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RE: New ST Options, totally wrong



First this is not meant to be a flame, but. You are WAY, WAY off! 
Dealers  have about a 10-14% margin on new bikes, do the math there 
is not even close 5g's markup! Triumph does NOT pay freight charges 
that is a direct cost to the dealer / customer. How do you figure 
that the bikes get here from the UK? I can tell you that most are air 
freighted want to take a guess how much that costs?? On cars the 
freight charge on the sticker is exactly what the dealer pays. The 
setup is reimbursed by the manufacturers. And there is not a SINGLE 
ITEM in any bike store that has a 400% markup. I was recently the 
Dainese rep for a year or so and most items have 30 to 40% of markup 
figure that everyone wants at least a 10% discount and I can tell you 
for sure that dealers are just making about an average 30-35% 
combined profit for sales , parts, and service. Please I'm not trying 
to be rude but I've been in retail for 20+ years I don't know of 
anything out there other than maybe bubble gum that has a 400% 
markup! I can state absolutely that there is no motor vehicle of any 
kind sold in the USA that has a 50% markup NONE. Not even lawn mowers 
:-)

Erik


>Eric,
>	What's your take on tire costs?  $100 for the tire and $30 for the
>install labor and $7 and change for tax.
>	I paid just under 12,000 for my bike in early February.  That is
>sticker plus two bags and a race can.  How much is the dealer paying for the
>ST itself?  Anybody know?
>	If the bike retails for 10,250 then I estimate that dealers pay
>somewhere between 5-7k for a plain ST.  There is freight and setup costs
>which the manufacturer pays.  I do understand that they may not be getting a
>huge amount for setup but after the first 5 STs it doesn't take as long to
>set one up either.
>	There net profit on the bike if they sell it at sticker would range
>from 25-50%.  30-40% is standard for a company making money on any product
>unless they do volume work.  So the bikes pay for themselves in my scenario.
>Now the merchandising kicks in.  200-400% profit on low dollar items.
>Moderate level items get between 50-100% mark ups depending on volume and
>High level items 10-50% mark ups.
>	The reason behind this methodology is people buy cheaper stuff more
>often than expensive stuff.
>	The only costs for service that a dealer I can see will pay is for
>his service personnel of course a manager which should also be a service
>person, insurance, the cost of service screw ups, tools, and training.
>Tools and training are one time occurrences essentially so that leaves
>insurance and screw ups.  Utilities and location overhead would be covered
>on the sale of bikes.  So that identifies the three departments that make up
>at least my dealer, sales, parts and service.  In my scenario all three
>areas are profit centers.
>	That is the standard model for retail I have been exposed to.  I
>don't see them varying this very much unless it is the owners hobby or hard
>times exist.  Without this type of business model the average business owner
>is wasting his money on a business like this.  So there is some reason why
>your average shop is still open.
>	It should also be made clear that only the owner(s) of any business
>gets rich.  Anybody who works for someone else will only be comfortable at
>best short of being a EO (executive officer) of a fortune 500 company.
>
>	End.
>
>Martin
>
>-----Original Message-----
>From: Eric Sheley [mailto:eric@xxxxxxxxxx]
>Sent: Tuesday, September 21, 1999 4:06 PM
>To: ST@xxxxxxxxxxxxxx
>Subject: RE: New ST Options
>
>
>At 01:53 PM 09/21/1999 -0700, Retherford, Martin wrote:
>
> >	They make there money in parts and service.  I was looking to buy a
>
>I would agree with you on parts only (see below for service) - that's why
>parts managers in Harley dealerships are typically the highest paid in the
>industry (ever see what the average Harley owner spends on accessories?) .
>The point that I was trying to make (and didn't) was that if the dealer
>cuts their bike price and sell at little or no margin and the customer then
>goes mail order (or internet) for parts and accessories, there is no way
>for the dealer to recoup his profits. Bottom line is that it is a business
>and if you want them to stay in business, you should support them within
>reason.
>
> >	The 60 dollars an hour for repairs and service.  Service industry
> >world wide makes a killing.  Why shouldn't the dealers?
>
>Sounds good if you say it fast..... but in the real world of motorcycle
>repair this is not always the case. First, pay the employees a reasonable
>rate. Then pay the service manager on top of that. Add in the cost of rent
>and utilities and the differential on warranty work (what it costs the
>dealer to do warranty work vs what he actually gets back from the company).
>Then factor in the seasonal nature that most dealers face (or how much work
>is that tech doing in the middle of December ?) and I think you'll find
>that the highly profitable service industry averages don't apply anymore.
>
>I don't want to give the impression that they are going to the poor house,
>because most are not. But they are not getting rich either....
>
>- Eric
>
>
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