Discussion
Here's the question.
A dealer charges say £400 for a water pump (part only) and says that they just pass on the part price from AML and don't make a profit on parts. Then of course you pay to get it fitted.
But then each month the dealer receives a bank transfer equal to 20% of the price of all the parts they have bought. So in this case the dealer gets £80 back from AML.
Is this what happens? (the percentage may not be 20%, looking more at the behaviour).
Any comments from those folks who know people in the trade?
A dealer charges say £400 for a water pump (part only) and says that they just pass on the part price from AML and don't make a profit on parts. Then of course you pay to get it fitted.
But then each month the dealer receives a bank transfer equal to 20% of the price of all the parts they have bought. So in this case the dealer gets £80 back from AML.
Is this what happens? (the percentage may not be 20%, looking more at the behaviour).
Any comments from those folks who know people in the trade?
Certainly not how it works in North America. The dealers are sold the parts at fixed discounts off of Recommended Retail Pricing. % Discount varies depending upon the parts, but usually between 20 & 30%.
That is a relatively small margin for main dealers to make on parts compared to say, Mercedes. So some dealers will use matrix pricing, whereby they add some margin to the RRP. Usually less on large ticket items and more on smaller ones.
I've never heard of dealers selling parts as a pass through and getting their margin in a monthly commission though. Sometimes there are extra incentives or rebates.
That is a relatively small margin for main dealers to make on parts compared to say, Mercedes. So some dealers will use matrix pricing, whereby they add some margin to the RRP. Usually less on large ticket items and more on smaller ones.
I've never heard of dealers selling parts as a pass through and getting their margin in a monthly commission though. Sometimes there are extra incentives or rebates.
Dealers will get a discount on the parts depending on quantities. Clearly oil filters will be purchased in greater numbers than V8 superchargers so the discount will be higher.
In the past, where dealers of other marques have been seen to sell at cost price, Vauxhall being a particular example, then the dealers will get a "sweetener" of a percentage of the cars they sell. BMW have also given extra discount if the dealer shifts over a certain number of cars, and thats why you often see dealers with substantial numbers of "demonstrator" cars.
Ford buy their own cars and register them to get the sales figures up and get first place in the sales of cars in any category. Then put them in a field to rust.
AM could offer similar schemes to their dealers but be certain, they do not sell parts to you at their cost!
In the past, where dealers of other marques have been seen to sell at cost price, Vauxhall being a particular example, then the dealers will get a "sweetener" of a percentage of the cars they sell. BMW have also given extra discount if the dealer shifts over a certain number of cars, and thats why you often see dealers with substantial numbers of "demonstrator" cars.
Ford buy their own cars and register them to get the sales figures up and get first place in the sales of cars in any category. Then put them in a field to rust.
AM could offer similar schemes to their dealers but be certain, they do not sell parts to you at their cost!
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