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[Richard230]

I sure hope not.   

In the February issue of Motorcycle Consumer News, a reader writes in and complains about his local motorcycle "superstore" adding huge amounts of "Additional Dealer Profit" (ADP) on to the MSRP of their motorcycles.  He said that the lowest amount of ADP was 15% and one motorcycle, with an MSRP of $11,000, had an additional $4,000 tacked on to its retail price. He asks the editor if this is the "new normal?"

The editor replies that "Owners of of automotive dealerships are snapping up (motorcycle) franchises from smaller powersports dealers and turning them into mega-stores where the primary mentality is profit."  He goes on to say: "The general manager of a local H-D store (brought in from luxury automotive sales) told me every bike goes on the floor a least $5,000 over MSRP. At a European superstore in Arizona, neither salespeople nor customers were allowed to ride the bikes, even though they had demo units."...."The GM at a dealer in San Francisco told me his job is to separate money from wallets and make the customer feel good about it."  "I have also had good experiences with boutique shops.  The fewer brands, and the fewer employees, the better."

He finishes up with: " Shop around and vote with your wallet.  There's always someone else selling bikes.  Even Costco offers no-hassle motorcycle pricing, with delivery from the local dealership."

If a dealership tries boosting the MSRP with Zeros it is really going to cut into their yearly sales.   

[clay.leihy]

That's why I went an hour away to Fort Collins rather than just down to Denver to buy my Zero. Unique Rides only charges MSRP for new bikes, no extra fees.

2015 FX ZF6.5 👹 DoD #2160,6

[Richard230]

I hope that these auto dealership-owned motorcycle superstores learn pretty fast that motorcycle buyers are not like car buyers.  Most of us can tell when we are getting screwed and will walk out the door pretty quickly.  There are plenty of other fish in the sea for us to hook with our loose change.   

After a couple of years of poor sales, both the dealerships and their franchise partners will come to the conclusion that being in the motorcycle retail business is not all that profitable, will bail out of that big idea and invest in the sales of a more necessary product like washing machines and refrigerators.   

I sure hope that that "general manager" at the SF store in the editor's reply is not working at SF Moto, as that is the local Zero dealer and where I would go to buy my next Zero.  I am willing to pay MSRP, plus the same destination and preparation fees that everyone else does, but I am not interested in paying any "additional dealer profit".  When I hear that, I walk out the door. 

[MrDude_1]

I hope that these auto dealership-owned motorcycle superstores learn pretty fast that motorcycle buyers are not like car buyers.  Most of us can tell when we are getting screwed and will walk out the door pretty quickly. 

perhaps its different here because of the air force  and navy base... but most buyers are younger men... and financially dumb

[Richard230]

I hope that these auto dealership-owned motorcycle superstores learn pretty fast that motorcycle buyers are not like car buyers.  Most of us can tell when we are getting screwed and will walk out the door pretty quickly. 

perhaps its different here because of the air force  and navy base... but most buyers are younger men... and financially dumb

That is one of my major issues about our education system.  There appears to be no attempt to teach young people in high school how to manage their finances, interview for a job, balance a checkbook, use a credit card, cook their own food, wash their own clothes and dishes, clean their living quarters, tell a good deal from a bad deal, etc. - to say nothing of how to tell real facts from the fiction that they see on TV or on a "smart" phone.   

[Killroy]

That is why its so much more cost effective to buy used on from a private party.  Yet, its hard to find a electric motorcycle private party that is not old (for a EV)

So when I was looking for my Zero, I looked for a dealer demo.  I thought that everything in my area was overpriced and the dealers like to add fees, so I went out of state to save ~$4000.  I just had it shipped from Alabama to California for $450.

[Richard230]

This weekend I was speaking with the sales manager of my BMW shop (and former Triumph dealer who is the topic of this thread) and I asked her if they were going to get in another franchise (you know what I was thinking  ) to replace the Triumph brand.  What she told me was that they were going to start selling more used bikes as they made a larger profit per "unit" for the shop than selling new Triumphs ever did. For anyone like me who trades-in bikes (that I don't give to my daughter) to a dealer when I buy a new one, that is no big surprise.   

[bluefoxicy]

The editor replies that "Owners of of automotive dealerships are snapping up (motorcycle) franchises from smaller powersports dealers and turning them into mega-stores where the primary mentality is profit."

That sounds like a seasonal or regional thing, either trying to grab early-spring buyers or get money out of a gentrified area.

If a dealership tries boosting the MSRP with Zeros it is really going to cut into their yearly sales.   

And then some.  Money moves in steps--each pay period, each year, whatever.  Higher margins means fewer pockets getting that money at each tick, which means even if they capture a certain demographic, that demographic will have less to spend on other things--it'll cut into some other business's yearly sales (and associated jobs).

Thing is you can get a new motorcycle quote online from a lot of manufacturers.  You can have them send that to the dealership, and that's what you pay.  Their ultimate strategy might be to get MSRP by making people feel good about "beating them" and "getting a fair price" by going to the manufacturer for a quote.  Customer thinks he's "sticking it to the man", dealer is getting no-haggle prices and laughing at these fools who think they outsmarted 'em.

I think I like this.  The manufacturers inventory the vehicles at a price well-below MSRP; the MSRP is a few thousand dollars of profit on cars.  A Kawaski Ninja 1000 is under something like $9k inventory, $12K MSRP.  Buyers haggle the prices down, so the real price is kind of obscured; US auto manufacturers are high-profit gigs at around 12% net profits (luxury manufacturers such as Tesla are as high as 22%), but a lot of businesses are net 4%-8% operating profit average over 10 years, and the average US corporate profits are under 10%.

When MSRP is the price, they're going to have a bit more trouble moving a $25,000 car when the $23,500 Suzuki is about the same deal.  Those MSRPs might come down closer to inventory as they try to out-price each other.

Dealerships have been steady at 2.2% net operating profits for years, by the way.  Haggling takes some of the price competition away from the manufacturers by making sale prices hard-to-predict for those of us who don't have an inventory price sheet.  It's a fun game (especially if you're cheating), but we pay to play.

[Richard230]

Some years ago I was told that BMW prices their motorcycles in the U.S. to provide their dealerships with around a 10% profit margin.  I have no idea if that is true or not, but it sounds reasonable.  I know that my BMW motorcycle shop has a large overhead, with three salespeople, a finance/insurance guy, four parts people, a service writer, several technicians (that come and go all of the time), a bookkeeper, an internet guru and managers for every department.  And everyone of those people get various benefits and all of the other required things that CA and municipal laws grant them as an employee working in the state. And then you have all of the other costs that go into running an automotive-type business and owning buildings and land.

Personally, I never could figure out how a motorcycle shop could ever make a profit, especially in California, considering that they only sell a few hundred "units" a year.  And add to that the continue decline of over-the-counter parts and accessory sales due to the internet.  It is a real mystery to me how they make ends meet, much less stay in business and make a profit.     But they do.   

[Alan Stewart]

My understanding, at least for auto dealerships, is that they most of their money from service and used car sales. Most of new car profits go to the manufacturer and commission for the sales person.

[Richard230]

My understanding, at least for auto dealerships, is that they most of their money from service and used car sales. Most of new car profits go to the manufacturer and commission for the sales person.

That might be true.  But then you might wonder if servicing electric motorcycles is going to be all that profitable for dealers - especially compared with servicing a complicated IC bike, like a BMW or KTM?