After two recent controversial articles looking at improving the sales experience from the point of view of the customer and dealer, Motorbike Writer contributor and ex-dealer Marty Thompson gives his tips for getting the best deal:
A recent discussion on Facebook after those two MBW articles from a disgruntled female potential bike purchaser has prompted me to write a little about getting the best deal on a new or used bike purchase from a dealer. The person had complained that she had been ignored and the salesperson was misogynistic. While I cannot confirm nor deny that it was fact, I have seen the exact same behaviour from both female and male bike sale people over the years. Now, this article is not written to criticise bike sales people, who for the most part I believe get a bad wrap for various reasons. Having been in the industry all my life from humble beginnings, right through to general management and manufacturer and distributor training, I have seen both sides of the coin. So while it can be said that there is a proportion of poorly trained and behaved sales staff, there are also perhaps greater numbers of poorly behaved customers. If you believe the adage that the customer is always right, then you are most likely also someone who potentially may think this gives you the right to be rude to sales staff. Please, let me assure you, this is not the best way to obtain a fair deal. In fact, when I was at the coal face, those were the people who I always made the most money from. If a salesperson has to deal with an arsehole, then they need to be remunerated accordingly. The most polite customers were always treated fairly and looked after if there was a problem post sale. Let me assure you, the arseholes were never offered a loan bike or any other favours if a warranty problem occurred. So, to start with, be nice.
But, what is a good deal? If you are the sort of person who would go and buy a bike from another dealer that is not local to you for the sake of $50, $100 or even $250, then you may as well stop reading now. You are the sort of person that a salesperson hates. They spend hours and hours of their time with you, give you all the information you need and then, you reward their efforts by buying elsewhere for a pittance. If that’s you, just remember, come warranty claim time, especially if the claim is borderline, you won’t be looked after. That is not to say, that a customer should expect to have to pay full retail price for a bike. It is after all 2016 and no one buys at full retail price anymore. You expect to be looked after. Given a deal. For the dealer to want to win your business with a fair price for both them and you and with polite and efficient service.
So, you have already determined that you want a bike. Plus, you have narrowed it down to a few possibles and maybe even one that really ticks all the boxes for you. Or alternatively, you have been pragmatic and taken a logical approach and arrived at a short list based on needs and maybe even some wants. Now it is time to take the step towards buying a bike.
Before entering or contacting a dealership, ensure you do some research about the potential bikes you are considering. Check out the advertised prices across print and electronic publications and classifieds. This will give you an understanding of what they are being advertised for. Remember though, that an advertised price, will rarely be the final price agreed to by you and the seller. Be that a private sale, or dealership sale. Let’s assume you have done due diligence and you know what’s available and you know what prices are being advertised. Then it’s time to go shopping.
While I would love to tell you that dealers make thousands out of each bike they sell, the realities are far from that. Top line bikes, even the hot sellers often sell with little to no profit in them. That’s not to say that there is no room for negotiation. It just means that based on your research, you will know when a dealer is trying hard to earn your business, as they will have exhausted their available profit margin in an attempt to earn your business. But, expecting a $5000 saving off a new or current model bike is fairy land stuff. Maybe on a $30,000+ bike which is being run out with some factory bonuses sure. But on most new bikes, the margins are very slim. I know most think this is not the case, but an available margin on a new bike varies from about4-7% of the retail price for most brands. So a $10,000 new bike, may only have a $400-$700 margin. Sometimes a little more, often a lot less. Bike dealers are not getting rich off selling you a new bike, trust me. I’ve seen the books! They are attempting to create service, parts, accessory and finance and insurance opportunities. Maybe trading in a good used bike they might make $1000 on after negotiations. But selling bikes isn’t going to make you rich. Believe me, don’t believe me I don’t really care, but having run dealerships, both two and four wheeled ones, I can tell you that the new vehicle sales department loses money almost every single month. Without the other dealership departments, there would be no dealerships as they would all be broke. Be aware also, that sometimes a factory offer will leave little or often nothing in the deal for the dealer. The hope being that you may finance the bike with them, or perhaps purchase some accessories. Both of which means they have an opportunity to make a profit. If you have done your research, then it is going to be easy for you to know if it is the bottom line, or the sales guy is holding out for a bit more profit. Once again, knowledge is power when negotiating.
