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