Dealer Profit ???

[Elembytes]

I have been out shopping for a 2012 RT-S SE5- find it very interesting in the amount of price differences out there. How does one determine if a dealer's "Profit" is too much or out of range? I was told $1500 today. I understand they need to make money too, but in our house $1500.00 pays a lot of bills. Heck, when I have bought a Honda Civic before, the dealer only took $500 in profit or commission or what ever the terms are.

I don't understand how some dealers around the country can sell BIG DISCOUNTS for the uni? Then they get bashed and trashed by other dealers saying that undercutting ruins the business, and that dealers with large inventories and store them outside in crates have problems with mice chewing through wires etc.,

Can anyone shed light? Getting hard to locate what I want and don't really want to drive all over the country but may have to in order to get what I feel is a reasonable price in this economy. I really wish Can-Am Spyders were not so pricey! (Big sigh)

I am trying---time will tell.

Thanks in advance!

 

[Recluze]

I don't understand what constitutes dealer profits. But my experience has been that the dealer will make a lot more money on servicing one of these and making warranty repairs then they will on selling one. So if you don't like the price of a Spyder going in, the dealer maintenance will really wear you down. I bought a used out of warranty Spyder just to avoid some of this. But buying used is another set of problems and you should know something about this machine before venturing down that path. Even then it is a crap shoot. Good luck. BTW I have had very good service out of both a new and then a used Spyder.

 

[Dizneyman]

Dont be fooled when a car dealer tells you he only made $500.00 profit. They get paid something called "dealer holdback" from the manufacturer of anywhere from about 4-5 % of the car. They also get volume bumps for reaching certain numbers of sold units months, quarterly and yearly. This incentives to the dealer can be quite big, hence when you hear they are selling the car for invoice, they actually may just to hit that magic number. I doubt enough bikes are sold to warrant that kind of incentive to the dealers..

 

[gnirtsnod]

First, if you want to feel real good about your deal, go ride and price an H-D trike before going to the Can Am dealer.

I bought my 2012, RT-S, SE5 just 11 days ago and PO'd the salesman by being willing to travel to get the deal I wanted. I never rode one before going to see him and he was quite helpful acclimating me to the machine, although the assembly tech who led me on the test drive did more.

When I called the following week to make a deal, they were not as much "my friend" as the week before; however, knowing what other dealers were selling the units for (Cycle Trader) helped in my negotiations. I got the best price from a dealer in western Alabama then went back to the well, so to speak, at the dealer 100 miles away. They matched the deal and were not too happy about doing so. They were even less happy when I declined the tire and wheel warranty, the extended warranty, and the service plan.

Do your homework and work your best deal, but remember, the dealer will make money and that's okay. You want to be paid for the work you do, don't you? If you are truly willing to travel, you will get the unit you want...and at a fair price. Good luck.

PM me for more details if you are interested.

 

[MouthPiece]

Too many variables in the equation. Either you want it and will pay for it or you won't.

Chris

 

[Bob Denman]

The guy's not in business to make you a great deal; he's in business to feed and provide for his family.
Did you offer to work for less so that your boss' ledger looked better?
Buy it or not; price whouldn't be the only consideration in the equation...

 

[Pennyrick]

I bought my 2012, RT-S, SE5 just 11 days ago and PO'd the salesman by being willing to travel to get the deal I wanted. I never rode one before going to see him and he was quite helpful acclimating me to the machine, although the assembly tech who led me on the test drive did more.

When I called the following week to make a deal, they were not as much "my friend" as the week before; however, knowing what other dealers were selling the units for (Cycle Trader) helped in my negotiations. I got the best price from a dealer in western Alabama then went back to the well, so to speak, at the dealer 100 miles away. They matched the deal and were not too happy about doing so. They were even less happy when I declined the tire and wheel warranty, the extended warranty, and the service plan.
.

You know... I like to negotiate but I would rather pay an extra $500-1,000 and make a friend of my dealer. We have probably paid more for our Spyders and ATV's than if we had traveled around grinding on pricing but it's nice to feel like a valued customer and be treated as such. It will pay off in the long run.

 

[boborgera]

Any dealer that tells you he ''Only'' makes 5 hundred dollars on an item that sells for 25/30 k is telling you what you want to hear' not the reality.
At 5 hundred he cant even pay the taxes on his shop/building, Let alone the rest of the upkeep'nojoke

 

[ARtraveler]

This subject comes up from time to time and there are a lot of opinions about it.

My take: A dealer needs to make a sufficient profit to stay in business. There is a lot of overhead. When a dealer buys a Spyder from BRP he/she pays X. When they sell it to the customer, the difference is the gross profit. The gross profit then goes to covering the operating expenses of the business--from which is deducted all the other expenses--rent, wages, insurance, utilities etc. If anything is left over at the end of the operating period it is called net profit.

