Why can you buy a car at dealer Invoice but audio

Jmcgrogan2,

I do know one dealer that will give me 20% but absolutely no service. Cash and carry only. If the unit is broken you will have to send it back to the manufacturer. If you don't like it to bad. If you need help with it your on your own. On top of that the guys an arrogant prick.

It's amazing the dealers only make 40%.
03-21-13: Taters

Taters,

They don't make 40%

From the remaining 40%

Deduct shipping cost.

Deduct overhead costs.
Rent,
utility bills,
Phone bill,
Yellow page ad,
liability insurance,
content fire insurance,
wages,
FICA taxes,
Unemployment insurance,
local, state, federal income taxes,
Health insurance?

The Banker? The dealer may have a line of credit with a bank. Manufactures require payment upfront before shipping product.

deduct discount to customer, if any?.....

Like I said the dealer is lucky if he makes 5% to 10% profit.

That means the manufacturers are making most of the money.

High quality parts aren't cheap....

In some cases there is middleman, the distributor, he also gets a cut.
.

if you buy direct you can usually get better value for your money.

In new car sales they will usually wiggle a lot. Used cars are where the money in cars is. Prices they buy cars at auction are ridiculously low. Even if they discount used for you they make a ton.

Dealer I worked for told me 60% of their profit came from service alone, parts, used then new, contributed to profit, in that order.

And as others have said, do not forget finance, accessories, warranties and the all important "undercoat!" Great comment Isochronism!

Audio, haven't got a clue.

Best,
Dave

It's amazing the dealers only make 40%. That means the manufacturers are making most of the money. As an example a piece that retails for 1000.00 cost the dealer 600. It probably cost the manufacturer 200.00. That's a 300% markup. It looks like if you want to be in the high end audio business today manufacturing is the way to go.

Taters, you need to take a basic business class.