| Author | Message | ||
     Bbbob |
Oops, guess she forgot there are actual H-D employees here! And some former employees, I now work for....dare I say....BMW motorcycles...please buellgrrrl, sell your Beemer... | ||
| Ft_bstrd |
please buellgrrrl, sell your Beemer...  | ||
| Bill0351 |
This was posted on another site and I have no idea how accurate it is. If it's in the ballpark, I think it puts the return on the dealer's investment closer to 25%(without any factory-to-dealer incentives). It sounds like a lot, but when you think how expensive it is just to keep the doors open on a large dealership, it isn't totally unreasonable. 2006 FLSTCI Heritage Softail Classic List Price: $17620 Vivid Black List Price: $17905 Color List Price: $18205 2-Tone Dealer Invoice: $14096 Vivid Black Dealer Invoice: $14324 Color Dealer Invoice: $14564 2-Tone Freight Cost: $275 Estimated Assembly Cost: $110-125 Ready to Sell Cost (No Profit): $14481 Vivid Black Ready to Sell Cost (No Profit): $14709 Color Ready to Sell Cost (No Profit): $14949 2-Tone Options: cost/retail H-D Factory Security System - $220/$275 Wheel Option - $220/$275 | ||
| Court |
>>>it isn't totally unreasonable. May not be for Harley-Davidson. I don't know, I've never seen their stuff. It's wildly out of line for Buell margins. | ||
| Cyclonedon |
if your talking motorcycle sales, 30 to 40% is way too high! But if your talking about accessories and so forth, 30 to 33% would be about right and that's not much profit for a dealership to have to stock products and try to make a decent living. | ||
| 86129squids |
"Ready to Sell Cost (No Profit)" LOl Nothing seems ready to sell unless there's a profit involved. Buehler, Keynes, in attendance?? | ||
| Greenlantern |
Ready to Sell Cost (No Profit): The original poster neglected to factor in a dealerships overhead. Things like rent,utilities, payroll taxes,employee fringes, employee/building infrastructure maintenance and whatever else that I am missing here. It adds up quick and usually adds up much! | ||
| Rainman |
I have nothing against someone making a profit. I will pay a fair price in return for being treated fairly. A few hundred here or there, maybe even 1,000, in exchange for a pickup truck coming to get me on the roadside seems like a fair tradeoff. I just don't want to get mugged on the sales floor. NOTE: No Blasts were harmed in this post. | ||
| Liquorwhere |
The original poster neglected to factor in a dealerships overhead. Things like rent,utilities, payroll taxes,employee fringes, employee/building infrastructure maintenance and whatever else that I am missing here. It adds up quick and usually adds up much! Don't forget floorplan interest, set up cost of the mechanic, marketing, events, radio, TV etc etc even if you get a bump on a financed bike and something off the warranty menu or two there are significant costs that still keep a dealership, just like almost any other business, in like to a 8-12% profit margin in GOOD TIMES....and Buellgrrl asking for documentation from employees to post on the internet would most definitely get them FIRED...anyway, I worked in sales and F&I for a dealership and while add on's, accessories, motorclothes and the like can make an owner a nice living, it is not some cash pig that allows them to give away bikes for years and stay in business off the money they made in the 90's. You have tangible taxes on remaining inventory, sunk costs for the build out, legal and administrative costs, not to mention how much capital is tied up in USED bikes on the floor that were traded in, parts inventory so they can have your belt in stock when you snap one....she has no idea the costs of doing business...... | ||
| Chellem |
The numbers above allege to speak only of gross profit - that's a number before all the expenses and overhead. I'm not verifying those numbers, even though they are 3 years old, but if they are, the markeup is 20% based on above numbers. markup=(R-C)/R 17620-14096=3524 3524/17620=20% If you use the "ready to sell" cost, whatever that means, then it's even less. I'll be completely honest, I don't know what those words mean. As I said, I'm not confirming those numbers, I'm just doing math. If that webpage is correct, it demonstrates approximately HALF of Buellgrrrrllllllllls assertion. Actually, it puts it right where she thinks it should be: Mark all the 2009s down by 20% and even bigger discounts for earlier models and the bikes will fly out of the doors while turning a profit for HOG and the dealers. Interesting web site. SO assuming they sold the bike for MSRP, based on these numbers, the deal would net out gross of $3524. The salesman probably gets a good chunk of that as commission (or salary - either way). God forbid a portion of that was paid by Credit Card, that's another up to 3-4% grabbed right off the top. And they haven't even turned on the lights yet. Still waiting for the proof for Buellgrrrrllllllllllls allegations of markup. ->ChelleM | ||
| Chellem |
Damn. Forgot to factor in today's crazy cost of brats. | ||
| Fast1075 |
Awwwww come on fellers....we all know that it only costs The Mothership 50 bux to build a GeezerGlide...Obama pays all the costs to run the dealerships...and Johnsonville donates brats...I'm gonna open up several dealerships and retire to that desert island...  | ||
| Pammy |
I know what it costs to turn the key, here and we are very small. People don't realize the costs of everyday operations. Insurance is HUGE!!! Don't even get me started... | ||
| Chellem |
And while we're bitching about overhead, I just want to point out - not to belittle any particular geographical location - but the markup is the same on these bikes whether you work in the New York Metro area or the middle of nowhere. Overhead is higher where property values are higher, so those of us in, say, North Jersey, have significantly higher costs of property, property tax, and payroll than those who have dealerships in the middle of nowhere where property is sold by the acre rather than the square foot. Just throwin' that out there. ->ChelleM | ||
