Dealer profit?

**triple-bee** · 19th October 2009, 16:55

Did a deal on a B King this aft but whilst i was there the silly gentleman left his computer on so i saw the cost price of the bike to him, he did look suitably red in the face when i pointed this out

Any way it got me thinking what would you consider to be a reasonable mark up from a dealer for what amounts to getting a warrenty and a bit of back up over buying private ???

Wont name the dealer, he is a nice guy i i will probably deal with him again

**awayatc** · 19th October 2009, 17:00

so common....
how much is the mark up?.....
Kiss and tell....

**Grahameeboy** · 19th October 2009, 17:02

Originally Posted by triple-bee

Did a deal on a B King this aft but whilst i was there the silly gentleman left his computer on so i saw the cost price of the bike to him, he did look suitably red in the face when i pointed this out

Any way it got me thinking what would you consider to be a reasonable mark up from a dealer for what amounts to getting a warrenty and a bit of back up over buying private ???

Wont name the dealer, he is a nice guy i i will probably deal with him again

He is allowed to make a living...pay for the business...was it significant....I know someone who runs a Yamaha bike shop and he says that the mark up is not all that great..but then if you the price for a B King is $19,000 and he makes say $4,000 Gross Profit before tax overheads that does not sound too bad.

**FROSTY:Me** · 19th October 2009, 17:04

If a dealer isn't making $1500 Nett profit then he wont be in buisiness very long.
Keep in mind dude theeres a few "hidden" costs to add to that cost price.
1) rent,power,phone,insurances on the building are paid from profit on sales
2) wages
3) sales staff commissions.

**triple-bee** · 19th October 2009, 17:05

The bike is a used one at 16K, I will spill the beans on the mark up after people have had there say

**Mully** · 19th October 2009, 17:08

I'm sure this discussion has been had before..

This guy has to (presumably) hold the stock
Pay rent/power/phone/web hosting etc
Pay wages
In addition to providing warranty services (my understanding is that for warranty work, the distributor doesn't always pay for labour - only parts)

And so on.

It's like most businesses - they may appear to make a reasonable profit per unit sold, but the actual profit is minimal.

**Headbanger** · 19th October 2009, 17:09

I'd hope they would make 3k off a bike in that price range.4k would be better.

What was the difference?....6k?

**Grahameeboy** · 19th October 2009, 17:09

Originally Posted by triple-bee

The bike is a used one at 16K, I will spill the beans on the mark up after people have had there say

Remember he has to allow for haggling

**Ixion** · 19th October 2009, 17:17

Originally Posted by Mully

I'm sure this discussion has been had before..

This guy has to (presumably) hold the stock
Pay rent/power/phone/web hosting etc
Pay wages
In addition to providing warranty services (my understanding is that for warranty work, the distributor doesn't always pay for labour - only parts)

And so on.

It's like most businesses - they may appear to make a reasonable profit per unit sold, but the actual profit is minimal.

You left off licensing the bikes! And interest costs on holding the stock (that can really hurt).

Someone mentioned a retail of $16000. On that basis I'd expect a dealer buy price of no more than $11000-12000. Assuming the bike can just be sold on without needing any more work than a valet.

**paturoa** · 19th October 2009, 17:20

I traded my SV recently and the new for sale price in their show room means that the dealer's margin would be feck all even if sold at the sticker price!!!.

There would have been a lot of hours of workshop time just to clean it, they put new front disks & pads on it, and prolly a couple of other things I didn't notice.

It must be hard out there atm for dealers, and the ACC storm is probabaly another pressure that isn't helping.

**R1madness** · 19th October 2009, 17:22

Originally Posted by Ixion

You left off licensing the bikes! And interest costs on holding the stock (that can really hurt).

Someone mentioned a retail of $16000. On that basis I'd expect a dealer buy price of no more than $11000-12000. Assuming the bike can just be sold on without needing any more work than a valet.

Shit i wish lol. That would be a 1 in 100 deal wth that sort o money in it.

**awayatc** · 19th October 2009, 17:23

If you don't make enough "profit' you got to close up shop.....
simple

**Mully** · 19th October 2009, 17:24

Originally Posted by Ixion

You left off licensing the bikes! And interest costs on holding the stock (that can really hurt).

Well, the hope would be that he has the regos on hold where he can *cough*Dealerplates*cough*

And I included interest costs in holding the stock costs. (we can also get into opportunity cost of the finance too if you want.....)

Yeah, he'd probably have to valet the bikes. Have minor scrapes cleaned up, replace levers, new tyres, service et al.

Plus on used bikes, the CGA kicks in even if there's no manufacturer's warranty left so he'd have to honour that....