Stealership Encounter

[Wag]

(Smoke_Dog @ Nov. 25 2006,12:17) Well, I've heard what you all have to say! and I feel that there's no way that I would cheat another American for double of what somethings really worth. The dealer has to deal with this guy sometime in the future and how can you look at yourself and justify getting over on someone that bad! Love you neighbor not cheat him! New Orleans is a prime example of what we will face in the furture because of the lack of Unity, Respect, and Love for our fellow AMERICAN!

Careful with a term like "worth." What is anything worth? What's it's really worth is what the buyer will pay for it. If the guy is willing to pay $900 for something, then it's worth $900, pure and simple. If you charge less than that, you're leaving money on the table and as mjn said, PROFIT is not a dirty word. In fact, it's the name of the game. The more the better, indeed!

A good merchandising manager in any retail game will know what his competition is charging people, generally, and will likely price his product in that range. But the reason for doing so is to avoid, as much as possible, the leaving of dollars on the table. At the same time, he doesn't want to drive customers away by overpricing things. It's a game of balancing the two appropriately so as to maximize profits without shooting down sales altogether.

What you are talking about is not how much something is worth but how much the customer FEELS he has been screwed. Or not. If he walks away happy and never finds out what he could have paid for the same thing down the road, then he was not ripped off, no matter how you might define what the "worth" of some product might be. To that guy, it was worth $900, end of discussion.

If, however, he finds out two weeks later that he could have bought the same thing for half the price, then he will FEEL that he got ripped off and all of a sudden, it isn't worth $900 any more. The reverse, of course, is true as well. In that scenario, the dealership made it's extra $450 or whatever and that is likely all they will ever make from that customer because he won't ever come back because of one very important thing: How he FEELS about what happened in the transaction.

It's a game, it's played by everyone on both sides and by no means does it end when the customer walks out the door.

Bottom line is, a dealership is NEVER ripping someone off with a high price, nor is a customer EVER overcharged. The customer can walk away at any time before he hands over the cash.

--Wag--

 

[mjn]

Very nicely said sir!

 

[dadofthree]

Everybody take a deep breath. I felt the cost of the slipons were inflated to make up for giving the bike away. I just paid $300 for a rear tire installed. I had to have the tire so I got stuck.

 

[Turbo-Torch]

(mjn @ Nov. 25 2006,11:41)

(Turbo-Torch @ Nov. 24 2006,23:48) I couldn't care less about service since my bikes or cars will never go back there unless it's for warranty and as long as it's under warranty I'll take it to any dealer I want.

Since ALL DEALERS want to play the numbers game I'm all up for it!  I'll get my bikes and cars for as low a price as possible.  It's pretty easy to do when you pit multiple dealers against each other and have CASH in hand.
They're the ones that want to set the rules and play the games and I'm more than willing to play along.

If those poor poor dealers don't like haggling let them go with fixed pricing like Walmart.  Bet we'll never see that since there's far more dumbasses in this world willing to pay MSRP or damn close to it.  Then there's those with priorities so far out of wack that need to finance toys and will do/pay whatever just to get that instant gratification and the sales droids know it.  For every Busa that leaves for less than $10K there's probably 5 they get $17K for after selling price + financing.

I think it is great that you spend the time to work the system to your advantage, and that you pay cash.   That is the best/smartest route to take.

But;

All dealers don't "want to play the numbers game"   They are forced into playing the game because so many buyers don't give a rats azz if they are there tomorrow.  Dealers have to protect thier investment...they must make a PROFIT.  

Now...the comment about the dealer getting "17K after the financing etc..."    C'mon dude.   In a motorcycle store, the dealer is lucky if they get paid 150 bucks from the finance company to do the paperwork.  THATS IT.   The only place they have to make ends meet is profit on bikes, parts, accessories, and service.

If we are going to have a discussion about this type of thing, lets at least keep it real.

Ok...I'm done.   Rant over.

If dealers were hurting that bad the industry would have fixed pricing with a higher price tag. Walk into the dealership, there's the price tag on the bike...take it or leave it. And honestly I've NEVER seen a motorcycle dealership go out of business in my area. The same ones that were around when I was a little kid are still around today. Plus a few have expanded and built larger facilities.

Hiring and paying salesmen to play "let's make a deal" works otherwise they wouldn't be doing it for decades.
If they didn't do it that way they would be in competition with each other like Walmart vs. Target. If dealer A was selling a Busa for $9800, then dealer B 10 miles away would need to match or beat that price.
When I bought my '04 for $9725 OTD I'm sure they made a profit on it and ordered another the very same day from Suzuki to replace it on the showroom floor.

