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 > How much do dealers pay for the RV's they sell

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RobWNY

Jamestown, NY

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Posted: 02/01/20 01:51pm Link  |  Quote  |  Print  |  Notify Moderator

Since the consensus is that the dealers need to make as much as they can to pay their business overhead and rent to the manufacturers for the units on their lots so they don't go out of business, I'm glad to know that you all turned down any kind of discount your dealer offered you. Same goes for the vehicles you have purchased. Sticker price for your cars and trucks would be the only option. You know, so the dealerships don't go out of business. Shame on me for thinking RV dealers gouge their customers. I should have realized they are making the very best deals for every one of their customers.


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Chum lee

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Posted: 02/01/20 01:57pm Link  |  Quote  |  Print  |  Notify Moderator

What a dealer pays for a product is often based on sliding scales. Those scales consider: the dealers credit worthiness, the number of units sold by that dealer over a given period of time, manufacturers rebates, warranty claims, local competition, current market conditions/demand, current new factory inventory, used inventory, energy costs, weather, time of year, interest rates, federal/state tax incentives, the local/national economy, fuel costs/availability, etc., etc., etc.

What a dealer sells a product for, . . . . as much as they possibly can given the above. Every deal is different. (sometimes they take a loss just to move product)

IMO, if a dealer can clear 10% NET big ticket profit per sale after all is said and done, they may be around for a while. Think about it, any particular RV may sit around for 9 months and have have 50 people look at it before someone bites the bullet. Who pays for that? It's a tough business.

Chum lee

EDIT: To answer your question, a typical (NOT SPECIFIC) new RV deal (greatly simplified) might look something like this:

Dealer cost: $120,000
Overhead: 45,000
Profit: 15,000
Retail price: $180,000

* This post was edited 02/02/20 02:12pm by Chum lee *

Terryallan

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Posted: 02/01/20 02:10pm Link  |  Quote  |  Print  |  Notify Moderator

RobWNY wrote:

Since the consensus is that the dealers need to make as much as they can to pay their business overhead and rent to the manufacturers for the units on their lots so they don't go out of business, I'm glad to know that you all turned down any kind of discount your dealer offered you. Same goes for the vehicles you have purchased. Sticker price for your cars and trucks would be the only option. You know, so the dealerships don't go out of business. Shame on me for thinking RV dealers gouge their customers. I should have realized they are making the very best deals for every one of their customers.


Easy fix for you. Don't buy one from a dealer. When I buy. I make the best deal possible. And no matter what that is. I know they are still making money off me. Same for a car, same for a hair dryer at Walmart. It all depends on what I am willing to pay. If you don't want companies to make money. Don't buy anything.


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PawPaw_n_Gram

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Posted: 02/01/20 03:10pm Link  |  Quote  |  Print  |  Notify Moderator

I constantly hear people say gross profits should be no more than the cost of the item, plus $1,000, $2,000, 10% etc.

They obviously never owned a business.

For example. If a person is paid $15 per hour, the employer direct cost with NO health insurance, 401K, profit sharing, etc - is at least $15.975 per hour - which includes the employer share of SS/Medicare.

Many RV sales people are either paid only commissions, others minimum wage as a base.

Running a business is expensive and 20-25% of the sales price going just to meet overhead is not unusual.

Dealerships pay the federal corporate taxes of 21%, most pay state corporate income taxes also. A dealership in Florida for example pays 5.3% on all profits. A dealership in Oregon pays 6.6% on the first million of profits, 7.6% on all profits above that.

Some might say corporate income taxes should not be counted as overhead.

Folks need to remember one very important thing -a business that does not make a after-tax profit for the owner/investors - goes out of business very soon.

Frankly, I would expect an RV to sell for no less than 150% of the dealer costs.


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BB_TX

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Posted: 02/01/20 03:26pm Link  |  Quote  |  Print  |  Notify Moderator

RobWNY wrote:

Since the consensus is that the dealers need to make as much as they can to pay their business overhead and rent to the manufacturers for the units on their lots so they don't go out of business, I'm glad to know that you all turned down any kind of discount your dealer offered you. Same goes for the vehicles you have purchased. Sticker price for your cars and trucks would be the only option. You know, so the dealerships don't go out of business. Shame on me for thinking RV dealers gouge their customers. I should have realized they are making the very best deals for every one of their customers.

Absolutely nothing wrong with taking any and all discounts dealers offer. Or even attempting to get additional discounts. They know what they must make to keep the business going and give themselves a reasonable personal income. They will attempt to find a reasonable point to get your business. It is all carefully calculated if the owner has any business sense.

Lightning55

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Posted: 02/01/20 04:49pm Link  |  Quote  |  Print  |  Notify Moderator

I also agree that any business is entitled to make a profit on the sale and servicing of the products they sell. That's why he's in business. As a consumer I know that but at the same time, I want to make sure that I got the best possible deal. That's why you have to become an educated buyer. Do your homework and shop prices on high end purchases. When negotiating a deal, remember if he is willing to say no and let you walk away, he probably already gave you the best deal that he could.

Lantley

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Posted: 02/01/20 04:55pm Link  |  Quote  |  Print  |  Notify Moderator

rexmitchell wrote:

Lantley wrote:

rexmitchell wrote:

I’d venture to guess that a majority of a dealerships profits come from service and not new sales. I can see them selling at a lower price and making it up on the back end with service.

Your correct there is variation and different margins, however $2000.00 gross a unit seems awfully low for the dealership is to be profitable.


Sure, I wasn’t speaking on a specific $ figure. For lower end units a 2k profit would be plenty. For the higher end units that number is probably closer to 5k.

You really need to look at it in percentages vs. an arbitrary $$ figure. If dealer cost is 50% of MSRP than dealer needs a gross profit of at least 20% to survive. Maybe if all goes well dealer can net 10 %


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MitchF150

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Posted: 02/01/20 05:17pm Link  |  Quote  |  Print  |  Notify Moderator

...

* This post was edited 02/01/20 07:56pm by MitchF150 *


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DallasSteve

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Posted: 02/01/20 06:12pm Link  |  Quote  |  Print  |  Notify Moderator

romore wrote:

It is really none of our business what the dealer paid, if he/she chooses to share that information and is honest so be it. As others have said there are a lot of costs with running a business and margins are thin, they have to move a lot of product to stay afloat.

True that. I contacted a dealer about an RV and they replied telling me their cost. Like I give flying #[email protected]! what they paid for it. The only thing that matters to me is the market price for comparable vehicles.

As to the original post, I'd say 30% was where you should start 5 years ago. I think manufacturers are wise to that and now it's closer to 40%. Do an RV Trader search for new models of anything and compare the highest and lowest prices for the same models. That will give you a good idea of the mark ups. If it's a brand that won't allow advertised discounts like Grand Design then you just need to look at comparable units from other brands.





B.O. Plenty

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Posted: 02/01/20 06:50pm Link  |  Quote  |  Print  |  Notify Moderator

Terryallan wrote:

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.
Lucky to find a Mfg. that will sell direct. Maybe 3 or 4 that will on some small oddball stuff but none of the majors will.
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