what is reasonable profit for the dealer

PawPaw_n_Gram wrote:
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?

Absolutely false on the first part. ALL dealers PAY for their units the minute it leaves the factory. They either pay for them out of their own money(VERY RARE) or have a Financing Institution That "Floorplans" the units on his lot. The dealer then pays monthly interest on ALL the units on his lot except the used units. But, some dealers can also Floorplan some of his used units. It depends on how good his credit is with the Financing institutions. If the Factory has a lot of excess units (VERY rare after the 2008 meltdown), then the Factory may have a program to pay the Interest on those particular units for a set time to help move them. Doug

late bloomer wrote:
Thank you all for the replies. I am doing my research, and this is part of it. My question stems from the fact that, after I did my research on a particular model, I made an offer, and was pretty much shown the door. No counter offer, no haggle, very much unlike any negotiating I had done for a car or truck.

Since there is no "consumer reports" service available that I am aware of, I just wondered if there was some protocol that I violated in my negotiating. I know the dealer has to make some profit, but it's my money, and I'm kinda attached to it.

I believe it's the dealers way of telling you that they don't think enough of your offer to waste there time negotiating any further.

In the middle of 2008 we were seriously looking at the Monaco 30SFS on a Workhorse chassis. I walked in to a brand new HR/Monaco dealer 10 miles from our house and set a check for what I thought was a fair purchase price on the desk. The salesman picked it up, walked in to the sales managers office, came back out, set the check back on the desk and said no thank you. That was what I was willing to pay and they were not interested. We added $10,000 to that check and purchased a new 08 HR Vacationer XL for $103,000 out the door from another dealer. They will turn down a cash offer if it does not fit their business model.
Randy

And if a dealer shows me the door because of a perceived low-ball offer, that's fine and I will take my money elsewhere.

It makes sense that there is inherent risk in selling a luxury item to people who actually enjoy taking long road trips. It wouldn't be unreasonable to assume any of us would happily travel half the country to fetch our shiny new RV for several thousand dollars less.

How much less is up to you.

"OH but when you'll need service...." Really? How often does your RV break down in your driveway. Normally you are miles from home when something goes wrong. If you do happen to live nearby a great repair shop that also sells RV's, then consider buying there. But my guess is, if they are great at fixing RV's, they will fix anyone's no matter where they purchased it.

late bloomer wrote:
..................l, I made an offer, and was pretty much shown the door. No counter offer, no haggle, very much unlike any negotiating I had done for a car or truck.
..........

The dealer probably has enough people coming in with lowball offers that he instinctively knows when an offer is so low as to be not worth pursuing for whatever he has to sell.

late bloomer wrote:
Thank you all for the replies. I am doing my research, and this is part of it. My question stems from the fact that, after I did my research on a particular model, I made an offer, and was pretty much shown the door. No counter offer, no haggle, very much unlike any negotiating I had done for a car or truck.

Since there is no "consumer reports" service available that I am aware of, I just wondered if there was some protocol that I violated in my negotiating. I know the dealer has to make some profit, but it's my money, and I'm kinda attached to it.

Sounds like you low balled big time and your offer was not even in the ball park.

Your offer could have been too low for the coach, or too low for the market where you were shipping.

One thing that is obvious is in some places coach A sells for XXXXX dollars and in another state - it can sell for 20% more or less.

Or you may just have found a dealer who had another customer interested in the rig.

Thank you all for the replies. I am doing my research, and this is part of it. My question stems from the fact that, after I did my research on a particular model, I made an offer, and was pretty much shown the door. No counter offer, no haggle, very much unlike any negotiating I had done for a car or truck.

Since there is no "consumer reports" service available that I am aware of, I just wondered if there was some protocol that I violated in my negotiating. I know the dealer has to make some profit, but it's my money, and I'm kinda attached to it.

dan-nickie wrote:
I'm with Dennis.
Worrying about a fair profit for dealer is not part of a smart negotiating process. Let them worry about that.
Your job is to buy as low as you can.

The point where neither of you are going to walk away from the table would be a reasonable judge of fair profit and fair selling price.