I was talking to a guy that's snowbirding next to me and we were discussing RV prices, discounts consumers should expect etc. He works for a dealer in his home state during the summer months so he was able to buy his rig at dealer price. He told me his 2019 Jayco Pinnacle 5th wheel had an MSRP of just over $100,000 but he paid $54,000 for it. He said a dealer typically is paying 51%-52% of the MSRP + the freight cost to get the rig to the dealer. I told him I had recently gone to the Tampa RV Super show and dealers were advertising 20%-28% off MSRP depending on the rig, but no mention of the other costs dealers like to attempt to get consumers to pay for (Freight, Prep, PDI fee etc.) so there was no way of knowing if the prices were "out the door" prices. He said that you should start negotiations at 30% of MSRP and then get the dealer to "throw in some stuff". I said I got 28% off my rig plus tax but I didn't get anything else thrown in. He felt I could have done better. I felt if I walked away hoping the dealer would do better, I would have not been able to buy my rig from that dealer. I had a strong feeling that was as good a deal that I was going to get on the 5th wheel I bought.So my thoughts are this...Why should a dealer be making more than 2 grand on any sale? That seems like a fair profit for them. Realistically I'm pretty sure we aren't going to get discounts that deep but why not? Why do we accept 25%-30% off MSRP, allowing the dealers to make a bundle on each sale, and then have to accept lousy customer service following the sale in many instances? If the 51%-52% numbers my neighbor talked about are accurate, shouldn't we be negotiating up from that number rather than down from the MSRP?

“Why should a dealer be making more than 2 grand on any sale? That seems like a fair profit for them.”You haven’t been involved in retail sales, have you? Or the costs of a retail business?

RobWNY wrote:I was talking to a guy that's snowbirding next to me and we were discussing RV prices, discounts consumers should expect etc. He works for a dealer in his home state during the summer months so he was able to buy his rig at dealer price. He told me his 2019 Jayco Pinnacle 5th wheel had an MSRP of just over $100,000 but he paid $54,000 for it. He said a dealer typically is paying 51%-52% of the MSRP + the freight cost to get the rig to the dealer. I told him I had recently gone to the Tampa RV Super show and dealers were advertising 20%-28% off MSRP depending on the rig, but no mention of the other costs dealers like to attempt to get consumers to pay for (Freight, Prep, PDI fee etc.) so there was no way of knowing if the prices were "out the door" prices. He said that you should start negotiations at 30% of MSRP and then get the dealer to "throw in some stuff". I said I got 28% off my rig plus tax but I didn't get anything else thrown in. He felt I could have done better. I felt if I walked away hoping the dealer would do better, I would have not been able to buy my rig from that dealer. I had a strong feeling that was as good a deal that I was going to get on the 5th wheel I bought. So my thoughts are this...Why should a dealer be making more than 2 grand on any sale? That seems like a fair profit for them. Realistically I'm pretty sure we aren't going to get discounts that deep but why not? Why do we accept 25%-30% off MSRP, allowing the dealers to make a bundle on each sale, and then have to accept lousy customer service following the sale in many instances? If the 51%-52% numbers my neighbor talked about are accurate, shouldn't we be negotiating up from that number rather than down from the MSRP?Considering their overhead I doubt they'd stay in business very long.

You are forgetting overhead. Those costs don't just 'go away'.The net profit is probably under 10%.

I agree with above. Unless you have owned a business (we have) you have no idea of the costs to run one. Salaries, employment taxes, utilities, mortgage or lease payments, maintenance, supplies, upkeep, insurance, workman’s comp, etc, etc. Those add up to huge dollar numbers, all overhead and to be paid before anything goes in your pocket.

Well. there is always the chance you could buy straight from the factory. I have heard of people going up and buying them from the manufacturer. Try it and see if you get a better deal.

How much do dealers pay for the RV's they sell | Good Sam Community

Lightning55
Explorer
Feb 02, 2020
PawPaw_n_Gram wrote:
Say a 3% commission on a $30,000 sale price trailer = $900
Same commission on a $100,000 Class C or gas Class A = $3,000
Same commission on a $250,000 Clas A DP = $7,500

Now I have no idea how salesmen are really compensated or what commission rates might be. But just looking at the math - but earning more commission money on high dollar sales makes sense.

