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Topic: Dealer Mark-Up percentage

Posted By: TiffinGuy on 08/15/07 01:26pm

It is my understanding that at least some manufacturers produce and post in their MHs a sheet containing the MSRP. Is there any generally accepted percentage BELOW the posted MSRP that the dealer actually pays the manufacturer for the MH?

If the MSRP is $200,000, for example, would the dealer actually pay $120,000? $130,000? $140,000?

Tried running a search prior to posting and came up with nothing. My apologies if this has been widely discussed elsewhere. If it has been widely discussed before, a link to that discussion would be greatly appreciated.

Thanks,

Bill


Bill & Ann
2007 Tiffin Phaeton 40QDH
2007 Jeep Liberty
Our Cat Rescue Gang, "The Traveling Wilburys": Sadie, Aimee, Cody, and Wylie



Posted By: Ed C on 08/15/07 01:52pm

A dealer showwed me the invoice sheet for Winnebago on the Jounery and Adventurer the invoice was 71.3% +- of the list price.


Ed/Jeanie & Slade the GSD
2010 Journey 40L/ Sierra Crew


Posted By: hwybnb on 08/15/07 02:02pm

My most recent survey showed that dealer cost on a Class A was 70% to 72% of MSRP.


Posted By: MasterBoondocker on 08/15/07 02:17pm

OntMontana wrote:



If the MSRP is $200,000, for example, would the dealer actually pay $120,000? $130,000? $140,000?



You really think the POTENTIAL profit for a dealer would be 80k$ on a 120k$ "investment" ?

Ahhhh ... but some here might suggest that all most dealers make is 1-7% !! .... now THAT will be some "fuzzy-MATH" !


Posted By: TiffinGuy on 08/15/07 02:07pm

Many thanks, Ed.

BTW, used to live in Wallkill (when we were stationed at Stewart AFB) and Cape Cod (when we were stationed at Otis AFB). The world is full of coincidence!

Bill


Posted By: TiffinGuy on 08/15/07 02:10pm

Thanks hwybnb ...

Amazing picture in your profile!

Bill


Posted By: Fishinghat on 08/15/07 11:22pm

While a 40% markup is an excellent starting point, factories give dealers incentives, credits and free flooring (financing) that can add quite a bit to the dealer's profit. But, dealers also have expenses that can eat up all their profit. Flooring is probably the most expensive. That's the interest on the loan to put all those coaches on the lot for you to walk thru. JMHO


Holiday Rambler Navigator DP, Hummer, and Honda VT1100C Shadow



Posted By: MasterBoondocker on 08/15/07 02:22pm

hwybnb wrote:

My most recent survey showed that dealer cost on a Class A was 70% to 72% of MSRP.


And what does your survey show what people actually paid for that MH ?

Some here have posted that the typical every-day discount is 25-30% off of MSRP.

So the dealer LOSES money on each and every sale ? .... on a 120k$ "investment" ??...... I don't think that the owners of these huge RV businesses are that BAD with their "investments" !!


Posted By: SCHARLEY on 08/15/07 02:50pm

hwybnb wrote:

My most recent survey showed that dealer cost on a Class A was 70% to 72% of MSRP.



And just whom did you take this "survey" from? How many manufacturers responded to your survey? How many dealers? How many shoppers who have been shown this or that document to support a sale?


SCHARLEY


Posted By: raw738 on 08/15/07 08:59pm

flat out excessive. these coaches are out of priced from both the dealer and the manufacturer


Posted By: chastho on 08/15/07 03:52pm

In the past,5 or 6 years ago, the dealer had a 40% mark up.Things have changed a lot but I would bet the mark up is still close to 40%. I wouldn't put too much faith in a invoice the dealer shows you.


Posted By: TiffinGuy on 08/15/07 03:09pm

MasterBoondocker wrote:

OntMontana wrote:



If the MSRP is $200,000, for example, would the dealer actually pay $120,000? $130,000? $140,000?



You really think the POTENTIAL profit for a dealer would be 80k$ on a 120k$ "investment" ?

