How Much can a Dealership make ?? - K-Bikes.com - Excellence in Motion
 
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post #1 of 8 (permalink) Old Sep 9th, 2006, 1:03 am Thread Starter
 
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How Much can a Dealership make ??

This maybe the wrong forum, however i am just curious. How much do you think the average midsize BMW dealership makes ?? I know a couple of dealers that sell Harleys and obviously do quite well. However it seems that quite a few BMW dealers are going out of business. Do they just not sell enough bikes ?? Not enough profit margins ?? Single point only ?? THANKS
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post #2 of 8 (permalink) Old Sep 9th, 2006, 1:32 am
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There is about 13-15% margin on BMW motorcycles (assuming that every bike is sold at MSRP). The difference between 13 and 15% is dependent on the dealership maintaining a CSI score in the 87th percentile. Dealers are invoiced for the bikes upon shipment from the warehouse and must pay for them within 30 days. BMW does not currently offer flooring support for motorcycles (i.e., 60/90/120-day flooring terms).

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post #3 of 8 (permalink) Old Sep 9th, 2006, 2:08 am Thread Starter
 
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Thanks thats good info. I presume a very small % are sold at msrp ?? Do you know what BMW's financial requirements are for a dealership ?? It seems like alot of capital for a small % of return...I presume service and accesories do OK business ?? I am just curious if it makes financial sense to own one currently.
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post #4 of 8 (permalink) Old Sep 9th, 2006, 6:43 pm
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um, labor?

My stealer charges $72 per hour for labor. The next closest shop is 260 miles away. Getting a service date takes 6-8 weeks because they are slammed. It's a small shop and they don't seem to be all that savvy but hey, they could be makin big bank, I don' t know.

Good question,

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post #5 of 8 (permalink) Old Sep 9th, 2006, 7:07 pm
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I would expect that parts and service to be the bread and butter for any dealer operation. Honestly, unless you are located in the center of a major metro area close to some great roads, I have no idea how you could make it as a single line BMW marquee dealership. Remember, a high volume BMW dealer sells around 150 units per year (there are a couple exceptions, but 150 is the norm for a large volume dealership). When you consider just pure operating costs for a dealer to be in the range of $30,000 per month (building, utilities, salaries) and the fact that you have to pay for your inventory (assuming 10 bikes on the floor at any given time at $18000 apiece, meaning you have $180,000 in inventory sitting there), I doubt there are many dealers who are becoming filthy rich.

As for the labor rates, I've found that BMW labor rates are no more (or less) expensive than those at Yamaha, Suzuki, Honda, or Harley Davidson. Labor rates are market driven, and are not uniquely high for BMW.

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post #6 of 8 (permalink) Old Sep 11th, 2006, 10:45 am
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i think most dealers car or motorcycle make their money on service and used vehicles more so than new vehicles. it's also been my experience from reading this and other boards that quite a few dealerships sell bmw bikes at MSRP. i've also noticed since I purchased my first BMW bike that BMW dealers that were once BMW only are now selling other brands such as ducati, victory and triumph. common sense move to diversify your product to bring more $$$$$ in, i just don't see how any dealer can make it selling just BMW bikes.
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post #7 of 8 (permalink) Old Sep 11th, 2006, 5:41 pm
 
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Red face Dealer charges

I work in a fairly high tech industry, and the going rate for a service engineer is between 70 and 150 pounds sterling per hour. If we expect the technicians who look after our state of the art motorcycles to be fully trained and competent, shouldn't we expect them to charge accordingly? I don't like my bills but I do want my techies to be the best. So I pay the bills and tell myself I bought the best and it's looked after by the best.

Regards, Brian
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post #8 of 8 (permalink) Old Sep 18th, 2006, 10:53 pm
 
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Our local Cincinnati, Ohio dealer closed last winter. I knew a few of the guys well. Their bike sales were low due to the owner's attitude of "Full Price or nothing". I think they were down to selling like 75 new bikes a year.

They dealership made the greatest profit on parts and accesseries. The service department did OK , but not great. It might have done better if the bike sales numbers had been better.

I agree, the dealers need to carry more than just BMW.
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