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Old 01-04-2013, 07:05 AM   #60
gogogordy
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Joined: Feb 2009
Location: Temecula, So. California
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Quote:
Originally Posted by MOPED MEDIC View Post
The reasons dealers add Freight and Setup is that they are charged freight on the bikes they get, and want to pass that cost along, they do pay a technician to assemble and prep the bike (many scooters come from the Mfg. in a crate that is about two and a half feet high and take someone who knows what he is doing two or more hours to prepare for delivery to the customer), they pay interest every month on the inventory on their floor, and the markup on motorcycles and scooters, and parts and accessories is very low compared to just about any other retail business except Walmart. Look at how much overhead a dealer has, and ask yourself how long you could be in business making $300 gross profit every time you sell a unit with a $2600 MSRP for $2600, then subtracting freight, the mechanic's time, and the interest you paid on the bike. Running a successful powersports dealership is very different than joining the Peace Corps and the internet has spawned a whole group of consumers that believe "making a profit" means the dealer should make close to nothing when they buy something but provide them the same level of service a dealer can when they actually make money on a deal. Most dealers got into the business because they are enthusiasts, and are not raking it in hand over fist. There are dealers who get a little carried away with extras sometimes, but most of the lenders have put a stop to that by limiting the amount they will finance on a vehicle and accessories. Gone are the days when a dealer could approve someone for $10,000 and then charge the customer that for a $5000 bike and paint protector.
One reason a lot of dealerships have gone out of business is that in the Go Go days when you could qualify a kid with no credit for an R1 at $69 a month for three years, they figured it would last forever and built Taj Mahals. Many of them did that under pressure from the manufacturer that they would put in another franchise very near if the dealer didn't. New Unit sales dropped during the recession more than 50 percent a year for a few years, and a lot of them just couldn't tote that note anymore.
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