Ahhhh ... but some here might suggest that all most dealers make is 1-7% !! .... now THAT will be some "fuzzy-MATH" !


The figures I posted were only examples. I asked the question because I do not know.

If the figure of 70% of MSRP is correct, then a dealer would have paid $140,000 for a unit with MSRP of $200,000 (a mark-up of 42.8% of dealer price). The dealer could then sell the unit with a 25% discount on the MSRP and still clear $10,000 (which is 7% on the original $140,000 investment) plus whatever "dealer prep costs", finance company kickbacks, etc. are added on.

I have no idea whether that scenario is even remotely close to reality but the 70% - 72% figure discussed above makes sense to me.

Bill


Posted By: fimk on 08/15/07 04:36pm

Is the mark-up or mark down the same for the different manufacturers?
We bought ours in Feb/March time frame working two different dealers on the same make and model and bought at 33% off list from the dealer with the better service record.


Ken and Cindy Frericks
2 Shiba Inus: Sox and Ditka
2007 Sportscoach Cross Country 382DS
2004 Jeep Wrangler Unlimited
Come visit us at...
www.frerxadventures.com


Posted By: tomlang on 08/15/07 02:35pm

All I know for sure is ... you go to one of those big RV shows, like the one in Pomona California every October, and the rigs all have two prices. The MSRP and the "show special" price. They are not all that close together. There is definitley a lot of wiggle room in the price.


Tom and Lynne
Tom is an Electronics Engineer, Lynne a retired teacher.
2003 Foretravel 38' U295



Posted By: Sully2 on 08/16/07 07:15am

SCHARLEY wrote:

raw738 wrote:

flat out excessive. these coaches are out of priced from both the dealer and the manufacturer


Well they seem to be selling them just fine, why would they consider lowering the margins?

To sell more coaches....BUT..normally they cant GET anymore coaches!! ( And if they could..they couldnt service them...)


2000 Country Coach Allure; Cummins ISC 330 HP; 71/2 - 8 MPG regardless
2002 Jeep Liberty



Posted By: Sully2 on 08/16/07 07:19am

Ed C wrote:

A dealer showwed me the invoice sheet for Winnebago on the Jounery and Adventurer the invoice was 71.3% +- of the list price.

DEALERS INVOICE on a motorhome ( just as on an auto) doesnt mean JACK SQUAT! You can have identical coaches..brand and options..located at 2 different dealerships and have different MSRP sheets on them!

( Same thing with cars)


Posted By: Sully2 on 08/16/07 07:21am

Fishinghat wrote:

While a 40% markup is an excellent starting point, factories give dealers incentives, credits and free flooring (financing) that can add quite a bit to the dealer's profit. But, dealers also have expenses that can eat up all their profit. Flooring is probably the most expensive. That's the interest on the loan to put all those coaches on the lot for you to walk thru. JMHO

You got it! Ive never been able to find out of RV dealers get a "kick-back" at the end of the year like auto dealers do on cars..etc.??? Typically something like 2-31/2% on each item..??


Posted By: JALLEN4 on 08/16/07 09:12am

Well it didn't take long in this thread to get the markup to 50%. Do I hear 75%?

There are so many misconceptions involved in these discussions that it becomes humorous. Yes some manufacturers do have "holdback" programs the same as auto manufacturers. That was a cornerstone of the recent Monaco franchise agreement but it also reduced the markup on the unit originally.

The bottom line, it is actually not anyones business what they pay for the unit. The consumer should be concerned about what they can buy it for, not what the dealer is making. No one really knows the builder's cost when a home is sold, cost of the suit you bought last, or the grocers invoice for the carrots you buy. All this discussion is fruitless in the long run. If you actually know the cost of the unit there are not many who could then tell you what the dealer should gross on the sale to have a reasonable return on their investment.

At the end of the day, dealers in the new car business average about 2% net profit on total sales. Hardly a high profit margin business. RV dealer margins fluctuate greatly depending on total sales volume but the number will be 3-6% net on sales as an average. Those numbers take into consideration all sources of revenue; new units, used units, parts, service, and financing. If a RV dealer sells 20 million a year total sales, he will make on average $600,000 to $1,200,000 a year net before taxes. He will have millions of dollars invested and be lucky to take home 30% of that.


