what is reasonable profit for the dealer
Is it a percentage of the price or a fixed amount? If I can find out what a dealer has paid for the unit, how much above that is fair?
Forum Discussion
Dealers don't 'buy' new units most of the time. They take them on consignment and have a set fee that has to be paid back to the mfr after the sale.
Reasonable profit - hard to say - depends upon volume. A dealer who sells 300 units at average $150,000 per year can make a lot less per unit than a dealer who sells 30 units per year.
I would expect the manufacturer to get between 40 and 60% of the MSRP, and the difference between that and the sale price is the dealer's gross profit. Not operating profit which would likely be only half the gross profit, and probably only 10% of the gross profit might be net profit.
Plus - is the owner a paid employee with a set salary - which makes her/his money part of the operating costs, or does the owner take her/his money out of the net profit after all expenses are paid?
Reasonable profit - hard to say - depends upon volume. A dealer who sells 300 units at average $150,000 per year can make a lot less per unit than a dealer who sells 30 units per year.
I would expect the manufacturer to get between 40 and 60% of the MSRP, and the difference between that and the sale price is the dealer's gross profit. Not operating profit which would likely be only half the gross profit, and probably only 10% of the gross profit might be net profit.
Plus - is the owner a paid employee with a set salary - which makes her/his money part of the operating costs, or does the owner take her/his money out of the net profit after all expenses are paid?
