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OldFart
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I was talking with a dealership owner, who I've known for some years, and he told me that his cost was only about 10% under MSRP. I'm having trouble believing that. I know they make their big money on accessories and the boutique crap, but 10% on the bike?
Anybody know some real numbers?
 

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100% mark up isn't much at all.

I used to work at a factory that made rotors and drums for cars and the mark up was well over 300%.

I was able to get 2 rotors, 2 drums, shoes and pads for the cost of 1 rotor at the parts store.

I am sure with a lot of parts coming from 3rd world countries, the MoCo is making money hand over fist.
 

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Around 10% sounds about right. You are right the money comes in from service, parts, and motor clothes is where the profit money comes in. It is just like a car dealer. With out the parts and service departments a NEW car dealer would go out of buisness. Used car dealers stay in business because there is profit in those but in new cars the profit is around 10%.
 

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I was 43, 15 years ago!!
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JJsFLHX said:
Around 10% sounds about right. You are right the money comes in from service, parts, and motor clothes is where the profit money comes in. It is just like a car dealer. With out the parts and service departments a NEW car dealer would go out of buisness. Used car dealers stay in business because there is profit in those but in new cars the profit is around 10%.
10% may be right, but I doubt it's based on the MSRP!

They do make the bulk of their money from parts and especially on "accessories" and "apparel"!

Then there's the $560 dealer "Setup" charge, that's pure profit!
 

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Total Nutcase
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They also get some pretty large kickbacks from the interest on loans for new (and used) bikes, plus bonuses from the moco for meeting sales goals.
 

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If you think about it, it better be more than 10%. For a 20k bike thats 2k, to make a salary of 30k/year a salesman would have to sell ~ 20 bikes a year just to cover his salary and taxes, benefits, and the dealer hasn't made anything yet to pay for his building, secretaries, salary for himself, etc.

I'd bet they make more than 10%, but agree wholeheartedly that the majority of the profits come from the made in china clothes, and parts.

I'm not begrudging them their wages, a new HD is a luxury item.
 

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ELECTROSTATIC said:
I was talking with a dealership owner, who I've known for some years, and he told me that his cost was only about 10% under MSRP. I'm having trouble believing that. I know they make their big money on accessories and the boutique crap, but 10% on the bike?
Anybody know some real numbers?
He either lyed or is getting ripped off. It's typically more like 40% under MSRP...
 

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Fire4Effect said:
He either lyed or is getting ripped off. It's typically more like 40% under MSRP...
Not sure what makes you think they make that much. I'm sure the markup depends on the bike, less on Sportys and more on Touring. I would guess as low as 10-15% on some to 15-20% on others.
 

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Infidel
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The mark up on my JIMS 120 motor was less than 10%. I was standing their when the parts person called JIMS and got their price and mine. Difference was $600.
 

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If a dealer sells a bike at MSRP he is cut about 20-25% of the total. Bikes have a much bigger markup in cost than the automobile market. Take a Sportster 1200 Custom. If the dealer sells that bike at MSRP he will profit about $2000. And this is based on a small dealership. The larger high volume dealerships will have better kickbacks and incentives from the factory.
 

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A freind of mine was at one point in time freinds with a HD dealership owner. He told me the profit on a Big twin is $6000 or $7000. I can't remember the exact amount but one of those 2 amounts was it. I thought normal markup for most businesses was 30%. so that would be right, if you had a $20,000 30% of that is $6,000.
 

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EASY DOES IT
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JJsFLHX said:
Around 10% sounds about right. You are right the money comes in from service, parts, and motor clothes is where the profit money comes in. It is just like a car dealer. With out the parts and service departments a NEW car dealer would go out of buisness. Used car dealers stay in business because there is profit in those but in new cars the profit is around 10%.
Sorry to disagree but the profit in new cars ranges from 18% (remember the Corvair, Chevette) to as high as 37% (Corvette, Hummer 2) depending on the model, start adding accessories and the margin skyrockets...I'd guess the 10% is way low for a bike that has low production costs...I'm told a FXST is about $9k including marketing and shipping, though it's been in production for a long while now which has reduced front end costs and raised back end profits.
 

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Have chrome will travel
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Was he talking net profits or gross margin? 10% net is a good profit in any distribution business while 10% margin will put you out of business fast. I find it hard to believe that they are only making a 10% margin on MSRP bikes. I was talking to a buddy today who works for a local dealer and while he wouldn't get into numbers with me he said "Don't worry about the dealer's mark up they are doing just fine"
 

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Fire4Effect said:
He either lyed or is getting ripped off. It's typically more like 40% under MSRP...
40%??? That may be true if they're charging more than MSRP, but I can't see that if they're selling at MSRP.
 

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brownjams said:
A freind of mine was at one point in time freinds with a HD dealership owner. He told me the profit on a Big twin is $6000 or $7000. I can't remember the exact amount but one of those 2 amounts was it. I thought normal markup for most businesses was 30%. so that would be right, if you had a $20,000 30% of that is $6,000.
this dealer sells at msrp
 

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springer- said:
On hard parts the markup is 100%

If you pay $129 for a set of pistons, they made $65.
Not totaly true. My wife works at the local dealership. Markup on Genuine Harley Davidson parts and accessories including motorclothes, collectables etc is actually much less than that. Aftermarket p&a get marked up much higher. We get an employee discount based on cost plus a percentage. My discount is much less on Genuine H-D. The example you gave may be close if those pistons are aftermarket but not if they are OEM.
 

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XLIII
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utrvp said:
Not totaly true. My wife works at the local dealership. Markup on Genuine Harley Davidson parts and accessories including motorclothes, collectables etc is actually much less than that. Aftermarket p&a get marked up much higher. We get an employee discount based on cost plus a percentage. My discount is much less on Genuine H-D. The example you gave may be close if those pistons are aftermarket but not if they are OEM.
Hmmmmmm.
I can't see H-D lowering their profit margins, and back when a friend's father owned a dealership, there was 100% markup on most of that stuff.
Also, the online discounters discount the H-D stuff by 20-25%, while they do stuff out of the Drag Catalog, etc., by only 10-15%...
 

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utrvp said:
Not totaly true. My wife works at the local dealership. Markup on Genuine Harley Davidson parts and accessories including motorclothes, collectables etc is actually much less than that. Aftermarket p&a get marked up much higher. We get an employee discount based on cost plus a percentage. My discount is much less on Genuine H-D. The example you gave may be close if those pistons are aftermarket but not if they are OEM.
Do you really think your discount doesn't leave them any profit...my guess is that they could sell all the part, accessories and clothes at 50% off and still make a killing...I know what it costs to produce most of that stuff...
 
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