Posted By: JALLEN4 on 08/16/07 09:18am

Sully2 wrote:

Ed C wrote:

A dealer showwed me the invoice sheet for Winnebago on the Jounery and Adventurer the invoice was 71.3% +- of the list price.

DEALERS INVOICE on a motorhome ( just as on an auto) doesnt mean JACK SQUAT! You can have identical coaches..brand and options..located at 2 different dealerships and have different MSRP sheets on them!

( Same thing with cars)


Sully, I agree on RV's as Monroney labels are not required by law. You are wrong on cars. The Monroney label, sticker, will always show the same MSRP for vehicles with the same equipment. Freight has even been equalized and will be the same in Florida as California. The only exception would be when cars were produced at different times and there had been a price increase in the interim.


Posted By: JALLEN4 on 08/16/07 01:43pm

ralphr wrote:

The dealers do not "buy" the units and then "re-sell" them to the public. That is what they want you to beleive, the only time they would have to buy the inventory is if they did not sell them. The manufacturers determine what models and who many will be shown at the dealers, of course a dealer with volunme sales will be able to show more models than a dealer who does not sell very many units. The name of the game is to move as many units as possible. Price to high and the units sit on the lots and the dealer looses insentaives from the manufacurers, to low and they do not make money and go out of business.


That statement is totally erroneus. Dealers do "buy" the units. They are not on consignment of some type. The manufacturers have an entire staff of salespeople on the road encouraging dealers to buy and stock more units. Vehicles are invoiced and paid for before leaving the factory. In most cases they are on a dealers floorplan arranged through a bank or national lender. In a few cases they are paid for in cash. I have been doing this for forty years and have yet to be given the option to send one back! Why do you think dealers have new 06's still sitting on the lot?

In years past some obscure RV manufacturers and a couple of auto manufacturers did a consignment deal that lasted for a short time. Nothing that anyone actually wanted to buy and thus the desperate measure.


Posted By: OleRVer on 08/16/07 08:35am

Ahhhh...the ever know all about RV pricing.....there is no clear answer at all because not all manufacturers have the same markup or coupons or rebates or backends or squat.....they can pay different prices at different times of the year, can get bargains that other dealers have passed on...etc. etc...I once had a customer tell me $2000 was enough profit on a $250,000 motorhome. Well, it cost more than that to have it sitting on the lot! Pick out the coach your wife LOVES and get your 20-25% off the FACTORY msrp ( use caution there ) and hit the road and enjoy life and never look back....just the humble opinion of an anguished salesman....


Posted By: topflite51 on 08/16/07 07:55am

Base markup probably 40%, start adding on the options and you are soon looking at 50% overall. Take for example: full body paint, tile floors and granite counters.


David
Just rolling along enjoying life
w/F53 Southwind towing a 87 Samurai or 01 Grand Vitara looking to golf or fish
Simply Despicable
Any errors are a result of CRS.


Posted By: alcolby on 08/16/07 01:46pm

Topflite, I agree there is a different markup on options vs. standard equipment. The dealer, when figuring in the discount lumps them all together creating a false number. In reality the dealer will get around 50% off list on the options, a lesser discount on the basic coach, 40% seems realistic. When I try to guess at what a dealer actually pays for the coach, I separate the options and apply the 50% for them, and arrive at [at least, I think] a more accurite number. Al C. _________________________________________________________________ [quote=topflite51]Base markup probably 40%, start adding on the options and you are soon looking at 50% overall. Take for example: full body paint, tile floors and granite counters.[/quote]

Note: Due to invalid formatting, all formatting has been ignored.


Posted By: Nomadac on 08/16/07 12:16pm

Amen to JALLEN4's comments. Most of what I read on previous posts on this subject are purely conjecture or wishful thinking totally lacking in actual facts. Make your best offer and if accepted, enjoy your purchase.


