about the trade that pissed me off, is that the guy who was trying to buy a bike, who was a regular working joe, will roll in to your local dealer and pay decent money, some out of towner will try and ring round , and slag you off for not doing ' a deal'..

We had a guy who would go anyhwere to save £25, and we let him. Bike needed warranty work , and we were flat out, offered him a slot a week ahead, he went nuts, and got on to Honda , We said we werent the supplying dealer and werent prepared to offer good will on a bike we never sold.. they agreed. LOL

Anyway , not long after , his neighbour comes in for a bike, and we have a zero miles ex show bike from the importer that owes us £1500 behind cost, my boss sells it for a £500 turn to piss the other guy off. says it was the best £1000 he ever gave away.

The bike trade would be great if it wasnt for the customers.. everyone wants something for nothing. , and after a while it gets old, just pay the price , or go elsewhere.

The best dealers here were doing well to make 3% profit on turnover, and when you have £500k on stock, you have to ask what is the fucking point when the guy who comes to service your parts washer charges more money that you are expected to make on a £7500 bike.

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1/28/2021 1:48 PM
Edited Date/Time: 1/28/2021 2:28 PM

They probably don't get the best salesmen because there is not enough money in motorcycles to make a decent living. So....they rely on weak tactics like "it's my cost" and generally leave us feeling shitty. Selling motorcycles at the dealer level is extremely entry level as far as being a salesman is concerned.

Guys.....we don't let the dealers make enough money to pay for better help. We all know the costs and want everything cheap because we feel like we are motocross insiders and that's just the way it is.

i would personally love to sell dirt bikes for a living but the profit margins are soo low that there just isn't enough scratch to be made. No disrespect to any current motorcycle salesman.....some are great. Good ones are hard to come by and when i find one i'm always ok paying a little more.

i couldn't imagine owning a dealership

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1/28/2021 2:00 PM

Wonder how shops are supposed to survive with customers like this.
unsure

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1/28/2021 2:02 PM

Yamaha YZ models don't have much markup. For reference Brent I'm also in NM and bought the wife a YZ125X this year, and paid 7600 OTD. Didn't negotiate much, because of the limited markup and limited availability. Actually at that price had a discount on the invoice. 7600 was MSRP +Yamahas quoted freight on yamaha-motor.com + 50 setup +TTL. If I would've had the cash to buy it outright I could've gone out of state and not paid the TTL of about 550.

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1/28/2021 2:06 PM

When I was a kid a family member owned a Yamaha dealership, when he placed his order he would include whatever bikes we needed and my parents would cut him a check for the actual invoice price he paid and they'd go straight from the delivery truck to our truck in the crate.

I wanna say back then it was $500-700 margin on a bike, this was about 20 years ago.

Bottom line, the actual margin on bikes ain't shit.

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1/28/2021 2:22 PM

Yak's chart above illustrates a problem for the dealers. I bet there are several people on here who "know what the dealers pay for those things," and think that number is something like $900. They feel like dealers are making money hand over fist.
Truly, take the cost of that 250SX at $6722. Now add the cost of freight to the dealer. It's as near to $450 as truly matters. PDI is definitely not $400 on a 250SX; more like one half-hour or full hour in the shop at the rate they charge the sales department (yes, the service department charges the sales department.) Let's call it $100 to be very generous. Now we're up to $7,272.
But wait! Even if you sell it at zero dollars profit, the state wants their cut in sales tax. In CA, that would be $599.94 in my county - maybe more in Los Angeles. Oh yeah, it's $52 to register the thing (and you cannot take it home if it doesn't get registered.) Now we're up to $7923.94. This is before the dealer has earned one red cent on the sale.

There are variables in your scenario: the actual cost of freight from Yamaha to the dealer, the difference in cost between a Yamaha and a KTM, the price of service in the shop, and the local taxes, to name a few. It sounds like your dealer made you a great deal at $8100, though. They probably made very little money on that bike.

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Braaapin' aint easy.

1/28/2021 2:39 PM

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.

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1/28/2021 2:44 PM

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.

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