Stark actually profitable... kinda

[happyinmotion]

Wait, what?

What's a dealer markup?

I'm in NZ and the price is the price. I can order direct for NZ$17,900 or go to the dealer and pay $17,900. How can it be different?

 

[Erwin P]

Wait, what?

What's a dealer markup?

I'm in NZ and the price is the price. I can order direct for NZ$17,900 or go to the dealer and pay $17,900. How can it be different?

Same here.

 

[AL_V]

Wait, what?

What's a dealer markup?

I'm in NZ and the price is the price. I can order direct for NZ$17,900 or go to the dealer and pay $17,900. How can it be different?

The price to the consumer may be the same, but that means that Stark is providing some discount to the dealers so that they can make a profit from the sale.
So it's better for Stark to sell direct.
In the US, (in general) dealers may provide a discount, sacrificing some of their profit to make a sale.
On rare occasions, a dealer may ask for more than the official "sticker price" if demand is high and supply is scarce.

 

[Patrick Verner]

The USA is huge market and the AMA is doing everything they can to sabotage Stark. How do you sell a race bike that you can't race? Without AMA insurance, most tracks couldn't afford to have races. Most tracks are AMA in this country.

 

[Chaconne]

The price to the consumer may be the same, but that means that Stark is providing some discount to the dealers so that they can make a profit from the sale.
So it's better for Stark to sell direct.
In the US, (in general) dealers may provide a discount, sacrificing some of their profit to make a sale.
On rare occasions, a dealer may ask for more than the official "sticker price" if demand is high and supply is scarce.

Wait, what?

What's a dealer markup?

I'm in NZ and the price is the price. I can order direct for NZ$17,900 or go to the dealer and pay $17,900. How can it be different?

As @AL_V says in the US resellers have flexibility to markup or markdown depending on supply/demand. Having a corporation fix a price and make everybody pay the same would hamper the free market in the US and also disrupt inventory control especially if local markets changed (NY's economic condition might not be in the same state as CA for example).

In the US Corporations try to fix prices but are often threatened with breakup for monopolistic behavior or worse price-fixing illegalities. Some price fixing is allowed for utilities in some areas but that is typically on a state by state basis. That is the theory at least, in practice well like everything it is a mixed bag.

 

[Beagle]

As @AL_V says in the US resellers have flexibility to markup or markdown depending on supply/demand. Having a corporation fix a price and make everybody pay the same would hamper the free market in the US and also disrupt inventory control especially if local markets changed (NY's economic condition might not be in the same state as CA for example).

In the US Corporations try to fix prices but are often threatened with breakup for monopolistic behavior or worse price-fixing illegalities. Some price fixing is allowed for utilities in some areas but that is typically on a state by state basis. That is the theory at least, in practice well like everything it is a mixed bag.

Not just between states though, is it? Like you could go to 2 KTM dealers in the same state and get 2 different quotes for the same brand new bike, right?

 

[Erwin P]

Here you actually can get a lower price on the bike compared to official numbers, but never higher.

 

[AL_V]

Not just between states though, is it? Like you could go to 2 KTM dealers in the same state and get 2 different quotes for the same brand new bike, right?

Right, each dealer can offer a discount (or price above "Suggested Retail") of varying degree.

 

[Chaconne]

Not just between states though, is it? Like you could go to 2 KTM dealers in the same state and get 2 different quotes for the same brand new bike, right?

Right that is correct, I was using the state example for illustration. 2 dealers across the street from one another could give different quotes and many times in some retailing they shop each other and deliberately undercut each other's prices.

Capitalist hardball is still played in many industries. Of course, there are utilities and healthcare that play by different rules in the US because downturns in those things could be more catastrophic than a few $k on a dirtbike.

 

[Chaconne]

Right, each dealer can offer a discount (or price above "Suggested Retail") of varying degree.

This is true but the "varying degree" is more like business pressure rather than an legal pressure. In fact, price fixing can be illegal in the US, though it is mostly big guys who can afford lawyers to bring cases that will pay them out.

Yet we also have a tradition in the US of seeking out alternatives if we don't like prices since we have the expectation that there will be variances to take advantage of rather than expecting that a fixed price is mostly what we get. MSRP is often a badge of dishonor.

I have found this as a cultural difference between Americans and Europeans in my work --we don't expect to pay MSRP and often it is the opposite in Europe..

 

[Chaconne]

Here you actually can get a lower price on the bike compared to official numbers, but never higher.

Supply and demand can cause higher or lower here. OEMs try to stop it but they are usually overwhelmed when markets soar or crash --and that is when you find the most variation.

 

[Erwin P]

Lower price is often negotiated. Higher however not. When a dealer goes higher it will cost them their name. Also being a so tightly packed country they can't up the price without the risk of customers just going to the other dealer.

The 2 farthest towns are 4,5 hours apart, but it wil be hard to have 2 dealers more than 1 hour apart.