Dealer's Actual Cost = ( Invoice Price - Factory To Dealer Incentives - Factory Holdb

Originally Posted by DVDA

Glad I could make you smile Divergirl...ask your CA if he will do free shipping to South Florida and we can talk lol :-)

Prosecutor eh? tough job, lot of respect for you. I grew up wanting to be a Deputy District Attorney but when I got to law school and came to shocking realization that I was AWFUL at Crim Law, Crim Pro and Con Law.

I ended up being the best at Torts, Civ Pro, Civ Trial & Products Liability...funny how things work out.

Well, then between the two of of us, you'll definitely be needing the bimmer....It's been a few years since I prosecuted (retired at the ripe old age of 30), but trial lawyers have to LOOK good. If I was still prosecuting, I'd hide my 328. It would likely get keyed....!

Originally Posted by paqman2

There is hold back from BMW!!! it is a little more complicated then most manufacturers programs for two reasons 1st not all dealers qualify for the program but in general any large dealership will. 2nd it is based on sales by month so qualifying dealers might not get the full 3% but the vast majority do! It is entirely possible to get a dealer to sell a car just for their hold back or less.

It isnt holdback. Its a bonus, AV money is the exact term.. You only get this if you hit several goals, number of sales, model mix, CEI results.... all sorts of stuff.

When you buy a car at $1000 by the time we take wages, detail, PDI, mats, b and o tax and tank of gas we pretty much are selling a car for the AV Check. If and ony if we keep all the balls in the air. So we potentially might not get the AV check, its not gurenteeed so its hardly negotiable.

Can you pick out which one is big pimp?

It is great to get good information. I gues we can overlook sarcastic posts. Thanks for the information.

Lets throw this out for discussion,

Wouldn't you think that in order to get the true cost for something, you'd have to factor in the intangibles such as rent/ utilities/ personnel/ taxes/ floorplan expense and a hundred other variables that go into running a business? In theory, you figure out how much it costs just to show up and unlock the doors, then you divide that amt. by the number of units you sell, and add that expense to the "cost" of your goods sold? Since when is the "invoice" the cost of something??

Ed

Selling new cars is only the meat and potatoes of the car business, the gravy is in the service dept , the financing and the used car dept. If it wasn't for all these other revenue producing aspects of the car business there is no way they could sell new cars at invoice or close to it and survive.

Originally Posted by Elias

Selling new cars is only the meat and potatoes of the car business, the gravy is in the service dept , the financing and the used car dept. If it wasn't for all these other revenue producing aspects of the car business there is no way they could sell new cars at invoice or close to it and survive.

Actualy the gravy, as you put it, is service and parts. You'd be lucky if you break even with sales, and thats adding in finance and used cars...

Originally Posted by SeaTown

Actualy the gravy, as you put it, is service and parts. You'd be lucky if you break even with sales, and thats adding in finance and used cars...

You know, SeaTown, I find myself wondering how a person like you could do a job like this. It seems so thankless...even though people-like-me appreciate people-like-you more than you will ever know.

You ROCK! (And so does my new convertible!)

Renee

Thanks DG! It's not that thankless, every now and again you meet cool, interetsing and fun peopl. The mooches and misers make up a small percentage... It's kind of backwards, the nicer a client is the more inclined you are to help them with any issues that may arise before during and after the sale, even if it is way outside of your normal scope. Clients that practice *********gery often need help too....

Originally Posted by ronkh

Can you pick out which one is big pimp?

All of them!!!

This thread cracked me up......

1: Research is a good thing - why would someone frown on it
2: A good deal is where both parties are happy with the results - I think that is where bigpimp was going but he could not clearly articulate it.
3: Who has a screen name BigPimp? really? why not "13" dong" or "ImakeMorethanYou" if you are going to go with a name like that
4: I love the pic of the DB's
5: FloBMW is right
6: Just an FYI so you don't become a bad customer watch this:

Originally Posted by SeaTown

Thanks DG! It's not that thankless, every now and again you meet cool, interetsing and fun peopl. The mooches and misers make up a small percentage... It's kind of backwards, the nicer a client is the more inclined you are to help them with any issues that may arise before during and after the sale, even if it is way outside of your normal scope. Clients that practice *********gery often need help too....

Good to know. Especially when I think about get into the mode of practicing "*********gery"....

Originally Posted by flowbmw

Lets throw this out for discussion,

Wouldn't you think that in order to get the true cost for something, you'd have to factor in the intangibles such as rent/ utilities/ personnel/ taxes/ floorplan expense and a hundred other variables that go into running a business? In theory, you figure out how much it costs just to show up and unlock the doors, then you divide that amt. by the number of units you sell, and add that expense to the "cost" of your goods sold? Since when is the "invoice" the cost of something??

Ed

Interesting question.

When I was buying an E39M5 in 2003 where were you in helping out with this nifty explanation? When BMW retail dealers were tacking $5k and more onto MSRP, there was little regard for what is 'fair' and 'right' and what the 'true cost' was....

Lets hope dealers have been saving the money they screwed out of folks when times were good to support themselves now that times are lean... reasonable, no?