Arnie
2003 Travel Supreme MH
38KSO1 Cummins ISC 350HP
2004 Honda Pilot w/SMI Air Force One Brake Sys.
1963 Pontiac Grand Prix 20' Enclosed Car Trailer


Posted By: ralphr on 08/16/07 01:18pm

The dealers do not "buy" the units and then "re-sell" them to the public. That is what they want you to beleive, the only time they would have to buy the inventory is if they did not sell them. The manufacturers determine what models and who many will be shown at the dealers, of course a dealer with volunme sales will be able to show more models than a dealer who does not sell very many units. The name of the game is to move as many units as possible. Price to high and the units sit on the lots and the dealer looses insentaives from the manufacurers, to low and they do not make money and go out of business.


2006 Cross Country SE
2003 Jeep wrangler toad
2006 Jaguar x type awd (no toad)



Posted By: SCHARLEY on 08/16/07 05:58am

raw738 wrote:

flat out excessive. these coaches are out of priced from both the dealer and the manufacturer


Well they seem to be selling them just fine, why would they consider lowering the margins?


Posted By: chastho on 08/16/07 07:44am

Sully2 wrote:

Fishinghat wrote:

While a 40% markup is an excellent starting point, factories give dealers incentives, credits and free flooring (financing) that can add quite a bit to the dealer's profit. But, dealers also have expenses that can eat up all their profit. Flooring is probably the most expensive. That's the interest on the loan to put all those coaches on the lot for you to walk thru. JMHO

You got it! Ive never been able to find out of RV dealers get a "kick-back" at the end of the year like auto dealers do on cars..etc.??? Typically something like 2-31/2% on each item..??
I did learn from a Tiffin dealer with a 07 that he gets a discount coupon from the factory that he can use to replace the 07 with a 08. It must be the same model. But he didn't say how much discount he got.


Posted By: TiffinGuy on 08/16/07 08:49am

OleRVer wrote:

Ahhhh...the ever know all about RV pricing.....there is no clear answer at all because not all manufacturers have the same markup or coupons or rebates or backends or squat.....they can pay different prices at different times of the year, can get bargains that other dealers have passed on...etc. etc...I once had a customer tell me $2000 was enough profit on a $250,000 motorhome. Well, it cost more than that to have it sitting on the lot! Pick out the coach your wife LOVES and get your 20-25% off the FACTORY msrp ( use caution there ) and hit the road and enjoy life and never look back....just the humble opinion of an anguished salesman....


David, I think you are right on the money.

Bill


Posted By: TiffinGuy on 08/16/07 01:34pm

I would like to apologize to everyone for starting this thread. I actually received the information I was seeking several pages ago. I had no intention of starting a prolonged debate.

Bill


Posted By: PAQ'in on 08/16/07 12:27pm

MasterBoondocker wrote:

hwybnb wrote:

My most recent survey showed that dealer cost on a Class A was 70% to 72% of MSRP.


And what does your survey show what people actually paid for that MH ?

Some here have posted that the typical every-day discount is 25-30% off of MSRP.

So the dealer LOSES money on each and every sale ? .... on a 120k$ "investment" ??...... I don't think that the owners of these huge RV businesses are that BAD with their "investments" !!
Yeah, I agree. Mine came out to 26% off the actual sticker, so I would question the percent as well.


Posted By: Jeff Regan on 08/17/07 05:47pm

I've never owned an RV dealership, but I did work with the owners of a couple of
them for a few years as well as several GM's and have read a lot of data about dealership financials in RV Business Magazine. The average RV dealership makes about a 1-3% net profit. Many can't do that and don't last.

The fact is, when buyers are getting a 25% or higher discount on a new motorhome, that only leaves a few percentage points of gross profit in the deal.
Then flooring, advertising, commissions, the cost of the land/buildings, employee salaries, insurance, benefits, utilities, all those expenses that most businesses have to pay to keep the doors open, takes a big bite out of those few percentage points.

Obviously dealers have other means to make a profit; service, parts, extended warranties, and the sale of used coaches almost always make more money than new ones. Still, the business is extremely capital intensive and risky for the typical net profit percentage of total revenue, and that's if the dealership is managed well and the sales climate is good, as well as the location and brands represented and overhead kept as low as possible. All these things have to be in place to have a chance of long term survival, nevermind success.

