I don't think he's being flamed - almost all threads are going get some teasing. You probably won't get anything off the price of the bike especially now but you can probably negotiate no transportation fees and credit certificate for parts and service up to $1500 for instance. If the bike is a hot seller, you may get nothing off.

 

As an accountant, I suspect that this is true. A Gross Profit of around 40% is necessary for any retailer to stay in business (In this case the markup is around 56%, gross profit around 36%). I would expect that the markup on clothing is around 150-200% and on parts and accessories around 100%.

Of course others have mentioned that there are a LOT of other expenses involved. In general, a good retailer can bring about 10% of sales to his bottom line. That being the case, a 10% discount on a bike just about wipes out all profit. If the retailer sold every bike he had at a 10% discount, he would only break even. So why would he do that??

Of course market forces and survival sometimes dictate that it is necessary to give a discount. And since margins are higher in accessories etc. the dealer can often "throw some in" or offer these at a good discount to close a sale.

There is also profit in the financing, insuring, and warranting of any vehicle as well if the dealer can also get that business.

 

You sir are sadly mistaken in the automobile world. That would be 8000. gross profit in a 20,000 dollar vehicle. (40%) Just don't happen that way. Maybe in widgets.....

 

I run into that everyday at work....everyone always complains about everything

 

Man, some of you are gullible. I just threw out a number to pull a few chains as no one here really knows what invoice is on a new Harley. And what if someone (like me) throws up a number, are you going to believe it? Apparently YES! LOL

 

Markups on clothing in most arenas is upwards of 1000% or more; however, HD dealers won't be the ones that see that because they have to buy the products from HD. That is why you see alot of retailers selling clothing for 80% off and are still making a good profit on them.

Vehicles and parts on the other hand, do not get much of a markup. I was happy getting $500 off MSRP with a few extras thrown in, I can remember when dealers were selling for well over MSRP and there was a waiting list for the privilege to give them your money.

 

I bought my first large motorcycle new for $2500 out the door. Full retail price at that time in 1976 was $3600. Out the door included sales tax, vehicle license etc. Based on those numbers, I think the markup about the same as the numbers quoted above.

The "invoice" price on cars that you see on Edmunds etc is not what the dealer actually pays. Take a look around a large car dealership. Do you really think they work on 10-12% margins with all the overhead they have????

I do the taxes for a used car dealer, and his actual Gross Profit is 25% on cars that he reports. BUT there can be a significant difference between what the Govt sees and actual profit margins. I don't really know what he makes, just what he reports. But even assuming he's honest (a used car dealer????) that's more than most of you are assuming.

 

Clothing is about 3-500%. I actually know this number from working for a retailer. I suspect HD dealer margins are about the same. Parts etc do have around a 100% markup, not so small.

When you think about retail markups you must think as the dealer does. Most HD sales guys are on commission of some sort, there is "flooring" (financing) costs on vehicles, dealer preparation, and of course just general overhead in having a vehicle on the floor and probably other stuff I can't think of right now. When the dealer talks about his margins, he factors in all these costs, hence dealers are not thinking that their margins are anywhere near 40%. All these costs in the dealers mind are costs of sale that need to added to the actual invoice to get a % markup.

 

This thread certainly isnt worth making enemies over thats for sure. We really make ourselves look bad when we call names over a disagreement.

Going in and negotiating is one thing. Going in and dictating a dealers profit margin is entirely differant. Who cares what the dealers cost is? Go in and work them down until you feel you are getting the price you want. I dont have a problem w/ that. The asking price on my bike was fair I saw no need to negotiate the deal,, i was happy. I wasnt saying just go in and pay more than market value. You think the economy is bad now let consumers start deciding the profit margins based of what retailers pay wholesale.

My advice to the OP is do your research on market values. Know when you go in what other dealers are asking for the same bike. Negotiate and try to get a GOOD deal but if you give the dealer the impression you are trying to control his margin and decide what he should be making on a bike you are more than likely to offend him and negotiations will likely not go far. Just some advice from a business owner. Good luck and enjoy your new ride!

I negotiate almost every job I do. Very seldom really do i get my initial asking price. People wanna feel like they got a deal. Thats fine and I dont mind it. But customers who spin it into a "i wanna make sure your not making to much" situation are usually just a headache and I dodge them. Thats the impression I got from reading the op original post,,,,,,, maybe I misunderstand him and if so I applogize.

I think alot of my opponents on this issue think I am against negotiating and I AM NOT. Just dont see where a buyer has any right the run #'s and decide what somebody should make,,, negotiate and worry about what you pay,, not what somebody is making.

 

I think what the OP meant was he didn't want to be an *** by offering a stupid low price and wants to be fair to the sales guy but wants a good deal!
I totally understand this. Why do so many on here blow up at such a qustion? If I'm buying something, particularly a big ticket item, I'm damn sure going to know the deal I'm getting.