As far as financing, there's nothing way off about the $17K price. Go in with no or bad credit and see what the interest rate will be on a Suzuki credit card.
Just went and checked...........
17.9% standard rate
21.9 default rate.

Say you pay 12500.00 OTD for your Busa and put $2,000 as a down payment. You finance the remaining balance on your Suzuki credit card at 17.9% for 60 months. At $266 a month you're paying almost $18,000 for that bike! Make a late payment where they bump you up to 21.9% and you could be paying over $19,000. And I know some dealer cards will go past 21.9%.

And being a Suzuki credit card, I guarantee Suzuki is making a few $$$$ off it along with the dealer that sold the bike.

Oh and another thing that makes the credit card so tempting is that often full coverage isn't needed. I bet there's a few people out there making monthly payments on a bike they don't have anymore because it was stolen from their apartment complex.

 

[mjn]

Ok Turbo...I'm gonna try and hit the important items here...

First and foremost dude..this is not a flame.   Understand I have worked in this business my entire career.   Both autos and bikes, so (unlike some other topics.

.)  I really do know what I am talking about.

Turbo-Torch ·

If dealers were hurting that bad the industry would have fixed pricing with a higher price tag.  Walk into the dealership, there's the price tag on the bike...take it or leave it.  

It's been tried before.   It failed miserably.  The buying public (the majority of them) do not feel they get a decent deal if they cannot negotiate.   The "one price" program is, for the most part..done.

Turbo-Torch;

Hiring and paying salesmen to play "let's make a deal" works otherwise they wouldn't be doing it for decades.  
If they didn't do it that way they would be in competition with each other like Walmart vs. Target.  If dealer A was selling a Busa for $9800, then dealer B 10 miles away would need to match or beat that price.


Who else is going to show the customer the bike?  Salespeople are what make the ENTIRE world go around.

Nothing happens unless someone sells something.   Think about it.

Believe me, we are very much in competition like Target and Walmart.   Like Wag said earlier, it is a fine line we walk...we must make a proper return on our investment..yet the pricing must be such that the customer buys.   Every deal stands on its own.  If your perceved value in our product is less than we can realistically sell it for....you are free to go elsewhere and attempt to purchase it.   No hard feelings!

As far as your purchase of 9800 OTD.   I have no way of guaging what kind of deal that is..to me "out the door" includes tax and license.  I do know that cost on an '05 is somewhere around 9200 bucks.

Turbo-Torch;
As far as financing, there's nothing way off about the $17K price.  Go in with no or bad credit and see what the interest rate will be on a Suzuki credit card.
Just went and checked...........
17.9% standard rate
21.9 default rate.

Maybe I missunderstood your meaning earlier..the CUSTOMER will end up paying a ton for the bike in this scenario...yes.

$11,499.  MSRP(?)  if you paid full sticker...
+  988.91 sales tax (here in my area 8.6%)
+     76.25 license (once again, here)
$12,564.16   TOTAL price...or, to me..OTD.
-  2,000.00 cash down
$10.564.16 to finance.

now, if you really need that bike so bad you'll finance it.....and finance it at a 17.9% rate (revolving)...you would have a 60 month payment of $269.68.    By the end of 5 yrs, if you continued to pay that incredibly stupid intrest rate (many do!)  you would have paid a total of $18,180.80 for your bike.   Stupid?   Yes.   But no one is holding a gun to your head either.  Anyone with decent credit could have gone to thier credit union and done far better.

Turbo-Torch;
Make a late payment where they bump you up to 21.9% and you could be paying over $19,000.  And I know some dealer cards will go past 21.9%

Dam straight buddy.   It is the same everywhere.   If you can't pay your bills on time.  Thats your fault.  (not you specifically...ya know)

Turbo-Torch;
And being a Suzuki credit card, I guarantee Suzuki is making a few $$$$ off it along with the dealer that sold the bike.

I will reiterate what I said above one more time.   The dealer gets what is called a "flat" fee for doing the paperwork for the finance company (in this case, Suzuki motor credit)   Remember, it is the finance company that is taking the risk of wether you make your payments or not...not the dealer.   He is but the middle man..   Oh...and the middle man gets like $150.00 for sending the deal to the finance co.  

**edit** one thing to add here....if you choose one of the "special" deals from the manufacturer, the dealer gets nothing in the way of a flat fee. NOTHING.