I think RV sales are very similar to the car business, which I have been in all of my adult life. Salesman are paid a percentage of the PROFIT made on a sale, not the selling price. Commissionable profit is based on the difference between the cost of the vehicle and the selling price, less cost of sale items like non-factory reimbursed get ready expense, detailing,and any dealer 'packs'. In the car business, typical sales commissions are like 20-25% of the gross profit per unit, except when there are bonus deals, or volume increases in commission percentages.
Lightning55
Explorer
Feb 02, 2020
Dealer cost might be different from one dealer to the next. Some dealers might get volume incentives where the others don't. Ordering more new models may give the dealer cost adjustments on existing inventory as an incentive to order more. From what I've heard, if you can get a 30% discount off of the real MSRP, you are getting a fair deal.
PawPaw_n_Gram
Explorer
Feb 02, 2020
Say a 3% commission on a $30,000 sale price trailer = $900
Same commission on a $100,000 Class C or gas Class A = $3,000
Same commission on a $250,000 Clas A DP = $7,500

Now I have no idea how salesmen are really compensated or what commission rates might be. But just looking at the math - but earning more commission money on high dollar sales makes sense.
FlatBroke
Explorer II
Feb 02, 2020
Guess I just assumed they paid by the pound. You know the same way as you sell your junk.
DarkSkySeeker
Explorer
Feb 02, 2020
A salesman at an RV show told me they make very little on trailers and fifth wheels. Class A rigs were the best commissions.

Repeat, "a salesman told me..."
JIMNLIN
Explorer III
Feb 02, 2020
JALLEN4 wrote:
As a retired new car dealer, I can assure you that it would be extremely rare for some part-time dealership gopher to actually have a clue as to what the dealer is paying for product. He might well think he does. I can assure you very few people working for me did and none of them were part-time lot boys.

True this;
My wife was the company comptroller for a Skyline rv/mobilehome dealer some years ago.
No one but the dealer owner or his ceo knew how much monies the dealer had to give the trailer mfg for a certain line. Not even the wife knew this number.
And not every dealer got the same price. Generally... dealers with higher sales got the better mfg prices over mom and pop that sold 4-5 units a month.

I always check dealers price for a certain unit in a 200-300 mile area around me. This gives me a good idea what I'll have to give for that unit.
Walaby
Explorer II
Feb 02, 2020
Exactly CFerguson. Negotiations are most successful when both parties feel like they got a good deal and are happy. Whether it's buying a car, trailer, or negotiation a defense contract (which is my line of work). It has to be win-win for both parties, or it stalls.

As far as slamming folks for taking discounts, like OP does, you need to look at it differently. Dealers are well aware of the game. Why do you think MSRP is so different with different dealers on same models? They offer the discounts because consumers have come to expect them. They raise the MSRP a little if need be, or drop it a little, to show an even better deal. These discounts are already factored into their bottom line price they will accept for the unit. Even if they only paid 50% of the MSRP on the unit, don't forget there is interest they are paying while sitting on the lot, there's prep that has to be done before it goes out the door etc.. all that factors into their equation.

The job of the salesman (and dealer) is to make as much money as possible legally. The job of the consumer is to get the best deal they can get, and when both parties are happy, the contract is signed, and they both smile and walk away.

Why that is perceived as bad is beyond me.

Mike
CFerguson
Explorer
Feb 02, 2020
I used to work for a very large company. When they first sent me to mgmt school I noticed that Thursday afternoon on the syllabus was the topic "Negotiations". I and every other attendee looked forward to that course, thinking 'o boy, I'm gonna learn from professionals how to screw my car dealer on my next auto purchase".

It wasn't anything like that. The takeaway was that there is a price where both parties in a deal walk away happy and it is our job to find that point. A Good Deal is one where everyone walks away happy.

If you are happy with the RV deal you got, don't beat yourself up thinking you could have gotten 2 more nickels because someone on the inturweb said you didn't 'win' the sale.
mich800
Explorer
Feb 02, 2020
spoon059 wrote:
Lynnmor wrote:
The real question should be: What is a $100,000 RV really worth considering the manufacturer made a profit selling it for $50,000? Since much less that $50,000 in materials and labor was used, is it any wonder these things are of low quality?

I'm doubtful that a $100K MSRP RV sold for $50K new... Although I did read it on the internet, so it must be true.

Yes, I would put as much credibility in this story as the people getting 25 mpg pulling a 20k lb trailer.
spoon059
Explorer II
Feb 02, 2020
Lynnmor wrote:
The real question should be: What is a $100,000 RV really worth considering the manufacturer made a profit selling it for $50,000? Since much less that $50,000 in materials and labor was used, is it any wonder these things are of low quality?

I'm doubtful that a $100K MSRP RV sold for $50K new... Although I did read it on the internet, so it must be true.