What is the average dealer mark up?

big_greg...

I do not know how you did it.  But you found a way to disagree with me by essentially agreeing with what I said.  I forgot one word to add to the list. Which was a given. 

@millercarbon Cars generally have 10 to 15% margin. This excludes Holdback which is as little as 2% or as much as 5% Most of a dealers profit comes from parts and service. 

I wasn't disagreeing, but now I am.  I elaborated on what you said as you vastly understated the expenses that go into running a business.

No wonder manufacturers are selling directly more than ever these days.. they can lower their price and still make more money.  

I am a small business owner, specializing in a high end custom home improvement product with an average sale price of around $2K.
My gross profit margin is around 75% on average.  
This sounds like a lot or profit until you factor in all of the overhead costs.  I won't list all of these here as several others already have.  
My gross sales per year are around $1 million and at the end of the year if we've done a good job I can expect about $50K additional income above my salary.  This might also sound like a lot but for the amount of risk I take in owning the business it's really not that much.  
I get a lot of customers who come into my shop asking me to match a competitor's price, and I never bend on price, knowing that my product and service are much better than the other guys.  The best audio dealers are the ones who understand their value to the customer based on their market position and their overall service offerings.  
Prior to starting my business I had considered a high end audio shop.  After running my current business (successfully) for 5 years and having a deeper understanding of all the costs involved in running a B&M business, there is no way I would start an audio store.  I honestly don't know how several local shops in my town have stayed in business as long as they have.  There are two shops in my town that have been around for more than 30 years.  
My guess is that they have developed a strong customer base who are repeat customers, and provide great service.  They also offer consignment sales, which they get 30% of the sale price with no inventory cost involved.  Some of them also sell audiophile vinyl and used records to add some extra revenue.  
I like to get a discount on large purchases, but if I ask for one from a dealer I offer them something in return.  For example, I offer to pay cash rather than credit card.  Many dealers are very receptive to this as even the 3% cost of taking credit cards is a lot.  If they offer a 10% discount and also have to pay a 3% fee that really hits them hard.  
We live in a free market and everyone wants a deal.  It's not a crime to ask for a discount but it is important to understand how expensive it is to run a business when asking a B&M dealer for a price break.  This discussion is valuable (IMO) for the reason that we should all use this info to seek win-win scenarios.