I don't know how it all works either, B B, but I do know I've always been able to buy my cars for just slightly over invoice...I know they get hold backs, etc, so they still make money. My last car was $88 over invoice.
I don't know how the bike dealerships work, but I KNOW I can go into any other bike dealership, other than a HD, and get a bike for UNDER MSRP. If they can do it and stay in business, why the hell can't the HD dealers? I'm not a business man, but I'd rather sell 5 bikes a month for 1 or 2K under than 1 at MSRP. I guess some of these guys have made so much money over the past 15 years or so, they aren't worried about it, but dipping into reserves to meet payroll is not my idea of good business management.
There's no reason in this world why a HD should cost what it does, other than they have known for years that people will pay it. Those days are ending, IMO.
believe me if you ran an auto dealership and they only gave a limited amount of cars you would maximize your profit on each one....
The auto industry runs with profit centers in the back and used car lots. There is very little profit made on the front end because the market will not support it. The Dealers have access to unlimited amount of cars and they make 2% - 3% on the back end. Try running a business on that margin, cannot be done unless other profit centers are going strong. They only time the dealers can make their money when demand outstrips supply
special cars or high demand units.
look at Honda Goldwings they have an unlimited supply and cannot give away a $22,000.00 motorcycle for $19,000.00 (which is below normal dealer cost)
only recently has the Harley supply exceeded demand and the market is changing because of that.
Dealers are having to come to grips with the possibility of losing a major profit center because of supply exceeding demand. Factory has been forced to give dealers incentives which seldom has happened in the past. Dealers Make 13% -19% on bikes and this is major money for them. Harley has no back money or VR rebates.
much more money in Harley motorcycles sales than Chevrolet Auto sales. BMW you can make money on
The bottom line it is a open market and if you want stabilize retail pricing you have to under shoot demand.