I used to be pretty pally with this dealer (til he tried to pull a fast one on me) and he was pretty open about how his business ran. He made his wages in the workshop doing servicing and repairs, and selling bikes only provided beer money, a bonus to his bread and butter work. And this guy was a bona fide Honda dealer with a good reputation. So if you go into a dealers and spend hours pawing over a bike you're interested in, and ask the dealer a million questions, don't be surprised if he looks mildly disinterested...
The main money to be made by dealers is when they get you to sign up to the finance deals because they get a commission. I was once offered £500 more on a PX if I took out the finance rather than walking in with the cash. So I just shows how much they are taking us for.
To give an example . If I sell a ford ka for rrp less any marketing from ford we make about £250. Then take pdi, commission and other small costs off that it ends up nearly at zero. And that's assuming we give no discount and when does that ever happen. As a comparison a middle spec fiesta has about £700. Not loads is it on a 13500 car. Most profit is made on used sales , service and parts. But without new metal being shifted the other bits can't follow. Hence most new car departments actually end up selling to lose money sometimes.
When I bought the 848 I part ex'd the 749S I had in black which was low mileage and lovely condition. Three dealers gave me prices, 2 were around £3k and Ducati Wolves gave me I think it was £4250.
Fig, if dealers sell a load of new stock, they get a 'bonus' payment back from the manufacturers, every quarter. that's why you can sometimes get a better deal when the time is nearly up & they need to shift a few more units to make the quota. it's the principal that the 'pile em high sell em cheap' outfits work on, no or little profit on the sale, then the kick backs from the finance deals & manufacturers turn the profit.
That doesn't help the smaller dealership, he has to keep his prices down in order to compete, but doesn't sell enough to attract the 'bonuses'.
I don't believe for 1 second dealers make nothing or even £100 off a new bike sale and really on servicing etc to make the profits, theres NO way they would even cover wages of staff let alone premises costs, rates utility bills , etc
allegedly when i was with a fiat dealership they where only making 4-500 pounds per punto sold. the money is in the finance/extras. the dealerships are split in to zones and get a percentage back based on sales.
I love the way you all think bike dealers are rich, dodging around in Rolls Royces making megabucks on every sale. While it's fair to say that most Ducati dealerships are fairly plush affairs, the vast majority of bike shops are one-man concerns, and struggling. The guy I knew started off with a business partner and two mechanics, and ended up for the last few years on his own and struggling to pay himself a wage. Quarterly bonus my arse.
As someone who has their own business it can be tough sometimes, I don't think everyone thinks dealers are billionaires! Some make a lot of money some just make a living, that's life!