The dealers also need to make profit on the servicing of the vehicle and the sale of accessories. There is also a lot of overhead involved with service depts. The mechanics, the parts inventory, the equipment needed to service the Spyder.

Each buyer needs to determine what is the best price for them. I believe in establishing a relationship with my servicing dealer because I am ultimately going to be at their mercy when it comes to solving issues or getting service within a reasonable time period.

Some people have run into dealers that wont service a vehicle unless you purchased it from them. Other dealers have a bad reputation of not knowing what they are doing when it comes to service. I am felling that many of the "lowball" dealers just want your money for the Spyder and could care less about servicing. They would rather you take it somewhere else. The "somewhere else" is sometimes the dealer who is ticked off at the lowball dealer and then you--the spyder owner--are caught in the middle.

 

[mrfats]

Sent you a PM...

 

[asp125]

There's one dealer in the whole of my town. The next closest one is 60+ mi away and the one after that is in the next state. They don't have to worry bout competition so there's no incentive to mark prices down; they know you're kind of captive as to getting the service done. Maybe they'll cut you a deal on purchase, but they'll make up for it on service and accessories after the fact.

Buy it at the local dealer, or look around all over for the best price if that's your preference. Don't worry about what the dealer tells you about their profit, they are just interesting in making a sale, it's their job. Profit or not, negotiate the best deal you can or walk to the next dealer, it's your money.

 

[vtrider]

You know... I like to negotiate but I would rather pay an extra $500-1,000 and make a friend of my dealer. We have probably paid more for our Spyders and ATV's than if we had traveled around grinding on pricing but it's nice to feel like a valued customer and be treated as such. It will pay off in the long run.

:agree:

 

[Dragonrider]

The answer is really quite simple.

Call the dealer in Cuba, MO for a quote. If your dealer won't meet that price, go to Cuba & pick up your new ride. I don't know of a better, or more fairly priced, dealer in the country.

I have a dealer 6 miles away, but I travel over 70 miles (one way) for service from a dealer that I trust.

JMHO

 

[MouthPiece]

Anyone for some Twinkies? :roflblack:

 

[Elembytes]

All of the comments are true.......however.....

Thanks to everyone's comments, especially on a Holiday no less.

I think a lot of comments are true, valid and correct. Now, I don't necessarily agree with them all of course.

I think ALL dealers should realize that you can still make a profit by selling at a reasonable cost, and getting a customer's extended warranties, wheel and tire warranties, and gear, and pre-paid maintenance business as noted they all have markup's.

I do not believe that a business has to be treated with gloves on to get them to service your unit with speed and accuracy just because you purchased the unit from that dealer. Period. I think there might even be some laws regarding that maybe not. I bought a car from another dealer cause a salesman I liked moved from my original dealer to another one. However, I still am loyal to the core and take my car and my wife's car to the original dealer. We have a great relationship.

It is a shame though with Spyders to have to travel across the countryside to get the best deal with renting a trailer to haul it back on etc., What's really funny is when a dealer tells you to keep them in the loop and to give them the "last say". Seems to me why not just do what you need to do to sell a unit and move forward.

I find it hard to believe that if a dealer has 100 units sitting in crates around the yard that racoons and mice can get in and gnaw the wires and make nests etc., I am sure it is possible but to what extent?

As far as comments about ledgers and so forth, I understand that as I have been in business once upon a time, but not everyone has large paychecks and expendable cash to an extent that a person doesn't care if they throw an extra $500 to $1500 to a price of a vehicle.

I don't own vehicles that cost 25K or higher. In this economy it isn't easy and it's going to get worse. So we all have to be wise in what we choose to do and how we conduct business.

Personally my wife and I are in education- she is certified and my position is not. I cannot dictate to my boss how much money to pay me, I am a state employee. So the comments on ledgers etc., I do understand however it isn't true for everyone.

I believe in being wise, and not squandering my hard earned dollars. Spyders are a luxury and fun, but again, it shouldn't be a game to get a good deal and to be told that one dealer is ruining the business of other dealerships because they sell so low and to be made to feel like "you don't want your local dealer to make a profit and stay in business. I think this business model is just not real good.

Again I do understand all of your comments, feelings, insights and knowledge.

Thank you again for talking about this even on Thanksgiving! :doorag:

God Speed and God Bless!

 

[MRH]

From what I've experienced, most businesses charge rates that allow them to maximize their long term profit. I say long term, because it isn't about getting as much as possible in any given transaction, but rather building relationships and reputation that continue to bring income through the door.

I'm a business owner, and as a photographer any complaints that business the size of dealerships might have about their competition are put to shame by my competition, who often don't care if they loose money because they get to do 'something they love".

I can't really blame clients who would choose to work with a talented photographer willing to take a loss on a sale (without any real long term strategy), but I certainly don't mind seeing those people go out of business. I chose this business, after all.

The level of sales that takes place in the automotive arena is usually very studied, and they are trying to maximize their profit as much as possible (this is not a bad thing - this is what pays for whatever their personal version of a Spyder is in their life), but it isn't at all wrong of you to make the same decisions.