What I saw as an RV salesperson is gross profit on new coach deals going down
over time and my having to rely on the manufacturer increasingly for spiffs instead of the commission levels I was used to previously. Of course, when a manufacturer pays larger spiffs to sales people, the buyer ends up paying for it in the cost of the coach--so one way or the other, the customer pays. The last
year I sold coaches, 30% of my income was from manufacturer spiffs. This was
very different from just a couple years prior, when any compensation from a manufacturer wasn't really counted on.

Jeff Regan
2000 Dutch Star


Posted By: Sully2 on 08/17/07 06:02pm

Jeff Regan wrote:

I've never owned an RV dealership, but I did work with the owners of a couple of them for a few years as well as several GM's and have read a lot of data about dealership financials in RV Business Magazine. The average RV dealership makes about a 1-3% net profit. Many can't do that and don't last.
Jeff Regan
2000 Dutch Star


Ive never owned nor had any desire to, any sort of "dealership"..but I doubt that percentage VERY much. I can get FOUR PERCENT just buying STOCK and recieving the DIVIDENDS..let alone any appreciation on the stock.

Why would anyone invest 1..2..3..5 million in an RV dealership with the POTIENTAL of going BUST

And besides..thiw whole thread started with the question about dealer MARKUP..and has been contorted into "NET dealer profit"...etc..etc. About as far from the thread opening as replying about the health of BATMAN!!


Posted By: JALLEN4 on 08/16/07 02:48pm

ralphr wrote:

To JALLEN4, did you ever purchase a brand new RV? If you did you will notice that the "title" is transfered from the manufacturer to you, or most likely to your bank who holds it until the loan is paid off. If the dealer purchased the RV from the manufactuer then the title would be transfered from the dealer to you. Since it is from the manufactuer not the dealer than title never transfered to the dealer. Why you ask? It is because the dealer never "purchased" the RV from the manufacturer!! Don't take my word for it check your titles or go out and purchase a new RV and see where the title comes from!


Yes I have. In fact I am a dealer, have been for forty years, and I am fairly conversant with the process. A new motor vehicle is transferred from the manufacturer to the dealer by means of a Manufacturers Statement of Origin. This is submitted to the State when sold to the consumer and the state creates a title in the consumers name. The selling dealer will be shown on every original title in all of the states I have done business in. My motor home, purchased new from an RV dealer, clearly shows the selling dealer as the transferor.


Posted By: JALLEN4 on 08/16/07 02:53pm

Net profit is derived from gross profit minus expenses. That is what you pay taxes on and is what you have made at the end of your fiscal year. If you sell a unit for $100,000 and paid $80,000 for it, that does not mean you "made" $20,000. Out of that $20,000 comes expenses such as commissions, rent, heat, advertising, phones, and a hundred other daily expenses. No "fuzzy math" just normal business facts.

* This post was edited 08/17/07 06:38pm by an administrator/moderator *


Posted By: JALLEN4 on 08/16/07 02:55pm

pipermike wrote:

What I found out is that the manufactures give the dealers a year to move the inventory before they have to pay the manufacture. So find one that is close to the year (since date of manufacture on label) and wheel and deal. Dealers don't stay in business if they lose money.


That is just so wrong. Whoever told you that one pulled it from their nether regions. Must have been trying to convince you what a great deal you were getting on a left over unit!


Posted By: JALLEN4 on 08/16/07 06:50pm

MasterBoondocker wrote:

JALLEN4 wrote:

MasterBoondocker wrote:

JALLEN4 wrote:



There are so many misconceptions involved in these discussions that it becomes humorous.


At the end of the day, dealers in the new car business average about 2% net profit on total sales.



Now YOU are being VERY humorous !

"Net profit" ? .... how do you figure and describe that ? .... and NO "fuzzy MATH" ... PLEASE ! ...


Net profit is derived from gross profit minus expenses. That is what you pay taxes on and is what you have made at the end of your fiscal year. If you sell a unit for $100,000 and paid $80,000 for it, that does not mean you "made" $20,000. Out of that $20,000 comes expenses such as commissions, rent, heat, advertising, phones, and a hundred other daily expenses. No "fuzzy math" just normal business facts.



