OK, here is a quick explanation:

Take a $10 item for example, let say cost is $6, therefore the profit is $4. Now take the same $10 item and sell it @ $9. So now the profit is $3. Hence for every $10 item I sell, I "lost" $1 in margin. So, in order to recover that $1 in margin, I have to sell more than 1.1X (remember the 10% is across the board in every item sold, not just a one time 10% deal.)

Now, if I sell 1.8X (still 10% off), I recover that $1 I lost in every 10% off deal. All this is loosely base on a cost of 40 points (cost 60 % of retail.)

Now why would $1 in margin make a big difference, you ask? Someone mentioned that @ 40% off, dealer still make money. Well, not entirely true, the mothership makes money, but the dealership might not. Who is paying for lease of building, utilities, employee salary and benefits, local advertising, etc, etc. Just remember if a $10 item costs $6. the profit is not $4. That $4 will have to cover all the above mentioned expense, then, and only then what's left over is the profit.

Now big chain stores, such as Wal-Mart, BestBuy, etc. can offer a deeper discount because they base their profit mainly on volume and lower caliber work force (with all due respect) . So turning over goods faster only works if you have the volume to support it, and paid less for salary/hourly employee. And we all know HD dealership cannot, nor is not design to, turn over product fast and offer much better customer service, in general.

Now most of us badmouth "stealer", but you know what's gonna happen if they try to cut cost by hiring at almost minimum wages work force? Or turn it around and look at it this way, if I went thru schoolings and certification to become a HD tech, will I want to work at a dealership that pay less, but can sell more, both in goods and service?

Remember in 2010, HD last quarter-ish sales drop? They cut production instead of what some of us think they should do, lower price? You see why they do that now? By lowering production, they kinda created a demand more than the supply, now if they cut prices, they might pump out bikes faster than dealers can sell, not to mention all the used bikes will be worth a lot less. It's a bold and effective calculated risk, and it works.

I hope all this make sense to you. And all of us here that are in sales and understand this concept, feel free to chime in.

 

Exactly. It's called "overhead" in the dog-eat-dog world of business.

And...at least with most car dealerships, at some point, they need sell the car because it costs money to insure the car to sit on the lot, and some manufacturers will penalize the dealership if the car sits too long on the floor. It was because of these factors I was able to buy my new Civic in July of 2010 for dealer cost.

Most don't know "the game" so they make money....once in a blue moon, someone comes along and knows how to play it, and they (the dealer) are able to get rid of stock that is now costing them money (insurance and fines remember)...and break even and basically get rid of the damn thing.

Oh...and the owner generally gets a 3-5% kickback from the factory on each vehicle sold.

That's how you buy a 19K Civic for 16.9K out the door

~Joe

 

Good example, therefore if a car dealer is offering, say, $1 above invoice. It merely mean if they buy one car from manufacturer, that's how much it cost them, what they don't tell you is volume discount, dealer incentives (kickback), etc.

After all, nobody can remain in business if they sell their inventory at $1 above invoice. Once again, with all due respect, they didn't lie, they just don't tell you everything.

 

I have a good reason why...If you want to see why read your own post.

 

Double post

 

Further enlighten me!

 

double post

 

It is very clear you have been FIRED as a customer. If you go in and make some more noise maybe they will stop selling you stuff even at full retail. You are what we in the trade refer to as a "high maintenance" customer and 4 yrs. is a long time to put up with your kind.

I am not attacking you, you made the original post asking the question.Just read your post and know there are 10 more people go in there every day asking the same favors. We actually had someone bring in his buddies' MILITARY ID and wanted our military discount!!

Mark

 

So, what you're saying Mark, is you are doing so well, that you don't need peoples business?

I'd venture to guess you don't speak for the owner.


Money is money....money is why the business is open. You obviously work for the man, isntead of being the man.

Once he finds out you are sending business away, you will be out of a job...so be careful.

You were hired to make the man money. If you are sending customers away, then you sending money away. Not smart.

~Joe

 

that's a bit*h good dealers are getting rare around here.