Dealers sell cars to people that they cultivate as "clients" so they have a personal relationship with you so you are compliant and less likely to 'walk' or negotiate. Dealers sell them cars, (and some dealers threaten owners with 'if you don't buy from sales you won't get 'taken care of' in service') so that dealers can get the money on the back end in service and warranty.

Wouldn't you take the prospective 'future service revenues' and use that to estimate the 'current day cost' on a car you are selling?

Maybe the best dealer is virtual. Just a sales office, zero overhead, drop ship to other dealers or the PCD, and let everyone else do the service.

Jus' saying...

A

^^^

Supply and demand...

Demand for an item exceeds supply...price goes up; No different than when the Wiis first came out. Everybody logging on to Ebay and selling theirs for 200-300% over retail. If you don't like the price you don't have to buy...simply as that. If you have something people want you are going to ask for max $$$ and then some.

Businesses, private or corporate are in it to make money. Businesses are not non profit organizations.

I don't hear anybody asking for invoices to their TVs that they brought. Or the Gucci bag you brought your better half. But as soon as a dealer asks for retail or a profit for what they are selling; all of a sudden they are the big bad stealership.

If you don't like the offers...don't buy...it's not personal...it's just business.

Originally Posted by ard

Maybe the best dealer is virtual. Just a sales office, zero overhead, drop ship to other dealers or the PCD, and let everyone else do the service.Jus' saying...

A

And you think "everyone" else will work for free?

Do you work for free? If you do let me know...im hiring.

Originally Posted by JW_BMW

And you think "everyone" else will work for free?

Do you work for free? If you do let me know...im hiring.

By "everyone" I meant that the other brick and mortar stores can do the service, WHICH IS THE MOST PROFITABLE PART OF YOUR BUSINESS.

I don't work for free, nobody should. Including BMW salesmen. They should be paid exactly what their time is worth. Not a penny more nor a penny less.

Originally Posted by ard

By "everyone" I meant that the other brick and mortar stores can do the service, WHICH IS THE MOST PROFITABLE PART OF YOUR BUSINESS.

Since you sound like you think you know what you are saying...then please explain...

What other brick and mortar stores...and which is the most profitable part of our business

Originally Posted by ard

Interesting question.

When I was buying an E39M5 in 2003 where were you in helping out with this nifty explanation? When BMW retail dealers were tacking $5k and more onto MSRP, there was little regard for what is 'fair' and 'right' and what the 'true cost' was....

Lets hope dealers have been saving the money they screwed out of folks when times were good to support themselves now that times are lean... reasonable, no?


Dealers sell cars to people that they cultivate as "clients" so they have a personal relationship with you so you are compliant and less likely to 'walk' or negotiate. Dealers sell them cars, (and some dealers threaten owners with 'if you don't buy from sales you won't get 'taken care of' in service') so that dealers can get the money on the back end in service and warranty.

Wouldn't you take the prospective 'future service revenues' and use that to estimate the 'current day cost' on a car you are selling?

Maybe the best dealer is virtual. Just a sales office, zero overhead, drop ship to other dealers or the PCD, and let everyone else do the service.

Jus' saying...

A

In response to some of your questions... When the E39 M came out it was in crazy demand, so dealers made hay while the sun shone. it made up for the invoice deals and $500 over deals and meant there was a glimmer of profit in the department. A car is only worth what someone will pay for it. If that someone wants one bad enough then its worth it to them. I dont agree but customers can be funny things.... So yes it is reasonable to hope that previous profit earned helps them out while times are hard.

Anyone stupid enough to fall for the 'if you don't buy from sales you won't get 'taken care of in service' deserves everything they get. Sorry.

Future revenues are hoped for but never guarenteed. Thats what todays revenues are - service and parts. Do a good job in Sales and you HOPE you get the service business.

I think the topic of no showroom has been done to death, but you said drop ship to other dealers? How would you do that with just virtual dealers...? Surely you want to touch feel and drive the car you are buying? Plus what about all the customers that simply will not order a car without seeing it in the color they want? How do you accomodate them?

It sounds like everyone wants a no haggle experience. So how about this - from now on we will sell the cars at todays invoice prce? Effectively a 7% discount and we call that "The Price" and not MSRP but you dont get any money off. At all.

Then for each new car we sell BMW give us - say - 7%. Is that fair or do you want that 7% too? Because your getting the car at invoice right? So we can keep what BMW give us?

Originally Posted by JW_BMW

^^^

Supply and demand...

Demand for an item exceeds supply...price goes up; No different than when the Wiis first came out. Everybody logging on to Ebay and selling theirs for 200-300% over retail. If you don't like the price you don't have to buy...simply as that. If you have something people want you are going to ask for max $$$ and then some.

Businesses, private or corporate are in it to make money. Businesses are not non profit organizations.

I don't hear anybody asking for invoices to their TVs that they brought. Or the Gucci bag you brought your better half. But as soon as a dealer asks for retail or a profit for what they are selling; all of a sudden they are the big bad stealership.

If you don't like the offers...don't buy...it's not personal...it's just business.

