Bike shop profit margins?

[ital916]

Yep I get it all day every day. Generally I sell new bikes at window price but discount the gear they may want. Profit margins in new bikes are a heck of a lot lower than what most would realise.
Second hand bikes...depends....if they are trading...window price. Cash/finance...then we can talk creative finance.

Some people forget that lights must be turned on,wages paid ...same with a power load of bills!

Good service and "an experience" if free though

Agreed, I've just gotten used to th amount of haggling that happens since I started working in a bike store. , A smile and a how is your day is nice when walking in the front door.

[Forest]

sorry to corect ya there dude. We claim GST on the purchace price but we PAY Gst on the sale price. so there is 12.5% GST on any NETT profit.

GST has no net cost to a business.

While your business will likely end up with net GST inputs (which you then remit to the government) it doesn't actually cost your business anything. You collect the GST from your customers and pass it on to the government i.e. it isn't coming out of your pocket.

[sidecar bob]

GST has no net cost to a business.

While your business will likely end up with net GST inputs (which you then remit to the government) it doesn't actually cost your business anything. You collect the GST from your customers and pass it on to the government i.e. it isn't coming out of your pocket.

So where do i send my wage bill too? Clearly as a GST collector i am a govt employee so id like to be paid.

[FROSTY:Me]

GST has no net cost to a business.

While your business will likely end up with net GST inputs (which you then remit to the government) it doesn't actually cost your business anything. You collect the GST from your customers and pass it on to the government i.e. it isn't coming out of your pocket.

Wasn't making my point clearly was I
The general feeling I get from folks is 'Ohh the buggers make a mint"
They think for example if I buy a bike at $3000 and sell it for $4000 then theres a $1000 profit going into my pocket.
They forget that aunty helen takes her $125 of it
Not moaning about it--thats the reality of life
Mind you Im all for shutting down all retail of any sort on a sunday.

[Forest]

Wasn't making my point clearly was I
The general feeling I get from folks is 'Ohh the buggers make a mint"
They think for example if I buy a bike at $3000 and sell it for $4000 then theres a $1000 profit going into my pocket.
They forget that aunty helen takes her $125 of it
Not moaning about it--thats the reality of life
Mind you Im all for shutting down all retail of any sort on a sunday.

I'm talking about cost from a business accounting perspective. You can verify GST has no net cost by observing that it doesn't appear in your company's profit & loss accounts.

But I do understand what you're saying. Your customers probably don't realise that the government is collecting GST on the resale margin (and that the GST goes to Aunty Helen rather than to yourself).

[Forest]

So where do i send my wage bill too? Clearly as a GST collector i am a govt employee so id like to be paid.

I know. It really sucks doesn't it.

[ManDownUnder]

fark - let me turn the tide a little.

http://www.motocross.co.nz/ <== near me in Kumeu. STUNNING service - young guy does an honest job at fair rates. It's worth the trip across town

Recent experiences with a KBer now working at Cycle Treads... his reputation around the place is good too - so - Cycle treads get (yet another) thumbs up from me.

I'll be going back to both places without hesitation

[Ixion]

Wasn't making my point clearly was I
The general feeling I get from folks is 'Ohh the buggers make a mint"
They think for example if I buy a bike at $3000 and sell it for $4000 then theres a $1000 profit going into my pocket.
They forget that aunty helen takes her $125 of it
Not moaning about it--thats the reality of life
Mind you Im all for shutting down all retail of any sort on a sunday.

Oh dear. I do hope you have an accountant prepare your GST returns.

GST liability on such a trade is of course $111.11, not $125.

Purchase of secondhand goods for $3000, from a non-GST-registered source, input tax credit of $333.33

Sale of ditto , to ditto, for $4000 output tax liability $444.44

Difference thereof, $111.11.

Unless your purchases and sales are GST exclusive. Unlikely (though sometimes encountered , eg a business specialising in trucks)

[Shaun]

Yep I get it all day every day. Generally I sell new bikes at window price but discount the gear they may want. Profit margins in new bikes are a heck of a lot lower than what most would realise.
Second hand bikes...depends....if they are trading...window price. Cash/finance...then we can talk creative finance.

Some people forget that lights must be turned on,wages paid ...same with a power load of bills!

Good service and "an experience" if free though

Agreed mate, you guys at Bay Ride have a great attitude

[FROSTY:Me]

Oh dear. I do hope you have an accountant prepare your GST returns.

GST liability on such a trade is of course $111.11, not $125.

Purchase of secondhand goods for $3000, from a non-GST-registered source, input tax credit of $333.33

Sale of ditto , to ditto, for $4000 output tax liability $444.44

Difference thereof, $111.11.

Unless your purchases and sales are GST exclusive. Unlikely (though sometimes encountered , eg a business specialising in trucks)

NOW I know how I get all my split ends.--Its YOU out splitting hairs

[Ixion]

Trust me, where the IRD are concerned, no hair is too fine to split. Always to your disadvantage of course.

[boman]

When I bought my new SV1000. I didn't buy it off the cheapest shop. I bought it off the shop that gave me the best SERVICE. Scott at MR Motorcycles bent over backwards to accomodate me. And he was only $250.00 dearer in the end.

[Drogen Omen]

i used to think Wellington motorcycles was a crap shop cause they are so expensive gear wise and labour wise... after taking my motorbike to every other monkey bike shop in wellington region over a 12 month period to try and get it fixed... Welly motorcycles had it for 1 hour told me what the problem was exactly what i needed to fix it and how much it was gona cost. 1 week later when the parts arrived they had it for 1.5 days and it was fixed...

TSS in lower hut hasd it for 4 months charged me $700 for not fixing it...
Motomart Didnt want to know about it...
Motorad didnt want to know about it...

Good on ya welly motorcycles for sorting me out...bigest cost after the parts was GST... fucking governemt...

[nodrog:Me]

..... 1 week later when the farts arrived they had it for 1.5 days and it was fixed......

do they go in the gas tank?

[Drogen Omen]

hehe cant spell...

fixed it just for you...