Turbo-Torch;
Oh and another thing that makes the credit card so tempting is that often full coverage isn't needed.  I bet there's a few people out there making monthly payments on a bike they don't have anymore because it was stolen from their apartment complex.

You are 100% correct here.    Why would any sane individual risk that much?

?    I don't know either.   But plenty of folks sign up for that program.   Once again..is it stupid?   Yup.



Once again, my intent here is merely to educate.   No flame intended at all.   Missunderstanding of how our business works and the resulting hard feelings and name calling happens all the time.

I just felt compelled to set the record straight.

Is there such a thing as a "stealership"?   You bet.    But I'll wager that they are the minority in this business.   The rest of them are just trying to make an honest living.

One more thing to keep in mind... everyones "perception" of a good deal is different.  It is impossible for a dealer to know what constitutes a good deal in your mind unless you tell them.

Every dealership makes mistakes.  We are only as good as our people on a day to day basis.   Put yourself in thier shoes once in awhile....


Sorry about the freakin novel..

 

[mjn]

Ok...just caught this....and I've gotta add one more comment;


Turbo-Torch;

And honestly I've NEVER seen a motorcycle dealership go out of business in my area. The same ones that were around when I was a little kid are still around today. Plus a few have expanded and built larger facilities.


And this is a bad thing because.....?

?

I prefer to shop at a place that is successful. It typically means that;
A.) They must be doing something right...otherwise they'd be gone...or still in a little shack.
B.) If I am in need of a part...I need it now. The small shoe-string dealers don't have the $ to stock a ton of parts...the successful dealer most likely will. No...not always..but you've got a much better chance.

Besides, success can mean that I get to talk to the same parts guy every time...I get to buy my bike from the same salesperson each time... And, I am helping support my local economy by doing so.

It is a win-win.

 

[kawiboy11]

God damn, that's to much to read!

 

[Tufbusa]

Good Job MJN! I am amazed at the number of people that really don't understand the position of the dealership. Like the guy who went down the street to save a few bucks on his exhaust system. If I were him, I wouldn't be going back to my dealer and expecting any special treatment with an exhaust system mounted on the bike from the competition just down the street.

The proper way to have addressed that situation was to go to the competition and get a price in writing and return to the dealer and say, "Here's what I can buy this for at the hole in the wall down the street, what can you do for me"?

Building a good relationship with your dealer is vitally important. I have a wonderful relationship with the Suzuki Dealer here locally and they go way out of their way to take care of me. In return, I steer every new customer I find in their direction.

And, if the drive by busa owner bought his 06 LE OTD for $9200, then he bought it for far less than the dealer paid for it. MJN is correct, a standard busa, not the LE cost the dealer just over $9200 in 2006.

 

[Turbo-Torch]

(mjn @ Nov. 25 2006,17:57) Ok...just caught this....and I've gotta add one more comment;


Turbo-Torch;

And honestly I've NEVER seen a motorcycle dealership go out of business in my area.  The same ones that were around when I was a little kid are still around today.  Plus a few have expanded and built larger facilities.


And this is a bad thing because.....?

?

I prefer to shop at a place that is successful.   It typically means that;
A.)  They must be doing something right...otherwise they'd be gone...or still in a little shack.
B.)  If I am in need of a part...I need it now.   The small shoe-string dealers don't have the $ to stock a ton of parts...the successful dealer most likely will.   No...not always..but you've got a much better chance.

Besides, success can mean that I get to talk to the same parts guy every time...I get to buy my bike from the same salesperson each time...   And, I am helping support my local economy by doing so.

It is a win-win.

I never said it's bad. I think we pretty much agree on everything but are looking at it in different ways.

My point is they know what they are doing with the haggling system and the store owners aren't starving. Even the one crappy Honda dealer near me that charges exactly double for parts vs the other two Honda dealers isn't hurting and their showroom is always full.

Just as you said that I'm free to shop elsewhere if I don't like the price, they are free to turn me down if they don't like what I'm offering.

What gets me is the bleeding heart attitude many have towards what you pay for the bike decides what kind of service dept. the dealer has. Last time I checked every dealership has an hourly shop rate and charges markup on parts. Service departments make their own profit and if they aren't they need new managment. And when a bike returns under warranty the dealer is reimbursed by Suzuki so it's not like any money is coming out of the dealers pocket because they didn't make a $2,000 profit on a bike.