KIND of like the fuzzy-math on a triple-NET leasing of a building ? .. !!

So you are going to try and have us all believe that ALL a dealer is making is 2% on gross sales ?

Now THIS is a business person that has made a MULTI-million dollar investment ........ WHERE he/she could see a return almost TWICE that in a simple savings account ?

J4 ....yes - I was born at NIGHT ... but not LAST nite !


Its called leverage. If you take five million and invest it in the stock market, the average rate of return over the last fifty years is about 11% or $550,000 a year.

Take the same five million and use it as a down payment to buy a dealership doing 40 million in yearly sales. Your 2% profit is now $800,000 a year. You are also building equity in the real estate, equity in the business as you pay the loan, and any appreciation of the assets owned.

A basic business theory but you do have to know how to run the dealership. You also have to stay up at "night" worrying about it.


Posted By: JALLEN4 on 08/16/07 06:56pm

topflite51 wrote:

homebrew2 wrote:

The average Net profit in the autoparts business when I owned an auto parts
store was 4 percent of gross sales, which at that time... 1990... some FOUR TIMES as much as the average grocery chain which were running around 1 to 1 1/4 percent.
When I had my own auto repair business my net was significantly higher than 4 per cent. If it hadn't been, would have never quit turning wrenches for others.


I would also be willing to bet that your gross sales were not measured in millions. If I sell a $500 car retail my percentage of profit is a lot higher than if I sell a $50,000 car. The dollars made are a whole different story.


Posted By: JALLEN4 on 08/16/07 07:10pm

Sully2 wrote:

JALLEN4 wrote:

Sully2 wrote:

Ed C wrote:

A dealer showwed me the invoice sheet for Winnebago on the Jounery and Adventurer the invoice was 71.3% +- of the list price.

DEALERS INVOICE on a motorhome ( just as on an auto) doesnt mean JACK SQUAT! You can have identical coaches..brand and options..located at 2 different dealerships and have different MSRP sheets on them!

( Same thing with cars)


Sully, I agree on RV's as Monroney labels are not required by law. You are wrong on cars. The Monroney label, sticker, will always show the same MSRP for vehicles with the same equipment. Freight has even been equalized and will be the same in Florida as California. The only exception would be when cars were produced at different times and there had been a price increase in the interim.


I SHOULD NOT have said "MSRP" in my posting..and shoudl have continued to say DEALERS INVOICE...which is a totally fictious sheet of numbers created by the dealer themselves which already has their MINIMUM PROFIT built into it. THOSE ( dealers invoices) ARE NOT identical from dealer to dealer. If you dont belive me..take adrive down to "Jake the Snake" Sweeny's and price a new Chev "X" and then go to that small dealer?? ( cant remember the name right off) over in Lawrenceburg IN and price the same identical vehicle. The indiana dealer is L..O..W.. overhead as compared to Sweenys which is typically lighted up like Duke Energy's power plant and has at least a dozen "lot lizards" running amoke on the lot!

DEALERS INVOICE is a piece of paper to "slick" to use in the mens room!

BUT..on the matter of "MSRP'S"..I suggest you do a search about Beaudrys and Tiffin as compared to other dealerships ( different dealerships...different MSRP's on Tiffins)


The real invoice is the same for every dealer. That is not true in the RV business. What they might "show" you might vary. One Chevrolet dealer pays the same as any other whether they buy one or several thousand. Each invoice will also have a 3% of MSRP holdback that is clearly printed on the invoice. There will also be advertising association fees clearly printed on the invoice which will vary from market to market.

All of this about the car business is easily verified by searching on the Internet. It is consistent across all dealers of the same make and actually is part of legislation in most states serving to protect dealers. That is not the case in the RV business. That is also why you don't see printed cost figures on the Internet. There is too much variance between dealers and between manufacturers to accurately state exact costs.