There are advantages to purchasing locally, and to getting a better deal elsewhere. I'd never advocate using your local dealer to do all of your research, and then taking your business elsewhere for smaller price differences, but if another dealer can really give you a much better deal then I don't see that you have much more of an obligation to your local shop than to at least give them a chance to get closer to the price you have been quoted.

Much of the profit is in the service, and your dealer should be very happy to get that business. If they really need to sell the Spyder, then they will make you a better deal. If not, then they can't expect to have your business.

It certainly makes sense to figure in the intangibles, service being a very large one, but they aren't in the business to put extra money in your pocket, and have no reason to expect charity from you.

 

[Mr. White]

I have three dealers within 50 miles. I shopped and bought from the farthest dealer and paid $300 more for BR1. Why? Their tech was superior to the others and they gave me some bennies....cheaper oil/filter changes, BEST warranty extension, etc. It is not always the best...lowest price that is. As many know, the Spyder needs maintenance and good service is important to all of us.

Profit? The cost of units is a closely held secert....few folks in a dealership know the actual cost of a unit. As said, much is involved with the units sold, bought at one time, steady sales, etc. I have a close friend who owns a very successful auto dealership. He pushes good service for his customers and makes nearly all happy. He said the huge service dept. pays all expenses...wages, taxes, utilities, etc for the plant...the profits on auto sales are his....and he does well.

There are three "cost" sheets in the auto business. 1) The retail sticker on the window. 2) A cost sheet they will sometimes show you and add the "$500 profit" to it...also posted on web sites, etc. 3) The invoice price the dealer pays the auto manufacture. You will never see this and few do....4) The EOY holdbacks, kickbacks and other perks very and are secret too.

If you are happy with your deal and your machine after two years, ya done good....


:spyder2:

 

[Elembytes]

Thanks George!

I have three dealers within 50 miles. I shopped and bought from the farthest dealer and paid $300 more for BR1. Why? Their tech was superior to the others and they gave me some bennies....cheaper oil/filter changes, BEST warranty extension, etc. It is not always the best...lowest price that is. As many know, the Spyder needs maintenance and good service is important to all of us.

Profit? The cost of units is a closely held secert....few folks in a dealership know the actual cost of a unit. As said, much is involved with the units sold, bought at one time, steady sales, etc. I have a close friend who owns a very successful auto dealership. He pushes good service for his customers and makes nearly all happy. He said the huge service dept. pays all expenses...wages, taxes, utilities, etc for the plant...the profits on auto sales are his....and he does well.

There are three "cost" sheets in the auto business. 1) The retail sticker on the window. 2) A cost sheet they will sometimes show you and add the "$500 profit" to it...also posted on web sites, etc. 3) The invoice price the dealer pays the auto manufacture. You will never see this and few do....4) The EOY holdbacks, kickbacks and other perks very and are secret too.

If you are happy with your deal and your machine after two years, ya done good....


:spyder2:

Good points---this one dealer sells many different lines but when they say that the Can-Am brings in a better profit margin than the others that too rings a bell in my head. Just don't care for the games and mind games at that. Sell a product, stick behind it, and realize you may lose some on the sale but you'll make it up in service, gear, mods, extended warranties, etc., Seems to me it should be a no-brainer!

Thank you again- and Happy Thanksgiving- count each blessing one by one!

 

[Slybird]

The answer is really quite simple.

Call the dealer in Cuba, MO for a quote. If your dealer won't meet that price, go to Cuba & pick up your new ride. I don't know of a better, or more fairly priced, dealer in the country.

I have a dealer 6 miles away, but I travel over 70 miles (one way) for service from a dealer that I trust.

JMHO

I totally agree - - the dealer that's only 6 miles away sucks (sales AND service) and the dealer in Longview ROCKS!!! The dealer in Portland's service department doesn't know its head from a hole in the ground and will "bait and switch" to get you to buy. The dealer in Longview - Pro Caliber Motorsports - deals with you fairly and their service department is second to none!!!

 

[MRH]

Good points---this one dealer sells many different lines but when they say that the Can-Am brings in a better profit margin than the others that too rings a bell in my head. Just don't care for the games and mind games at that. Sell a product, stick behind it, and realize you may lose some on the sale but you'll make it up in service, gear, mods, extended warranties, etc., Seems to me it should be a no-brainer!

Thank you again- and Happy Thanksgiving- count each blessing one by one!

Respectfully, why would you expect a dealer to loose money on any sale (unless they really do need to clear out space, but that is a different matter)? Unless those other profit centers are part of the initial sale, I'd never expect a dealer to make a good deal if it didn't also net them fair compensation towards the costs of running their business.

In my opinion, expecting them to loose on the sale to make it up later is just as much a mind game. I know when somebody expects me to work for cheap with promises of profit in the future, that isn't ever a client of value to anybody.