Google Jewish business ethics. Also note I used the word "curious" in my post.
Motorcycle dealers make no money from bike?
- Thread starter cbcanada
- Start date
Google Jewish business ethics. Also note I used the word "curious" in my post.
We may be talking about different parts of the P&L here when we're talking "margins". Is it the "invoice margin" ie. the difference between what you sell it for & the cost you paid for it (incl freight)?
Or is it what's left over after ALL costs are accounted for from labour to overheads?
I can't speak for bikes or cars ... but in retail clothing, yes the selling price is typically double what you paid for it. Is that what's left over at the end of the day? Absolutely not ... in fact much less.
I suspect that bike makers are making a ton of profit on their high end bikes costing in the upper teens and above. When you can buy a Honda Civic or similar for the same or less than you're paying for a bike you know something ain't adding up.
A bike has waay less materials, less labour, less overhead, less computer systems, less safety testing, on and on ...
Another thing that people often forget about when they see the "invoice pricing" is that does NOT include rebates (known as holdbacks in the auto industry) that the dealers get after the fact... it's no different than you buying a product at Wal-Mart and submitting the rebate card in the mail ... later on you get a cheque for the rebate. Same exact thing with auto makers and I'm sure the bike makers.
Or is it what's left over after ALL costs are accounted for from labour to overheads?
I can't speak for bikes or cars ... but in retail clothing, yes the selling price is typically double what you paid for it. Is that what's left over at the end of the day? Absolutely not ... in fact much less.
I suspect that bike makers are making a ton of profit on their high end bikes costing in the upper teens and above. When you can buy a Honda Civic or similar for the same or less than you're paying for a bike you know something ain't adding up.
A bike has waay less materials, less labour, less overhead, less computer systems, less safety testing, on and on ...
Another thing that people often forget about when they see the "invoice pricing" is that does NOT include rebates (known as holdbacks in the auto industry) that the dealers get after the fact... it's no different than you buying a product at Wal-Mart and submitting the rebate card in the mail ... later on you get a cheque for the rebate. Same exact thing with auto makers and I'm sure the bike makers.
Roadghost
Well-known member
The term economists use for what you're calling the "Jewish type philosophy" is in fact called "profit maximization". A novel concept in which manufacturers will sell at a level the market can bear. When selling a product, they calculate how high of a price they can charge before people stop buying and sales fall, or "the point of diminishing returns". Economists also measure a market for something called "elasticity" or to be blunt: how desperately people want a product. A non-elastic market would be gasoline, since they can charge almost any price and people will still have to buy. Motorcycles are a high-elastic market, since although some people want a motorcycle, they don't need one.
Corporations are always trying to maximize profits, so they are driven to artificially lessen "elasticity". For example, they desperately want to corner the internet so they can charge money for it. Cartels are the ultimate desire of corporations, that way they can lower elasticity and charge higher profits. I learned all that in economics class years ago. A 100% markup minimum is the retailer's ideal price. They often sell for more or less profit depending on market elasticity.
Profit maximization or extraction as we also call it applies to 99.9% of businesses everyday, all day. Its why we are there. Yes somewhere somebody is bringing tablets to Africa to speed education as a not for profit, but even a not for profit needs to cover costs, and make a small profit.....
Marketing types loose sleep over where to position a product in the market
If you worked with me and launched the "we make enough money" conversation, you wont last long.
Marketing types loose sleep over where to position a product in the market
If you worked with me and launched the "we make enough money" conversation, you wont last long.
I'm sorry to hear that. I would understand it if I worked for you, then that would be your right. So you would sell a 500ml bottle of spring water to a thirsty pygmy for $100 if you could? Check.
I've always enjoyed the spin , lets make this a humanitarian thing. I encounter so many pygmies in my daily life.
If a thirsty pygmy had $100, he could buy a water pump from one of the Christian charities for his village, and put a down payment on a goat. He wouldn't need my water.
And they aren't pygmy anymore, they are little people, show some compassion.
If a thirsty pygmy had $100, he could buy a water pump from one of the Christian charities for his village, and put a down payment on a goat. He wouldn't need my water.
And they aren't pygmy anymore, they are little people, show some compassion.
I worked for years for a high end industrial commercial HVAC contractor. I learned early on we sold more sizzle than steak. Funny, we had around 15 techs at any given time and the boss was hyper vigilant to not get ripped off but the customer, a full on raping every chance. Oh well and whatever. Have a nice life.
Found this sign in the ditch somewhere in hamilton
And smaller production volumes to spread out the engineering and tooling costs ... by a lot.
How much do you think Kawasaki spent on engineering and tooling for the H2, for example? We know that they have patents dating back to 2009 for that design. It's been in design, engineering, and validation for a long time. They've built somewhere near 2000 - 2500 of them over two years. Even at the premium build-to-order price tag ... I doubt that this was a money-making vehicle program, because of the engineering and tooling costs. In the automotive world, it's pretty easy to spend $1 billion on engineering and tooling for a new vehicle program. If the bike is a TENTH of that, it's a money-loser on the face of it even if the production cost is 0. Granted, this was a flagship, a showcase ... and something to keep the engineers busy during the recession/depression (which is actually why I suspect the bike exists).
Self-employed here, in a service business. I am much less concerned with extracting every possible penny out of every possible job, than with making sure the customer calls me back next month for the next job, and the month after that, and next year, and so on. I have some customers that I've been dealing with for 15 years ...
I'd be surprised if the range for everything was even 50% as that's high. Unless they're buying old clearance stock, it's definitely not 100%
Suppose you had, say, a popular HIV medication selling for $13.50. Would you raise the price by 5500% to $750.00 if you were able?
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I think you'd be surprised. In my line of work I often see the "secret" paperwork that lists wholesale on a lot of the items I transport, and trust me, 100% isn't unheard of. It's not even rare. A lot of items are far more, actually.
Suppose you had, say, a popular HIV medication selling for $13.50. Would you raise the price by 5500% to $750.00 if you were able?
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I see what you did there.
I know this to be true for many products, but for motorcycle gear and accessories in Canada, most of the stuff comes from 2 or 3 big distributors with tiered pricing based on how much volume a dealer moves. 100% is indeed unheard of unless its old/clearance stuff. Margins are much tighter than that.
I regularly deliver product for Polaris industries (ATV's and snowmobiles accessories mainly) and know their markups are significant, even for small dealers - it's their bread and butter. I can't immagine bike accessories are that much lower.
If the margins are as tight as everyone suggests here on both bikes themselves and accessories, logic would dictate that huge glitzy stores like most HD dealers and GP, Royal etc etc wouldn't be able to survive...if you're only making $5 here and $10 there there's no way a place like Royal Distributing (which is 99.9% accessories, basically) would be able to cover the overhead of the building, the stock, and all the staff.
I would be surprised as I do work at a fairly large dealership in the parts department.
Fair enough. Suffice to say not everything is 100%, but we're not talking 5-10% either, are we?
My wife worked at a dealership for a few years and the markup on units is nowhere near 100%.
Places like Royal servive because of volume. They buy a ton of it from their distributors which makes their initial purchase price less allowing them to sell for fair price and still make money. This is also why Royal doesn't stock a lot of high end product because it doesn't move like the cheaper stuff. Nobody wants to spend money.
Places like Royal servive because of volume. They buy a ton of it from their distributors which makes their initial purchase price less allowing them to sell for fair price and still make money. This is also why Royal doesn't stock a lot of high end product because it doesn't move like the cheaper stuff. Nobody wants to spend money.
