What's a dealer's margin?

Discussion in 'General Discussion / News / Information' started by KZ25, Nov 7, 2012.

  1. KZ25

    KZ25 Ol'Timer

    Every dealer makes his cut when selling a bike and so he should. But as it is with the new CRF250L the prices vary and it seems up to the individual dealer to set the final sales price.
    I'm wondering what his cut is - invoice plus 10%? 20%? More?
    I'm asking because I spotted a whole bunch of unsold Nouvo 135 at the local Yamaha dealer. Several 2008 models, same with 2009, 2010 and 2011. The sales girls of course tell me the '08 model is "one year old" - maybe they are looking for less informed buyers who like the old colors. But I'm not paying the same for a bike with four year old tires, carburator and battery.
    I want to talk to a manager and lowball him; he should be very happy to get one of his '08 models off the showroom floor. This works in the West but I'm not sure Thai dealers are savvy enough.
    That begs the question: what happens if they don't sell the bikes? Will they sit there for another five years?
    So if a new Nouvo is let's say 60K what would be his margin?
     
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  3. monsterman

    monsterman Ol'Timer

    Thai dealers work on much bigger margins than in the west .cars and motorcycles make 30% or more margin in Thailand . many Thai businesses would rather old stock rotted on the shelf than discount it ,

    I have actually seen warehouse of new 10 year old TVs and videos in pattaya rotting because the owner wouldnt cut the prices!!!!!! and there is a big car shed on sukumvit with some cars for sale that have been sitting for over 7 years unsold but he also wont cut prices .
     
  4. feejer

    feejer Ol'Timer

    USA based info, but may shed some light on margins for various makes/models. http://www.seedealercost.com/powersports

    Over here, typically a factory will ship inventory to a dealer and give them 30-60 days to move it without out of pocket cost. Once that expires, then the dealer will be charged a percentage for every day it sits there. So the incentive to cut prices on stale slow-moving stock is definitely there. Thailand must have an up-front pay structure from dealer to factory as I can't imagine a Thai owner sending a check to the factory every month for unsold bikes. Either that or Thai tax law negates the effect somehow by write-downs/depreciation etc. I am sure there is some angle they play to get by with standing firm on price forever.
     
  5. schackster

    schackster Ol'Timer

    The margin often differs depending on whether the customer is Thai or Farang
     
  6. KZ25

    KZ25 Ol'Timer

    Had a few days to think the situation over and agree with what you wrote. When it comes to business (and not only then) Thais have this "my way or the highway" attitude. I've experienced it often and never really understood it - why hurt yourself by making NO sale rather than cut the profit a bit and make a sale? How often did I ask about the rate of a bungalow at low season, was told 1,200 and was denied when I offered 1,000? Either Thais don't know how to deal or they don't care if they make any money. Like that warehouse full of ten year old TVs - that must have been a huge loss because nobody is going to buy them anymore. Reminds me of East Germany after the wall came down; those Easterners had no concept of capitalism nor any business skills. One client didn't want to give me his banking information because he was afraid I'd raid his account!
    Guess I let the dealer hang on to his bikes a bit longer.
     
  7. monsterman

    monsterman Ol'Timer

    Ducati dealers in UK official Margin is 10% on some models 15% on others
    HD official Margin for UK dealers is 20% on bikes 48% on parts

    thats from a dealer mate

    look at mityon in pattaya he has 36 bike shops selling all jap brands ,also vespa, piaggio scooters and big bikes shops around town all owned not rented he makes a huge margin .
     
  8. Billy Baht

    Billy Baht Ol'Timer

    The well to do Thais have deep pockets and just hang on until they get their price.

    Time value of money is no biggie here :)
     

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