Going off topic now, but the one thing I have to ask is why do you feel OTD includes license and tax? What the license bureau charges me has nothing to do with what I paid my dealer. And the final outcome of what gets forked over to the license bureau (taxes and license) has to do with the state and county one lives in.
Also, say I bought my bike in August. The plates would cost about $20 bucks since I have to renew in September. If I bought my bike in September I'd have to renew for 12 months. My bike wouldn't be a better deal just because I bought it a month earlier.

Selling price of my '04 was $9154.72
The freight, prep, doc and temp. tag brought it up to about $9750. They made their money off of me on the BS prep and freight charges which I was more than happy to pay considering the final price. Plus I made them break it all down on the invoice so I only paid taxes on the $9154.72. I don't get the ego boost of saying I got out of paying those BS charges but in the end I didn't pay taxes on $600 bucks and nobody has to see the receipt but me.

 

[Tufbusa]

(Turbo-Torch @ Nov. 26 2006,10:58) Going off topic now, but the one thing I have to ask is why do you feel OTD includes license and tax?  

Because "OTD" price is self explanitory. Out the Door means exactly what you paid out the door, including all taxes, license etc. Which, has very little meaning whatsoever since no two states are the same OTD.

I have never understood why folks post up OTD prices. When my dealer gives me a price OTD it includes everyting including tax and license.

A much better example of what you actually paid is "Price plus tax & License" The price you pay the dealer should reflect the base price plus any shipping and set up fees.

 

[mjn]

^what Tufbusa said Turbo.... to get the bike "out the door" you need to payfor the bike, the tags, and the tax. Otherwise ya don't get to take it!

 

[Turbo-Torch]

The dealer doesn't give me a license plate unless you're talking about a $9.00 temp cardboard plate.

If I buy one of those $9500 dollar Busas out of Ohio I pay them $9500 and out the door I go. The dealer can't charge taxes since Ohio wouldn't be getting a dime of those taxes. When I go to get the plates at the LICENSE BUREAU here in Indiana I pay them for the plates along with the Indiana taxes.
If I got a loan for that $9500 would the bank make out a separate loan check made payable to the Indiana BMV? Do we also include gas, oil and insurance too? If so for how long?

 

[Suijuris]

9k for an 06

? geez- dealer invoice is +/- 9300. I did good too though-- 10, 541 out the door.

 

[mjn]

(Turbo-Torch @ Nov. 26 2006,01:28) The dealer doesn't give me a license plate unless you're talking about a $9.00 temp cardboard plate.

If I buy one of those $9500 dollar Busas out of Ohio I pay them $9500 and out the door I go.  The dealer can't charge taxes since Ohio wouldn't be getting a dime of those taxes.  When I go to get the plates at the LICENSE BUREAU here in Indiana I pay them for the plates along with the Indiana taxes.
If I got a loan for that $9500 would the bank make out a separate loan check made payable to the Indiana BMV?  Do we also include gas, oil and insurance too?  If so for how long?

Like Tufbusa said Turbo...every state works it differently..

Here in Wa state, when you buy a car or bike, the dealership is responsible for collecting the sales tax (8.6% of the sale price here in Kennewick) and the cost to license the vehicle. They then are responsible to forward that sales tax and lic fee on to the state. Also, in Wa state, the dealer gets to pay B&O tax. ie' "business and occupational tax". This is not something that is included in what the customer pays..it is just another way for our state government to get into the dealers pocket. You get a temp tag that you use for a couple 3 weeks, then you run back to the dealer and pick up your plates. In this state, auto/bike/RV dealers are the single biggest contributor of sales tax revenue. All of it, of course, paid by the consumer.

I know it is basically the same in Idaho, just less tax. Oregon has no sales tax (yet) but the cost to lic the vehicle is a bit more. Not sure about any other state..

 

[mopar250]