| Pammy |
Preachin' to the choir here sister. Some people have no clue. | ||
| Froggy |
There better be brats at the Liberty Birthday Bash this year! I am gonna have to truck down all 3 of my bikes so Erik can sign till his hand falls off  | ||
| Slaughter |
I'm a moocher and a freeloader. I'll go to Antelope Valley HD/Buell on Saturday and scarf down a couple free dogs. I have NO SHAME. I look at it as a fringe benefit of them being my race sponsor. | ||
| 46champ |
Steve are you telling us you get paid to race bikes with their name on them then you go eat their free food have you no shame. | ||
| Bill0351 |
"It's wildly out of line for Buell margins." I will take that insight with a grain of salt. With dealers blowing out overstock 1125Rs in the $8,000 to $8,500 range on a bike the listed for around $12,000, I'm thinking the margin of 25% would be somewhere in the ballpark for Buell as well. Right now Lancaster HD in PA has $2,500 to $3,000 under MSRP on Big Twins and 1125Rs for $8,499. So, some dealers are more than willing to deal on overstock machines. I think they have the right idea too. Get those machines out on the road and try to make some money back on service and accessories. I have no idea about the availability of brats and hot dogs though. http://www.lancasterhd.com/sales.htm On the other side of the coin, my local dealer could be the poster-child for what was wrong with some dealers a few years ago. Last time I was in there they still had a few overstock '06 bikes for more than MSRP. | ||
| Ft_bstrd |
Bill They are selling at a loss at those prices. | ||
| Fast1075 |
"still had a few overstock '06 bikes for more than MSRP" I see the same thing here... | ||
| Bill0351 |
Hey there FB. They may be selling at a loss, but there seems to be a uniform bottom that they are hitting to move those bikes and I assume it revolves somewhere around actual dealer cost. If that was the actual cost though, their profit margin would be closer to the 50% BG cited, and nobody seems to think that holds any water. I guess the main point is that some dealers are willing to do what it takes to keep bikes moving off the floor and others are still operating as if people were still beating down their doors to get bikes loaded down with accessories and listing at 25% over MSRP. A good salesman can make a few percent off MSRP seem like the best deal in the country. A salesman who sits at his desk looking busy or spends his day bullshitting with the guy at the parts counter isn't going to have an easy time selling a bike no matter how low the prices go. | ||
| Chellem |
I guess the main point is that some dealers are willing to do what it takes to keep bikes moving off the floor and others are still operating as if people were still beating down their doors to get bikes loaded down with accessories and listing at 25% over MSRP. No matter how many bikes you sell, you can't make up a loss in "volume". I wish I could prove it to you without pissing off every dealer in the nation, AND my boss (read - FATHER) but I can't. All I can do is ask you to use some common sense. If dealers truly made 50% on these bikes, discounting them down would be a no-brainer. Dealers who are selling bikes at below cost are making a conscious decision - they'd rather lose money on the bikes than keep them around. I clicked the link, and these deals are on 2008 models - at least at first glance. Yeah, it's probably time to cut your losses on now 2YO models. I honestly don't know how a dealer can stay in business selling bikes below cost. Guess they're just better at this than me. Of course, we don't have any '08 Harleys left, so I can't really put myself in their position. ->ChelleM | ||
| F_skinner |
Chellem, great discussion. I am learning a lot. I could not be a salesman and admire those that can put up with John Q Public (or some people on this site). It takes a centered person to put up with that and still go back to work the next day. I paid MSRP for my Uly at a stellar dealership. I was not going to haggle over a few hundred dollars with a dealership that is enthusiastic about Buells. I must be in the minority I guess. Frank | ||
| Cityxslicker |
Look. I sell bikes to make money, to pay my bills, to add bikes to my garage and pay for the stupid fun that I like to do when I am not working. I will help you to find the bike you want, the bike you need, the bike you dont know you cant live without. That costs me time, effort and some damn knowledge. You are paying for that service, and its built into the price of the bike. Now if you just wanna grab a bike off the shelf, I hear WalMart has a cycle section. | ||
| Bill0351 |
"No matter how many bikes you sell, you can't make up a loss in "volume"." No, but moving bikes fast by selling at or slightly better than your real "break-even point" is probably a better bet than holding out for two years or more before cutting your losses. Paying MSRP at a great dealership is fine, but with several very good dealerships within a days ride from me, and a miserable one in town, I would buy from whoever gave me the best price. | ||
| Liquorwhere |