Posted By: JALLEN4 on 08/17/07 05:04am

Folks, I have spent 40 years operating dealerships, successfully. I have no reason to fabricate numbers on this Forum as there are no members here who impact my business. While there are vast differences between RV and car dealerships, the basic financial operations are identical. That is why so many RV dealerships are operated by present or former car dealers. I have looked long and hard at investing in the RV Industry and studied their operations.

Both operations are complicated and somewhat specialized. I have never stated they are not lucrative but they are risky and capital intensive. It is not uncommon for an average sized operation to have a $200,000-300,000 overhead monthly before the doors are opened.

The bottom line for the consumer is they really have no need to understand the actual operation nor the actual wholesale cost of the merchandise. They simply need to shop the exact same model and equipment at various dealers and compare the bottom line they write the check for. They also need to account for service after the sale. It is a very competitive business and not hard to find dealers who are willing to sell merchandise at a reasonable price to serious buyers with the ability to pay. Shopping, either in person or on the Internet, is the great leveler for all dealerships. It really is not that complicated.


Posted By: OleRVer on 08/16/07 03:07pm

Maybe I don't need to say anything, but in all three statements, JALLEN4 is correct. I started to mention the MSO until I read his statement. The margin of net profit is just plain business since, of which many folks do not have, including some in business. The manufacturer is paid when the coach arrives in most cases, or when it leaves the factory, sometimes when production starts. The banks who floorplan the coach, which is basically a loan, sometimes will go a year, but no more, so Mike is "kinda" right, but I can asure you, the manufacturer has had their money for some time. I do not profess to know it all, but I read so many misconceptions in this forum. So many people are being misled by somebody.


Posted By: OleRVer on 08/16/07 03:20pm

I spent 15 years in the guild jewelry business, we netted 5%. Facts, no fuzzy nothing.


Posted By: topflite51 on 08/16/07 08:09pm

JALLEN4 wrote:

topflite51 wrote:

homebrew2 wrote:

The average Net profit in the autoparts business when I owned an auto parts
store was 4 percent of gross sales, which at that time... 1990... some FOUR TIMES as much as the average grocery chain which were running around 1 to 1 1/4 percent.
When I had my own auto repair business my net was significantly higher than 4 per cent. If it hadn't been, would have never quit turning wrenches for others.


I would also be willing to bet that your gross sales were not measured in millions. If I sell a $500 car retail my percentage of profit is a lot higher than if I sell a $50,000 car. The dollars made are a whole different story.
All parts I sold were marked up the same per cent, no matter if the part cost 1 dollar or the part was 1000 dollars. See no reason for changing the gross profit margin on an item sold, and I don't believe RV dealers do either. As far as comparing a Caddy (it is Caddy, isn't it)dealership to an RV dealership is like comparing apples to potatoes, you have way more factory support than the typical RV dealership. One more thing, if they are not marking up 40 to 50 percent over their cost for the MSRP, just how are they giving 25 to 30% discounts off of it and staying in business?


Posted By: topflite51 on 08/16/07 04:59pm

homebrew2 wrote:

The average Net profit in the autoparts business when I owned an auto parts
store was 4 percent of gross sales, which at that time... 1990... some FOUR TIMES as much as the average grocery chain which were running around 1 to 1 1/4 percent.
When I had my own auto repair business my net was significantly higher than 4 per cent. If it hadn't been, would have never quit turning wrenches for others.


Posted By: alcolby on 08/16/07 07:08pm

A grocery operation making 1% turns over their inventory many times in a year,how many varies with the commodity.
Their annual net on cost is many times higher than the 1 or 1 1/4 %
stated here.

You can make a lot more than 1% in a CD and watch tv or sleep all day, don`t need to work to lose money.

Al C.
___________________________________________________________________


homebrew2 wrote:

The average Net profit in the autoparts business when I owned an auto parts
store was 4 percent of gross sales, which at that time... 1990... some FOUR TIMES as much as the average grocery chain which were running around 1 to 1 1/4 percent.



