Car Talk 6: Best of times and Worst of Times

[fledonfoot]

I still apparently have access to my Toyota Dealer system. There is $1020 of markup from invoice to MSRP on my GR. Cray.

[D Griff]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

[ChrisoftheNorth]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Actual margin to the OEM is way higher than that. That's just margin, and even that isn't the entire story.

[max225]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Margins are in the eye of the beholder. I am sure there are many other ways how the biz operates. No way in hell will any dealer stay afloat @3%. or whatever that is, and I don't mean they will make up for it in Service/parts etc. But there have got to be many other income streams. I'd guestimate the average is about 10-20 % in actual margin per vehicle.

[max225]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Such secret much wow

Margins are also measured differently. Internally I have 4 different "margins". It starts with something like 70% that the sales team uses which is fictitious BS. And it ends at around 10-15% which the company actually takes home past expenses.

[ChrisoftheNorth]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Margins are in the eye of the beholder. I am sure there are many other ways how the biz operates. No way in hell will any dealer stay afloat @3%. or whatever that is, and I don't mean they will make up for it in Service/parts etc. But there have got to be many other income streams. I'd guestimate the average is about 10-20 % in actual margin per vehicle.

It's probably all offset by vehicle mix, some are low margin, some are high (like trucks). Don't forget the doc fee too, there's an extra ~$500ish of 100% profit.

[D Griff]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Such secret much wow

Margins are also measured differently. Internally I have 4 different "margins". It starts with something like 70% that the sales team uses which is fictitious BS. And it ends at around 10-15% which the company actually takes home past expenses.

Well it varies greatly across many product categories. Speakers are a cash cow

And it is definitely complex... like we incur massive post sale technical support costs in some categories that margins like the 70% you mention way, way less.

[max225]

Such secret much wow

Margins are also measured differently. Internally I have 4 different "margins". It starts with something like 70% that the sales team uses which is fictitious BS. And it ends at around 10-15% which the company actually takes home past expenses.

Well it varies greatly across many product categories. Speakers are a cash cow

And it is definitely complex... like we incur massive post sale technical support costs in some categories that margins like the 70% you mention way, way less.

Yea no kidding. Which is why I don't look at margins without looking at the entire P&L. Especially when talking to sales. For them the "inked deal" is all but the actual take home is a shit show of multi tier discounting post sale/customer service expenses/returns/write offs/reserves etc. It is incredibly complex especially at a publicly traded company

[D Griff]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Margins are in the eye of the beholder. I am sure there are many other ways how the biz operates. No way in hell will any dealer stay afloat @3%. or whatever that is, and I don't mean they will make up for it in Service/parts etc. But there have got to be many other income streams. I'd guestimate the average is about 10-20 % in actual margin per vehicle.

I'm sure they make money in other ways, service, warranty sales, financing, other add-ons, etc. Still, it seems like if a savvy buyer comes in and just buys a vehicle and nothing else, they are making very little. It also seems like there is little room for commission in $1K, which sucks for the floor salespeople, they must not make dick as I imagine it would be near impossible to average more than like one car a day at best.

[D Griff]

Well it varies greatly across many product categories. Speakers are a cash cow

And it is definitely complex... like we incur massive post sale technical support costs in some categories that margins like the 70% you mention way, way less.

Yea no kidding. Which is why I don't look at margins without looking at the entire P&L. Especially when talking to sales. For them the "inked deal" is all but the actual take home is a shit show of multi tier discounting post sale/customer service expenses/returns/write offs/reserves etc. It is incredibly complex especially at a publicly traded company

Yep we went public earlier this year and I can see from a distance that the finance team is dealing with some major shit. No thanks, I will just live in salesperson fake world and be happy.

[Huckleberry]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Margins are in the eye of the beholder. I am sure there are many other ways how the biz operates. No way in hell will any dealer stay afloat @3%. or whatever that is, and I don't mean they will make up for it in Service/parts etc. But there have got to be many other income streams. I'd guestimate the average is about 10-20 % in actual margin per vehicle.

[razr390]

Margins are in the eye of the beholder. I am sure there are many other ways how the biz operates. No way in hell will any dealer stay afloat @3%. or whatever that is, and I don't mean they will make up for it in Service/parts etc. But there have got to be many other income streams. I'd guestimate the average is about 10-20 % in actual margin per vehicle.

I'm sure they make money in other ways, service, warranty sales, financing, other add-ons, etc. Still, it seems like if a savvy buyer comes in and just buys a vehicle and nothing else, they are making very little. It also seems like there is little room for commission in $1K, which sucks for the floor salespeople, they must not make dick as I imagine it would be near impossible to average more than like one car a day at best.

9.9/10 people are not savvy buyers.

[SAWCE]

I'm sure they make money in other ways, service, warranty sales, financing, other add-ons, etc. Still, it seems like if a savvy buyer comes in and just buys a vehicle and nothing else, they are making very little. It also seems like there is little room for commission in $1K, which sucks for the floor salespeople, they must not make dick as I imagine it would be near impossible to average more than like one car a day at best.

And the only sees a paycheck on the front end gross profit, which is basically negligible, assuming there's any to begin with. Back end gross isn't even considered in most cases when determining a 's pay.

I'm so fucking glad I got out and I really don't want to go back.

Still doing the landscaping instead? I wouldn't mind doing something like that. Nice to have a physical project/thing you can see and be proud of at the end of a work day.

[SAWCE]

Still doing the landscaping instead? I wouldn't mind doing something like that. Nice to have a physical project/thing you can see and be proud of at the end of a work day.

We're basically done for the year - anything we do right now is on the weekends, which haven't been conducive to work due to weather.

