What's a "fair" profit?

[TheJazzMan]

I'm trying to close a deal on a 2009 Essex with 3 or 4 Newmar dealers and am having limited success. Most want to play the % off MSRP game, but since I am taking delivery at the factory, this coach will not hit the selling dealer's floorplan and the dealer won't have to do any prep. Because the dealer will just be "brokering" the deal, I'm asking the sales people to just quote me a fixed price for brokering the deal and I'll pay the invoice price plus that amount. I'm asking them, "Will you sell it to me for $5000 over invoice?". One has agreed to that number and others are insisting on some percentage off of MSRP in what I assume is an attempt to hide the invoice price. Based on what I've read here, there is a 40% markup on these motorhomes, so the invoice price is pretty darned easy to calculate.

Is $5000 over invoice fair (or too much) on an MSRP of $585,000 for just brokering the deal? Or should I take another approach?

[TheJazzMan]

I'm trying to close a deal on a 2009 Essex with 3 or 4 Newmar dealers and am having limited success. Most want to play the % off MSRP game, but since I am taking delivery at the factory, this coach will not hit the selling dealer's floorplan and the dealer won't have to do any prep. Because the dealer will just be "brokering" the deal, I'm asking the sales people to just quote me a fixed price for brokering the deal and I'll pay the invoice price plus that amount. I'm asking them, "Will you sell it to me for $5000 over invoice?". One has agreed to that number and others are insisting on some percentage off of MSRP in what I assume is an attempt to hide the invoice price. Based on what I've read here, there is a 40% markup on these motorhomes, so the invoice price is pretty darned easy to calculate.

Is $5000 over invoice fair (or too much) on an MSRP of $585,000 for just brokering the deal? Or should I take another approach?

[Dav5942]

No, ain't goin' happen! Many pickup at the factory, if dealers had to give 39% off MSRP(which is what your price works out to-if indeed you were to get it for $5000 over a "invoice" which was 40% off MSRP) for factory pickups they would be out of business. If you can get 28% off MSRP you are doing good!

[TheJazzMan]

I'm not saying 40% off MSRP. I'm saying that there is a 40% markup from invoice. It's confusing and you need to run the numbers on a calculator, but a 40% markup from invoice is equal to a 28.57% discount off of MSRP. So what I would be asking for is 28.57% off MSRP + $5000.

In my case, let's say the MSRP is $580,000.
$580,000 * 28.57% = $414,294 (invoice)

$414,294 (invoice) + $5000 (profit) = $419,294

$419,294 is a 27.7% discount off of MSRP. I think $5000 may be too much. I would be better off playing the percentage game with a 28% discount.

[edgray]

Jazzman: have "they" told you there is a flat rate price you must pay for factory delivery? ED

[TheJazzMan]

Yes. I was adding that $1,898 into the MSRP. Should the fctory delivery fee not be added in when calculating the discount?

[Route 66]

The % off MSRP is how the Newmar game is played.

When I bought my DSDP, I had 5 dealers willing to discount 28% off MSRP, which is what others have found also. Some have reported up to 29% off MSRP.

That was 28% off the MSRP, with no $5K or other added profit.

You have to work down from the MSRP.

It's my understanding that the factory delivery price is not discounted, and you should be able to get the dealer to knock off the amount he would have in the dealer prep, according to what others have experienced.

If Newmar has rebates or dealer incentives, then more than 28% off is possible.

[Dav5942]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by TheJazzMan:
I'm not saying 40% off MSRP. I'm saying that there is a 40% markup from invoice. It's confusing and you need to run the numbers on a calculator, but a 40% markup from invoice is equal to a 28.57% discount off of MSRP. So what I would be asking for is 28.57% off MSRP + $5000.

In my case, let's say the MSRP is $580,000.
$580,000 * 28.57% = $414,294 (invoice)

$414,294 (invoice) + $5000 (profit) = $419,294

$419,294 is a 27.7% discount off of MSRP. I think $5000 may be too much. I would be better off playing the percentage game with a 28% discount. </div></BLOCKQUOTE>

Yes, you better stick with working with MSRP as if anyone really knows what the dealer is paying(true cost, minus incentives, etc.) they certainly ain't going to tell us! And don't believe for a minute the dealer is paying 28.57% off MSRP(they would all be out of business). You are getting confused by the math. It is not like the car industry where they have a bogus "wholesale" price list.

