Some great stuff happening over at AM of DC.

 

I own and operate a high-end furniture store and customers approach me with profit questions all that time - many are bold enough to do so. They try to determine how much they think they should be paying for a piece based on what THEY think is a appropriate profit margin. Fact of the matter is, only those that operate a retail business know the costs involved of doing so and its none of the customer's business how much profit the dealer makes - the customer only needs to be concerned on his perceived value for the money for the item they are considering buying.

Costs to own and operate a brick and mortar retail business are very high and the only way to stay in business is to meet your net profit margin goals at the end of the year - its all about percentages which is pretty much in any business when you come right down to it. In my business, I price at 40% gross profit margin which at the end of the year - if I had no extravagant costs - nets me 15% of gross sales. On a million dollars that's $ 150K before personal taxes.

I looked pretty hard into starting up a BMW Motorcycle Dealership as my passion is motorcycles (see avatar!) yet couldn't make the numbers work because the profit margins are too slim for the capital outlay. BMW wanted a dealership in Loudon County, VA ( and they still do) but after appx. $ 1.5 Mil in capital startup costs for a small, barebones dealership with just one Certified BMW mechanic (required) and one parts person and one office manager, the ROI to the owner of the store if the shop met BMW projected sales targets was about $ 80,000 per year. That's a lot of sweat equity and start-up cash outlay for not much reward and the reason that dealership is still available. Motor Vehicle sales is a tough business in spite of the fancy showrooms you see.

Many retailers feel the pressure from customers to lower prices - its constant and never-ending. Those that surrender their margins to increase turn and try to generate cash flow can't - and won't stay in business. It does no one any good when a business fails or becomes unstable financially - you want that dealer to prosper so they will be there for you and add to the community base as well (brick and mortar stores pay a lot of taxes).

Want to help out a dealership or retailer? Pay in cash or with a check. In today's world everyone uses credit cards as they all come with convenience or rewards programs. The merchant pays a fee on each transaction and the more aggressive the rewards program, the higher the fee. Am Ex is the worst, the should supply a tube of K-Y to each merchant the way they screw us over with fees, which are typically 2.5 % to 3.5% of the transaction amount. Years ago - back in the 80's - credit cards were only about 15% of the transactions, now they are 90%. That 3% average rate has to come from somewhere and its packed in the margin these days whereas 20 years ago it wasn't.

Customers object if they see my Aston Martin parked outside my store and let me know it, too. In truth, my 2007 Vantage is worth what?...the same as their fully optioned Chevrolet Suburban they just pulled up in but their perception is that I'm driving a $ 150,000 car and therefore overcharging them. That's why my Aston almost never goes to the store and I either ride a motorcycle or take my 14 year-old beater F-250. They like it when they know I drive a $ 3K pickup truck, that's OK.

Conscious of what it costs to own and operate a B&M Business, I never beat-up a dealership when I buy a vehicle, either I'm willing to pay their price or I'm not - if the latter I leave with a smile and a handshake an tell them to call me if they get closer to the price that I can afford, and leave it at that. As a buyer you certainly should do due diligence and shop around to get your best deal overall, but don't beat on a retailer because you think they are making too much money - its bad form and shows that you don't know the costs involved in running a business.

Sorry for the long post - as you can see, I get beat up a lot....lol

 

It was an outstanding post.

 

Do you work there or did you just opt. not to follow-thru with the purchase?

 

Agreed...
NOTE: The average franchised automobile dealer made just 2.5% on gross total annual sales thru October 2013 which isn't a great ROI. (NADA Average Dealership Profile). Which is up from December YTD 2012@ 2.2%. The actual year end net will probably settle to 2.3% after the December 2013 write-downs. The car business seems glamorous on the outside looking in, however it's a daily grind and a remarkably difficult way to earn a living.

 

There were some issues with my order and it wasn't exactly to spec the way I wanted it. It's unfortunate, but hopefully someone else can enjoy it

 

This one is a wrap. She's in the garage safe and sound. I had some paint correction done (swirls in the paint), and I had it washed and detailed.

We've knicknamed her, a believe appropriately, "The Beast"!!!

I've got some iPhone pictures but I want to break out the DSLR and take hi-res pictures.

Btw, I see nothing in the owners manual about a "breakin-in" period??

 

Congrats. I'm still waiting. Hopefully it will come in by the end of August. As soon as it gets delivered I will take it straight home and work on polishing out all the sanding and swirl marks and then put some kind of coating on it. I'm surprised the cars leave the factory with the paint looking the way it does. I was at the dealership yesterday and the Jags are even worse. Every F-Type had a ton of orange peel on the paint.

BTW: the ECU automatically limits the max revs during the first 1243 miles.

 

Luckily the paint work wasn't that bad. The car just had some swirls in the rear quarters behind the c-pillar.

Some observations. The reverse in this car is a bear. I have a sloped driveway and we always reverse our cars into it. I now go in head first since I've smelled "clutch" a couple of times after backing the car in.

Oh yea, thanks for the heads up on the rev limiter that's implemented by the ECU. Seems I can just drive and not worry about. One thing, boy this car sure comes alive once the revs go past 4k RPMS!!!

 

Awesome, congrats!!

 

Congrats
That is something you want to avoid

 

Congratulations, enjoy it in good health. I'm sure Mehdi took good care of you.

 

Still waiting for the pictures. Otherwise you may have to be banned from the forum.

 

Sorry, busy. Real life does call after all! I tried taking a couple last night in the garage but the lighting did strange things to the pictures using a prime lens.

 

Here's a sneak peak.

Drove her up from DC, and got some color/paint correction performed the next morning.