Posted By: ralphr on 08/16/07 01:52pm

To JALLEN4, did you ever purchase a brand new RV? If you did you will notice that the "title" is transfered from the manufacturer to you, or most likely to your bank who holds it until the loan is paid off. If the dealer purchased the RV from the manufactuer then the title would be transfered from the dealer to you. Since it is from the manufactuer not the dealer than title never transfered to the dealer. Why you ask? It is because the dealer never "purchased" the RV from the manufacturer!! Don't take my word for it check your titles or go out and purchase a new RV and see where the title comes from!


Posted By: SCHARLEY on 08/17/07 07:14am

tomlang wrote:

And all I wanted to know is how much below MSRP you can offer and have a chance of it being accepted.


Well looks to me that the dealer your trying to buy from would be the one you would need to ask this question of since they are the only one that knows the answer?


Posted By: SCHARLEY on 08/17/07 12:08pm

I know that I don’t know nothin about this high power corporate executive type stuff but if I “owned” a RV or a car dealership it would be a corporation that I would draw a salary from each month. To limit my personal tax liability I would set my salary no higher than I needed. I would reinvest additional gross corporate profits toward growth and expansion there-by avoiding excessive corporate taxes while benefiting from those investments i.e. new locations, motor-home, boat, car, airplane, lake house, etc.

My point is, to set here and debate what net % “profit” a dealer or dealership makes without examining the total business plan is simply a waste of time and has no relevance to how much more a motor-home is sold for above what if cost the dealer.

By the way, I learned this when I opened my first lemon-aid stand in front of my granddaddy’s house when I was ten years old. And no I don’t have a MBA, although I do have several fellers that do have them working for me!


Posted By: TiffinGuy on 08/17/07 12:31pm

MBAs are ok ... as long as you do not expect them to actually run the business or make a profit.


Posted By: socal114 on 08/17/07 12:09am

Since this thread has been hijacked looong before my post, why stop now...

Of the dealers out there selling Newmar and Tiffin, who would be recommended for cutting deals with the deepest discounts? I am looking to upgrage to a Phaeton or Ventana, and location/distance is not an issue. The best deal locally I have found is 26% off MSRP on an 08 Ventana. Not sure on the Phaeton, I will be working that this weekend. Can I do better? I'm not trying to be greedy, just trying to get the most coach for the money and I have a budget to consider...


08 Tiffin Phaeton 40QSH
10 Chevy Silverado 4X4




Posted By: Expressman on 08/16/07 07:23pm

JALLEN4 is right again. Manufacturer does NOT Issue TITLE, Manufacturer issues "Certificate of Origin". And you dont need COO to purchase a vehicle only to register it.


Posted By: pipermike on 08/16/07 02:29pm

What I found out is that the manufactures give the dealers a year to move the inventory before they have to pay the manufacture. So find one that is close to the year (since date of manufacture on label) and wheel and deal. Dealers don't stay in business if they lose money.


Mike & Marcia
Rocky and Sally - the Hounds
2006 Discovery 39L
2006 Jeep Liberty - Toad


Posted By: sflabrkr on 08/16/07 07:48pm

Jallen4 I was with you till you said you only make 2%. Then I realized you meant 2% of total sales not investment. I don't think that the average RV dealership can stay in business with a 3% profit. I don't think that they can sell enough units unless they are keeping the sales force to get the maintenance. I know that is where the money is in any dealership.


Posted By: tomlang on 08/16/07 10:56pm

And all I wanted to know is how much below MSRP you can offer and have a chance of it being accepted.


Posted By: John-in-SWO on 08/17/07 12:49pm

JALLEN and SCHARLEY are both so right. The difference between dealer cost and msrp doesn't mean jack until you get the big picture. And "loads to the dump" or "handy man for hire" business backgrounds do not translate well into understanding the operation of a real business with real overhead. Research the product you want, shop around, and get a fair price for it. And a "fair" price doesn't mean 1% over what one might think is dealer cost. Everyone has to feed their families, even guys who own dealerships.


Posted By: homebrew2 on 08/16/07 03:40pm

The average Net profit in the autoparts business when I owned an auto parts
store was 4 percent of gross sales, which at that time... 1990... some FOUR TIMES as much as the average grocery chain which were running around 1 to 1 1/4 percent.


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