We did get our dealer to split the cost of factory pickup.

[GaryKD]

Randy,
You'll never get your price until you make a commitment to buy,,,,right now.

Determine what you are willing to pay. Let the dealers know if they will sell for your price you are willing to immdediatly sign the order and put down a deposit. Consider the following scenario.

You do need to be ready to sign and make the deposit. The dealer needs to know this. You may remember, when buying a car the customer signs the deal, with a deposit. Then the order is taken to dealership management for their signature. When I bought my coach it worked the same way. I was stalled for weeks on the price. I told the sales guy to fax me the order the way I wanted it. I signed the order, faxed it back to him and sent and email with authorization for the dealership to charge my cc with the deposit. The email included a 24 hour time limit from the date of the email. It also mentioned this was my best and final offer. Guess what, the dealership management signed the order!

Consider this scenario to close your deal. The customer needs to make the commitment first; otherwise the dealership has no incentive to lower their price.

When the dealership smells money they will sing a different song.

[soricobob]

I don't think it matters who you buy it from, just get the best price. After you pick it up at the factory you can determine where it will be serviced. I'd take the $5k over invoice deal and run all the way to Nappannee to pick it up! If you don't want to post it, PM me the name of the dealer who will do that.

[Spikester]

In my search for a factory ordered, dealer delivery Newmar last year, and from what I have heard from others Newmar deals, as well as other Motorhome Dealers, they all are pretty much locked into percentage off MSRP. 28% to 29% seems to be about the best you can get. Some have gotten what appear to be better/fabulous deals, but they are few and far between, and I am sure have all sorts of circumstances associated with them.

The original post mentions that you have one dealer that is willing to approach your order for $5,000 over invoice, if he has given you that total price for your coach then that should give you a pretty clear vision on what the invoice price. Then go to a percent below MSRP dealer offer him 72% of MSRP (28% off), or the same number you got from the other dealer, for the same coach, see what happens. See what number you settle on, compare it to the other dealer. Pick the deal that is best for you, don't forget to factor in dealers service reputation, as that could be worth a lot $$ to you in the end. I wouldn't get hung up on how you get to the bottom line. Either approach will get you really close to the same bottom line.

Spike

[TheJazzMan]

Based on my calculations above, $5k over invoice is like a 27.7% discount - not that great. Of course, that is assuming the markup over invoice is 40%. If you know something I don't or have seen an invoice, please PM me. I'm gettin' ready to pull the trigger with someone.

[Nathan Focht]

I only know of one place that I have run across that will give you a flat fee over "invoice". That is Tom Conerty at (303) 638-4998. He is a salesman for Lee's RV and he works on a flat fee to broker over the cost (whatever that is) from Lee's. If you have no trade, that is even better. Also, he des not mark up the options which will shave a few more dollars! Tell him I sent you please

[chuckpowerka4564]

My wife and I just recently purchased our latest coach, picking it up at the factory in Indiana, and we allowed our dealer a fair profit of $17,600, which was a mere 2.5% of the retail price.

Besides being a negligible amount to us, we consider the dealer's profit to be an investment in how we're going to be serviced throughout our ownership.

Our salesperson is very resourceful, has been in the RV business for 20 years, and has a Rolodex of contacts who can get us emergency service anytime, night or day. What is that worth to any serious RVer???

Before you go taking the advice of people who have owned one or two RVs, consider this. My wife and I are on our eighth luxury coach, and we have always paid the dealer a fair profit, which we believe to be 2.5% of the retail, and we have always received the best possible service.

Many of us luxury coach owners are retired businesspeople. I don't think very many of us would have settled on a business deal that would provide an ROI of less than 2.5%.

My wife tells me that there's nothing more nonsensical than a millionaire trying to save the equivalent of a dime.