I guess the main point is that some dealers are willing to do what it takes to keep bikes moving off the floor and others are still operating as if people were still beating down their doors to get bikes loaded down with accessories and listing at 25% over MSRP. I am not sure what you do for a living, but I would like to point something out. Once you lower the price, you can't go back up again on the same unit a week later, so, you try to hold it at the highest level you can, routinely called what the market will bear, and drop in small fractions on individual deals until interest starts to wane, then drop with in store advertising and hope floor traffic can pick up the sales...then advertise the same price in print or local media and see if sales pick up, last resort is to sell it off at cost or below unless there is a dealer rebate or incentive that is advertised at a macro level available. This is true of business the world over, any business, and you will find, those that continually drop the prices to nothing will be busy in the short term, create few if any REAL ties to the customer because the purchase decision was made solely on price and not on a combination of service, price, perks, professionalism, support for the brand or product etc etc, those companies go bankrupt first. Those companies that are conservative in their cash management, cut their losses only when they have to or when they are actually given an incentive to, hold the price of the bike or product at a reasonable level for resale, meaning what the market will bear, helps retain the value of the product and shows financial strength and insight. Look sometimes you do have to just cut your losses and be done with it, but a loss leader, as it is called to advertise a product below market value in hopes of attracting complimentary sales to offset the loss, is rarely a good idea. The only time a loss leader is equitable is if the product has such a low cost that almost ANY purchase that is complimentary to that will cover the cost of goods sold (or in this case given away) or there is a tangible positive in tax position or if it can be somehow recouped from the macro organization. There ya go. something to think about. Giving bikes or anything away just to put them in the public eye only serves to de-valuate the product in people's eyes. HD was remarkable because in the 1990-early 2000's they were wildly popular and scarce, waiting lists create a supply and demand algorithm, demand goes up, supply stays static, price increases and used items that are already in the market place gain value. It is a really easy theory to grasp, demand goes down, price will decrease, units already in the market will lose value until supplies meet equilibrium with demands and then the price will go back up again...and so will existing units. cool, rant over. | ||
| Bill0351 |
That didn't sound like a rant at all. It was a good explanation of simple supply and demand. The big problem is that there are a lot of people who have built their lives around building, selling, and servicing Harley Davidsons and Buells. As each dealership goes for their slice of the shrinking pie, there are bound to be some casualties. Some dealerships will find a formula to stay in business and others won't. Hopefully the dealerships that worked hard all along are the survivors and the ones like the dealership in Green Bay will fold. One thing I would be interested to know is how much money Harley Davidson makes on each bike when they sell it to the dealership. At that point has the MoCo made its money, or do they not get paid until the bike actually sells? | ||
| Liquorwhere |
One thing I would be interested to know is how much money Harley Davidson makes on each bike when they sell it to the dealership. At that point has the MoCo made its money, or do they not get paid until the bike actually sells? Well it is kind of both, when they ship they are either paid on invoice by the dealership for the bike, sometimes there is flooring for 60-90 days free, don't know if HD does that but other's do, then the invoice is due, so it either goes on floorplan, basically a line of credit that charges a minimum cost per unit for usually one year then the invoice is due in full or it is paid outright. It truly depends on the dealership and brands, floorplanning is wide spread, not many dealerships pay the bill and own the bike as it hits the floor, but some do...now as far as WHO holds the note on the floorplan, I would think HD Credit, as with the Aprilia/Sea-Doo multi line I worked in used GE Money. I honestly don't know if the floorplan company pays the invoice to HD or brand x manufacturer or if it is held for the 12 months or whatever the terms are for the agreement. Either way sales do effect the Motorcompany, if sales look bleak on the outlook then Unit orders may drop, with HD they work off allocations and I am not sure if once the allocation is established if you can refuse to take a bike they send...I don't know, but it does effect them in terms of production management, hence the shut downs and lay-offs. With Aprilia it was a quarterly unit order so if you still had a bunch on the floor the unit order was typically smaller the next quarter...of course Aprilia had a bad habit of shipping to you whatever they wanted then after you had them tell you...oh sorry...well why not just keep them??? so there ya go. | ||
| Dirt |
"This is a fabulous illustration of the problem of the internet. That statement is absolute hilarity. It is not even in the order of magnitude of being correct. Folks, unfortunately, read something like that and believe it. But before we go any further, let's apply courtesy and decorum. Please quote your source. Where did you get that information?" Court, couldn't agree more. However, people who live in glass houses should not throw stones, or in other words, I think everyone on this board is guilty of posting information (intentional or otherwise) that is simply not true. For example, back in August of 2007 in response to comments made about Ulysses wheel bearings, you posted the following: "The wheel bearings, like the drive pins in the 1997 rotors, are fine. It's when they are improperly installed that trouble comes knockin'." Really? I guess I could ask the same questions you asked above about who was your source and where did you get that information. I wonder how many people read your post and believed the problems were strictly due to improper installation. I think we can agree that the bearings were indeed a problem and Buell has seen fit to issue a new updated part. Heck, for 2010 they redesigned the rear axle and switched to yet another type wheel bearing (makes me wonder if the interim bearings will last). Even you have ordered the 2010 Bearing, Spacer & Axle Kit for your Ulysses. Just wanted to vent a little. I'll be the first to admit I'm not perfect. |