I figured this would be a good thread to tell my story about my dealer, and how (at least in my mind) they did themselfs in...
So I buy my new Limited busa in may. Long story short I price around and pick my dealer in Illinois about 35 miles from my home. I have always delt with a little dealer in Indiana, but they don't sell the brand and I've moved about 100 miles away from them or more. I actually picked the dealer in IL. because the people were nice to me and my girlfriend when we walked in. The other dealers in the area kind of acted like they were doing me a favor letting me think about buying from them. So I make my deal, buy my bike, drive home happy. I get home and realize I don't have an owners manual. No biggie. We both forgot about it. I call my salesman, "yea I got one buddy" he says. I asked if he was sure as it's not just next door to my house, says yea buddy. So, I ride over next day I have off. Not a single owners manual to be found in the building (including off his 5 other busas on the floor). Says I'll send you one buddy. 1 month goes buy, nothing. I call him back. I just put on in the mail buddy. Another 2 weeks. Call store manager. Sorry, i'll get one in the mail for you. 3 weeks. I stop by the dealer. Still not one in the mail or on a new bike. At this point,in the showroom, i'm mad. very mad. if someone screws up, just tell me, but DO NOT lie to me. So I let my feelings known to my salesman and the manager. Guess what? 1 month later no owners manual! BUT, they did get the comment card from the dealer and from Suzuki out to me. Wheew, I was hoping they would send me a comment card. I've pretty much gave up now, but I wish they would know how much they screwed up buy not sending me a 5 doller owners manual. I guess I'll just go out to my garage and work on my 3 four wheelers, 2 snowmobiles, 2 motorcycles and Kawasaki mule and try and forget. Wonder where I can get parts?

 

[mjn]

(mopar250 @ Nov. 27 2006,22:10) I figured this would be a good thread to tell my story about my dealer, and how (at least in my mind) they did themselfs in...
So I buy my new Limited busa in may. Long story short I price around and pick my dealer in Illinois about 35 miles from my home. I have always delt with a little dealer in Indiana, but they don't sell the brand and I've moved about 100 miles away from them or more. I actually picked the dealer in IL. because the people were nice to me and my girlfriend when we walked in. The other dealers in the area kind of acted like they were doing me a favor letting me think about buying from them. So I make my deal, buy my bike, drive home happy. I get home and realize I don't have an owners manual. No biggie. We both forgot about it. I call my salesman, "yea I got one buddy" he says. I asked if he was sure as it's not just next door to my house, says yea buddy. So, I ride over next day I have off. Not a single owners manual to be found in the building (including off his 5 other busas on the floor). Says I'll send you one buddy. 1 month goes buy, nothing. I call him back. I just put on in the mail buddy. Another 2 weeks. Call store manager. Sorry, i'll get one in the mail for you. 3 weeks. I stop by the dealer. Still not one in the mail or on a new bike. At this point,in the showroom, i'm mad. very mad. if someone screws up, just tell me, but DO NOT lie to me. So I let my feelings known to my salesman and the manager. Guess what? 1 month later no owners manual! BUT, they did get the comment card from the dealer and from Suzuki out to me. Wheew, I was hoping they would send me a comment card. I've pretty much gave up now, but I wish they would know how much they screwed up buy not sending me a 5 doller owners manual. I guess I'll just go out to my garage and work on my 3 four wheelers, 2 snowmobiles, 2 motorcycles and Kawasaki mule and try and forget. Wonder where I can get parts?

That sucks man... Follow up after the sale is a problem every sales department struggles with. It suprises me that you still got nothing resolved with the sales manager..

What is amazing is every bike comes with a manual. Even if it happens to show up without, all they have to do is order one. Real tough. Maybe next time you are in the area, you show the sales manager how difficult it is to get a manual.... take him over to the parts counter and have him order one for you right there.

Jeez. For something this simple, I can't blame you for being frustrated... Ever think of contacting the owner??? I'll bet he'd be interested to hear how his staff botched such a simple task....

 

[mopar250]

Ya know, that's my biggest hangup in this whole deal. Every bike comes with an owners manual. Sooooo, does that mean everyone that buys a bike there does not get one? I have a hard time believing that. Like I said, I think its almost funny now but let me tell ya, I was VERY mad for quite a while there. I guess it's a good thing this site is here so I can find out what I need to know.

 

[GoldenChild]

Good Post...I sell OEM stuff all the time at well below dealership prices and people still say it's high,GO FIGURE...I guess today we worry more about the profit someone makes and not about how they stay in business....Folks think about it next time some shop gives you a hell of a deal(say thanks,it keeps us little guys around)...Good Luck to all....

 

[bitabur]

mjn, you work for a dealership in WA? You sound pretty familiar with the process.

If so, which one?

 

[BusaCruise]

(mjn @ Nov. 25 2006,14:31) PROFIT IS NOT A DIRTY WORD FOLKS!

depends on how you look at it..."profit" equals greed and that in it's self is a sin.

personally I would rather that ALL money be abolished.
Too many people get out of bed everyday just to exsert their greed on others and the rest get up to meet the greed OF others.

How many do something because they have a talent would keep doing it without compensation?