| Author |
Message |
Dale W Spradling (Drtax)
Member
Username: Drtax
Post Number: 380
Registered: 4-2003
| | Posted on Sunday, September 14, 2003 - 11:44 am: | |
In a past life, I came this close to opening a BMW motorcycle dealership. I'm glad that I didn't because it would have ruined a good hobby.
Basically, the markup on a new $18K motorcycle is about 12%, if you can sell it for sticker. Thus, on average, a BMW dealer makes about $1,800 on a $18,000 motorcycle. In a good month, you hope to sell 6 motorcycles. You do the math.
Basically, here's how it works:
The new whatever that a dealership sells generates the buzz and brings people in. You hope to make enough profit on new vehicle sales to cover advertising and your sales overhead. The profit on parts and accessories (Some Harley dealers make more profit selling bad a_ss biker clothes than they do on bikes) pays the rent. And the service profit goes to the dealer.
If everything goes right, a owner-dealer can make about $100K a year. If not...
Now, let's consider a Ferrari dealership. Your initial ante to buy in, assuming you can find one for sale, will be roughly 7 million. Thus, in addition to paying the bills, you have to justify the risk of investing a lot of money into a car dealership where, given a chance, everybody will try to steal everything that isn't bolted to the ground, and then some. If you assume a risk premium of 10%, this means that you needs to gin up an additional $700,000 in profits to justify the invesment.
Compare this to investing in junk muni bonds that yield, say, 4%. The resulting tax-free interest will enable you to buy a new Ferrari each year and you don't have to listen to one customer gripe!
Long story short, so what if a dealership makes $60K off an Enzo? They deserve it.
Dale
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Nebula Class (Nebulaclass)
Member
Username: Nebulaclass
Post Number: 445
Registered: 11-2002
| | Posted on Saturday, September 13, 2003 - 9:57 pm: | |
Darth - Funny you should mention that.
When I started working at Ogner, they had *just* put a policy in place limiting comms to 6k per car. The reason they did this is because a few sales people, after selling the first few 360 Spiders for 200k over sticker and making about 22k in comms/car, decided to take a few months off. The Ogners didn't like that very much, and hence, the 6k limit was put in place. |
DL (Darth550)
Member
Username: Darth550
Post Number: 270
Registered: 7-2003
| | Posted on Saturday, September 13, 2003 - 9:51 pm: | |
I also know that a lot of the sales people are limited to 5k max commission per car... even when the 360s were going for 100 over. Sounds like a raw deal but there you have it.
DL |
Nebula Class (Nebulaclass)
Member
Username: Nebulaclass
Post Number: 441
Registered: 11-2002
| | Posted on Saturday, September 13, 2003 - 7:45 pm: | |
When I sold 'em, the only time I came close to knowing the invoice was when we marked a brand new 2000 model 456 down to invoice. It had been on the lot for over a year, and it needed to be sold.
I beleive the sticker was 228k and the selling price was 200k. Of course, these numbers are pretty fuzzy..... |
J.D. Smythe (Jeff)
Member
Username: Jeff
Post Number: 263
Registered: 2-2001
| | Posted on Saturday, September 13, 2003 - 7:25 pm: | |
You guys are close but here are the numbers I was given from a reliable source. A dealer is ELIGIBLE for 12% or 10% max depending on the type of dealership. Eligible is the key word
Here's the breakout
If the dealer sells only Ferrari & Maser then he is eligible for the 12%. If the dealer sells other cars too (like Porsche) then the dealer is only eligible for 10%
Then FNA holds back 3%. The dealer gets some or all of this 3% back at the end of the year based on the the dealer's CSI score (customer satisfaction survey)
So, for a Ferrari/Maser only dealer it's 9-12%
For a nonexclusive dealer it's 7-10%
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Mr. Doody (Doody)
Intermediate Member
Username: Doody
Post Number: 1715
Registered: 11-2001
| | Posted on Saturday, September 13, 2003 - 2:34 pm: | |
i've heard 14% as well here in the US.
so about 20 large per 360; and 30 large per 12cyl.
doody. |
DL (Darth550)
Member
Username: Darth550
Post Number: 269
Registered: 7-2003
| | Posted on Saturday, September 13, 2003 - 12:41 pm: | |
.86 on the dollar
DL |
Al LaPeter (Lapeter)
Junior Member
Username: Lapeter
Post Number: 136
Registered: 6-2002
| | Posted on Saturday, September 13, 2003 - 12:39 pm: | |
I'm going to guess 90% on new cars. I think on trades they try to make $15,000 to $20,000 from what I can find out. |
Jerry W. (Tork1966)
Member
Username: Tork1966
Post Number: 949
Registered: 7-2001
| | Posted on Saturday, September 13, 2003 - 12:18 pm: | |
I have a friend in the fork lift business and another in the elevator business. Both say that these items are sold very near cost and that they both make their money in the service areas. The fork lift guys make out on trade-ins as well. The farm implement business is very low margin as well. |
G. Green (Mr_green)
Member
Username: Mr_green
Post Number: 275
Registered: 8-2003
| | Posted on Saturday, September 13, 2003 - 12:13 pm: | |
The F-car dealers make there money in the mechanics bay, also at the parts counter. |
Kds (Kds)
Junior Member
Username: Kds
Post Number: 168
Registered: 5-2003
| | Posted on Saturday, September 13, 2003 - 11:58 am: | |
Here in Canada for example, Porsche has 13% disclosed profit margin and a 3 % dealer holdback......BMW and Mercedes are between 8-11% with a 2% holdback. I imagine given the margins of the cars Ferrari is selling are similiar.
Of course, this does not account for the additional rebates and incentives that have just appeared for these 3 manufacturers which Ferrari will probably not need to resort to. For my 7 years with Mercedes the corporate mantra was....(said in your best German acccent) "Ve vill never have rebates or low interest loans...ve are Mercedes".....well here you go.
In my experience the more popular the model...naturally...the smaller the margin the manufacturer leaves for the dealer.
The new Porsche Carrera GT for example...at about $599K CDN will not have a dealer markup at all. The dealers will be given a retail delivery credit of about $8K CDN I have been told, on each vehicle that they put over the curb. Needless to say...the dealer network and sales people are pissed. |
Bart Duesler (The_bart)
Member
Username: The_bart
Post Number: 339
Registered: 1-2003
| | Posted on Saturday, September 13, 2003 - 11:54 am: | |
Less than we pay |
George Ascherl (Georgef360f1)
New member
Username: Georgef360f1
Post Number: 22
Registered: 8-2002
| | Posted on Saturday, September 13, 2003 - 11:53 am: | |
Does anyone know what the ferrari dealers pay for the 360s and 575s we order? How much are they marked up? |