Agreed, supply and demand. So why do SOME salesmen (you a BMW salesman?) whine about 'we're not making any money on the deal" and "shouldn't cost include the builidng rent and electricity" when the DEMAND is low and prices are driven to virtually the cost of the car from BMW?

Why do they expound the "Law of Supply and Demand" when tacking on blue sky markups in good times, but whinge about 'it's not fair' when the demand is virtually nil and prices tank?

Trust me bub, I understand business and the sales psychology... the rationalizations are always different and are a required part of the process.

A

PS I do, in fact, want to know invoice on virtually everything I **** from granite slabs to 65" LCDs. And in my book stealerships get their title not from new car sales, but from bending folks over on service IMHO>

Originally Posted by ard

Agreed, supply and demand. So why do salesmen (you a BMW salesman?) whine about 'we're not making any money on the deal" and "shouldn't cost include the builidng rent and electricity" when the DEMAND is low and prices are driven to virtually the cost of the car from BMW?

Why do they expound the "Law of Supply and Demand" when tacking on blue sky markups in good times, but whinge about 'it's not fair' when the demand is virtually nil and prices tank?

Trust me bub, I understand business and the sales psychology... the rationalizations are always different and are a required part of the process.

A

PS I do, in fact, want to know invoice on virtually everything I **** from granite slabs to 65" LCDs. And in my book stealerships get their title not from new car sales, but from bending folks over on service IMHO>

...who is whining? Don't confuse a few who whine with the majority who don't. Or maybe they are whining because it is in fact a zero profit deal...just maybe they are telling the truth this one time.

The cost of keeping the lights on at ABC BMW has no bearing on what I will sell the car for.

Originally Posted by JW_BMW

...who is whining? Don't confuse a few who whine with the majority who don't. Or maybe they are whining because it is in fact a zero profit deal...just maybe they are telling the truth this one time.

The cost of keeping the lights on at ABC BMW has no bearing on what I will sell the car for.

Fair enough, I edited my post to reflect that not all are whining.

Is this a fair deal next week for an X5/35d?

published wholesale,
minus BMW incentives,
plus training,
plus MOCA,
plus delivery

and then lets say add $500 for their 10 hours of work,

plus a guarantee of 'all 5s' to maximize their CSI 'kickback' or profit sharing, or whatever this secret plan is called.

For a car they will order and I will pick up in Spartanburg, recognizing this is a 2009 delivered 6 weeks before the 2010 comes out.

Just curious as to how outrageous this offer appears....

Originally Posted by ard

Fair enough, I edited my post to reflect that not all are whining.

Is this a fair deal next week for an X5/35d?

published wholesale,
minus BMW incentives,
plus training,
plus MOCA,
plus delivery

and then lets say add $500 for their 10 hours of work,

plus a guarantee of 'all 5s' to maximize their CSI 'kickback' or profit sharing, or whatever this secret plan is called. << That has no bearing on the selling price of the car...just like paying for the cost of keeping the lights on has no bearing on the cost of the car
For a car they will order and I will pick up in Spartanburg, recognizing this is a 2009 delivered 6 weeks before the 2010 comes out.

Just curious as to how outrageous this offer appears....

Can't answer your question...it is between you and the seller to find common ground...and to determine what is fair and what is not.

Originally Posted by DVDA

That is currently...does this change or BMW never does holdback & Dealer incentives?

I know where to find BMW to Customer Incentives, but not BMW to Dealer Incentives

One place that carries them is Automotive News - unfortunately it is a subscription site. Often a local car dealer will have a copy of Automotive News (a tabloid-like glossy newspaper) in the customer service lounge. Also your local library may carry a copy.

I don't know if Ward's Automotive carries that info. Anyone reading this get Ward's?

Originally Posted by JW_BMW

Can't answer your question...it is between you and the seller to find common ground...and to determine what is fair and what is not.

Just a bundle of mystery I guess.

No such thing as 'fair', just 'common ground'?

And that 'common ground' shouldn't take into effect any future incentives from BMW based on CSI, nor should it consider the cost of maintaining a showroom, employees, etc...

Sure makes an economic analysis difficult...

But I think I can actually see where you are coming from in an abstract way- 'fairness' isn't the issue, the market decides the price irrespective of 'fairness'?

Maybe they'll be some other inputs- my question really was aimed at you personally, JW, but rather the participants in the forum.

Originally Posted by JW_BMW

Can't answer your question...it is between you and the seller to find common ground...and to determine what is fair and what is not.

Originally Posted by ard

Just a bundle of mystery I guess.

No such thing as 'fair', just 'common ground'?

And that 'common ground' shouldn't take into effect any future incentives from BMW based on CSI, nor should it consider the cost of maintaining a showroom, employees, etc...

Sure makes an economic analysis difficult...

But I think I can actually see where you are coming from in an abstract way- 'fairness' isn't the issue, the market decides the price irrespective of 'fairness'?

Maybe they'll be some other inputs- my question really was aimed at you personally, JW, but rather the participants in the forum.

Did you read the whole post? It's not very long.