I'm selling performance parts here and there, but otherwise I've been job searching.

I'm not sure I feel like a 3rd year of landscaping; I love the physicality of it, but I'm starting to feel like if I continue down this path too long, I'm gonna smooth my brain out.

Ah, yeah I get that aspect too. You did a killer job on that porch overhaul, and learned some of what seems to be like with Jersey building codes.. could go into some sort of general contracting. Get to use your brain a little more than just landscaping, and can take indoor projects when needed for weather. Skilled labor always going to be in demand.. although I guess you could run into the problem you've worried about with doing detailing as a business where your need to do things correctly and to your level of perfection would possibly make it not worth your time if you can't find people willing to pay for that level of expertise and detail.

[fledonfoot]

Margins are in the eye of the beholder. I am sure there are many other ways how the biz operates. No way in hell will any dealer stay afloat @3%. or whatever that is, and I don't mean they will make up for it in Service/parts etc. But there have got to be many other income streams. I'd guestimate the average is about 10-20 % in actual margin per vehicle.

It's probably all offset by vehicle mix, some are low margin, some are high (like trucks). Don't forget the doc fee too, there's an extra ~$500ish of 100% profit.

For comparison's sake, there is $2100 of markup on a Rav4 Prime with a $50k MSRP.

[ChrisoftheNorth]

Still doing the landscaping instead? I wouldn't mind doing something like that. Nice to have a physical project/thing you can see and be proud of at the end of a work day.

We're basically done for the year - anything we do right now is on the weekends, which haven't been conducive to work due to weather.

I'm selling performance parts here and there, but otherwise I've been job searching.

I'm not sure I feel like a 3rd year of landscaping; I love the physicality of it, but I'm starting to feel like if I continue down this path too long, I'm gonna smooth my brain out.

Interdasting. Check your e-mail homie.

[ChrisoftheNorth]

It's probably all offset by vehicle mix, some are low margin, some are high (like trucks). Don't forget the doc fee too, there's an extra ~$500ish of 100% profit.

For comparison's sake, there is $2100 of markup on a Rav4 Prime with a $50k MSRP.

Wow, more than I'd expect. I figured the Prime would be a money loser because of the tech.

[Desertbreh]

Wow that margin fuckin' blows... I won't divulge average margin for the biz I work in, but it is many X that, and I would think less overhead than a brick and mortar

Such secret much wow

Margins are also measured differently. Internally I have 4 different "margins". It starts with something like 70% that the sales team uses which is fictitious BS. And it ends at around 10-15% which the company actually takes home past expenses.

Many stories. Wow.

[Desertbreh]

Still doing the landscaping instead? I wouldn't mind doing something like that. Nice to have a physical project/thing you can see and be proud of at the end of a work day.

We're basically done for the year - anything we do right now is on the weekends, which haven't been conducive to work due to weather.

I'm selling performance parts here and there, but otherwise I've been job searching.

I'm not sure I feel like a 3rd year of landscaping; I love the physicality of it, but I'm starting to feel like if I continue down this path too long, I'm gonna smooth my brain out.

I like this analysis.

[ChrisoftheNorth]

We're basically done for the year - anything we do right now is on the weekends, which haven't been conducive to work due to weather.

I'm selling performance parts here and there, but otherwise I've been job searching.

I'm not sure I feel like a 3rd year of landscaping; I love the physicality of it, but I'm starting to feel like if I continue down this path too long, I'm gonna smooth my brain out.

I like this analysis.

I'd kinda like some brain smoothing, personally. Might make life easier in total.

[razr390]

I like this analysis.

I'd kinda like some brain smoothing, personally. Might make life easier in total.

Sometimes ignorance is truly bliss. bout anything or anyone and just enjoy what makes you happy.

[SAWCE]

I'd kinda like some brain smoothing, personally. Might make life easier in total.

Sometimes ignorance is truly bliss. bout anything or anyone and just enjoy what makes you happy.

I try to live in this space enough to be comfortable and happy. Some realism is needed, but only enough to advance when I want to in my career.

Edit: and keep Michelle happy Caring about that has proven to make life easier.

[razr390]

Sometimes ignorance is truly bliss. bout anything or anyone and just enjoy what makes you happy.

I try to live in this space enough to be comfortable and happy. Some realism is needed, but only enough to advance when I want to in my career.

Edit: and keep Michelle happy Caring about that has proven to make life easier.

I have my own struggle with this. Life is definitely easier not if you just but rather direct care at things that actually require it. Prioritize care allocation basically. Things that used to bother me when I had no life experience living at home off parents’ teet no longer matter to me now as a person with my own family, etc

[D Griff]

I'd kinda like some brain smoothing, personally. Might make life easier in total.

Sometimes ignorance is truly bliss. bout anything or anyone and just enjoy what makes you happy.

It's why I get more and more miserable with each passing year of life, despite having way more.

[D Griff]

Still doing the landscaping instead? I wouldn't mind doing something like that. Nice to have a physical project/thing you can see and be proud of at the end of a work day.

We're basically done for the year - anything we do right now is on the weekends, which haven't been conducive to work due to weather.

I'm selling performance parts here and there, but otherwise I've been job searching.

I'm not sure I feel like a 3rd year of landscaping; I love the physicality of it, but I'm starting to feel like if I continue down this path too long, I'm gonna smooth my brain out.

I really enjoy that sort of work but I hear you. I would have a hard time doing it forever. I used to work a golf course summers in college. It was an awesome mental brake to just get outside and work for 2-3 months and not worry about engineering classes and whatnot. I would love to do it on a seasonal basis if I could somehow quit my job for 90 days and have it waiting for me when I was finished with the summer work.