Be as honest as you can. Sales people have built in bullshit detectors and can smell an answer which doesn’t sit right. If you have done your research, you will know confidently what a good deal is, so there is no need to lie. Be frank and open. Tell the salesperson what you want to buy and that you are there to negotiate the best price. If satisfied, you are ready to sign. That is not to say that you will buy it from them if they offer you their best price. It’s all about you being satisfied that it is. While on the subject of being truthful, if you have read one of those books that says don’t tell the dealer about your trade in until you have worked out a price on the new bike, forget it. Your used bike is worth what the market place dictates. Sure, you might again be able to negotiate a little more for it, but it is worth what it is worth, no more and no less. Don’t be silly by looking at similar bikes that are advertised privately with similar kilometres, age and condition to yours, pick the highest priced examples and expect that for yours. You’re just going to end up frustrated and disappointed. A dealer can only sell your bike for what it is worth in the market place. Perhaps a little more than private as it may come with a warranty and be workshop checked and prepared. Good dealers can spend an average of $800 preparing a used bike for sale. Owners often don’t see the little things that need doing to a bike and of course, because we know our own bike, we think it is the best in the world. But trust me, even the best looking bikes often need money spent on them. But don’t spring the trade in on them after negotiations. It’s not being truthful and I am pretty confident that if a sales person lied to you in that manner, it would leave a very sour taste in your mouth.
The next thing I would highly recommend, is to actually develop a relationship with one dealer. I know that the easiest sales over the years are to those customers who are repeat customers. As a salesperson, you know that if you look after them, they will buy and you have no hesitation giving them a great price as you know if you do, they will buy now. So get to know a dealer. Buy from them regularly. Accessories, parts, servicing. Then when it comes time to buy a new bike, I bet London to a brick you will be looked after. I know those dealers which I have developed long term relationships with, always looked after me. A phone call to buy a bike was usually a 5 minute affair, culminating with me giving them a credit card deposit over the phone and going in a few days later to sign the documents. Simple and easy for both parties and I never got ripped off. Again, knowing a good deal from a bad deal was the key. Today, this information is very simple to obtain, just do a few hours internet surfing and you will know what is and what isn’t a great deal.
Now, I am well aware that not all dealers have professional sales staff and even within one shop, there can be great sales staff and absolute plonkers who should have got out of the business in 1974. So don’t accept poor behaviour. Any sales person who is evasive or especially uses that old line when asked for a price, “I can only give you a price if you are buying it now”, just walk away. That crap went out of the car industry in the 1980s. But there are still some relics who persist with this style of approach despite the fact that it just no longer works. A professional sales person will be more than happy to offer you a good price, once they have worked out exactly what you want and when you want it. Keep your eye out for manufacturer runouts or sales programs where they offer price or add on incentives for bikes sold and delivered by a certain date. Pushing forward your decision may save some additional money in these circumstances. Also, if you need new gear, it is another avenue for negotiations. You may save that $500 that is stopping you from saying yes, by throwing in a new suit, helmet, gloves or boots into the negotiations. Sometimes there is more margin in the accessories, than there is in the bike they are selling. Finance and insurance can also be another avenue for price concessions which may sway your decision.
Whatever you do, try not to let a poor experience from a sales person taint your next interaction with the next sales person. remain polite and you are far more likely to be looked after than by being rude.
Marty Thompson’s Bio:
In terms of industry experience, I was the National Sales, Sales Manager and Service trainer for Subaru Australia for eight years, as well as Chrysler Jeep Australia/NZ. My last position was Group Training & Development Manager for the Stillwell Motor Group in Melbourne for two years. Prior to that, I ran Cosway Kawasaki in the mid ’90s and was the new vehicle manager for Ken Morgan Toyota in the early ’90s.
1988-92 Bayford of Preston new and used vehicle sales
1992-1994 – Ken Morgan Toyota Nunawading Victoria- New Vehicle Manager
1994- WFO distributors- Dealer representative
1995-1996 Cosway Kawasaki Melbourne- New and used sales, accessories, spare parts.
1997-2009- Auto Inspirations- Managing Director- Sales training, Recruitment, Marketing & retail development for the automotive industry. National trainer for Subaru Australia Sales, service and management, Chrysler Jeep Australia/New Zealand, National trainer Inchcape Automotive Retail sales, service & management, National Trainer QBE Insurance automotive division, as well as sales & management training and retail development for hundreds of automotive Dealerships nationally.
2009-2011- Group training and retail development manager Stillwell Motor Group Melbourne.