What's Up With Chicago BMW? - BMW Luxury Touring Community
 
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post #1 of 10 Old Apr 2nd, 2009, 2:28 pm Thread Starter
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What's Up With Chicago BMW?

I've bought a lot of parts from Chicago BMW because they were significantly cheaper than other dealers. However, checking on some items lately, I found that they are now priced the same as other BMW dealers, much to my dismay. How were they able to sell cheaper in the first place, and what happened to make them change? I don't know the answer to the first question, but I suspect that other dealers complained or BMW Motorrad stepped in to make them change their prices to be the same as everybody else.

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post #2 of 10 Old Apr 2nd, 2009, 2:34 pm
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Re: What's Up With Chicago BMW?

my two guesses would be that they ran out of a "bulk purchase" (they bought more - got a better deal - passed it on to you) OR their overhead just caught up with them......

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post #3 of 10 Old Apr 2nd, 2009, 2:46 pm Thread Starter
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Re: What's Up With Chicago BMW?

Quote:
Originally Posted by Turkus
my two guesses would be that they ran out of a "bulk purchase" (they bought more - got a better deal - passed it on to you) OR their overhead just caught up with them......
I think it has to do more with dealers complaining and BMW Motorrad stepping in. Why else would everybody's prices be exactly the same now? Besides, some of the parts I bought were not that common replacement parts and they were still discounted, so that blows a hole in the bulk purchase theory.

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post #4 of 10 Old Apr 2nd, 2009, 3:14 pm
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Re: What's Up With Chicago BMW?

Quote:
Originally Posted by tonyn1
I think it has to do more with dealers complaining and BMW Motorrad stepping in. Why else would everybody's prices be exactly the same now? Besides, some of the parts I bought were not that common replacement parts and they were still discounted, so that blows a hole in the bulk purchase theory.
There really aren't any bulk purchases on parts with BMW. All dealers pay the same price for parts (we can get a small deal on pre-season orders of apparel if the order is large enough)


The simple fact is they couldn't sustain those discount prices and stay in business...

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post #5 of 10 Old Apr 2nd, 2009, 3:26 pm
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Re: What's Up With Chicago BMW?

Just guessing that they were still netting 20% after the discounts with a much better volume than the average dealer. That is a very good way to make money. Turn your (parts) inventory (where the real money is) often at a fair markup and it is like printing money.

How much pressure could the other dealers put on a single dealer other than refuse dealer transfers of product?

I had the misfortune to own an interest in a heavy truck dealership for a short time long ago and found that selling big trucks was just the means to sell the purchasers parts later on. Internal parts sales to the repair department was a nice profit center also. If the new truck sales department did not take too big of a monthly hit or if by some miracle it actually made money AND the parts department was humming - it was a money machine.

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post #6 of 10 Old Apr 2nd, 2009, 3:36 pm
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Re: What's Up With Chicago BMW?

I called and they are still offering 20% discount on BMW parts and apparel.

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post #7 of 10 Old Apr 2nd, 2009, 4:01 pm Thread Starter
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Re: What's Up With Chicago BMW?

Quote:
Originally Posted by lnowell

How much pressure could the other dealers put on a single dealer other than refuse dealer transfers of product?
The other dealers would complain to the parent entity, BMW Motorrad, who may have a say over retail price, since every dealer has the same exact price. Chicago BMW, until just recently, was the exception.

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post #8 of 10 Old Apr 2nd, 2009, 4:04 pm Thread Starter
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Re: What's Up With Chicago BMW?

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Originally Posted by gglove
I called and they are still offering 20% discount on BMW parts and apparel.
They don't have those prices on their website like they used to. I'll have to call to see what's up.

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post #9 of 10 Old Apr 2nd, 2009, 4:08 pm
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Re: What's Up With Chicago BMW?

Quote:
Originally Posted by lnowell
Just guessing that they were still netting 20% after the discounts with a much better volume than the average dealer. That is a very good way to make money. Turn your (parts) inventory (where the real money is) often at a fair markup and it is like printing money.
The actual margin after overhead costs (labor, rent, insurance etc) is a fraction of the 20% gross.

Quote:
Originally Posted by lnowell
How much pressure could the other dealers put on a single dealer other than refuse dealer transfers of product?
NONE

Quote:
Originally Posted by lnowell
I had the misfortune to own an interest in a heavy truck dealership for a short time long ago and found that selling big trucks was just the means to sell the purchasers parts later on. Internal parts sales to the repair department was a nice profit center also. If the new truck sales department did not take too big of a monthly hit or if by some miracle it actually made money AND the parts department was humming - it was a money machine.
If it was a money machine why the misfortune?

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post #10 of 10 Old Apr 3rd, 2009, 9:13 am
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Re: What's Up With Chicago BMW?

Quote:
Originally Posted by Ted Shred
The actual margin after overhead costs (labor, rent, insurance etc) is a fraction of the 20% gross.

Once you have covered your overhead, which includes rent, insurance etc - the incrimental cost of service labor is minimal. Volume is key in a retail business unless you have a 400% margin and adequate volume.

NONE



If it was a money machine why the misfortune?
It was a money machine - for the previous owner. Audit found about $250,000 of inventory missing (covered up) and the guy that sold me the business had to buy it back - on the court house steps. Still, it was a very expensive lesson at a time I did not need an expensive lesson. The strange part was the guy was making a bunch of money without raping his own company - which I really did not have a problem with since it was his company. When he doctored the books and sold it - then it was my problem.

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