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      09-06-2013, 02:57 AM   #32
mattu
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Quote:
Originally Posted by fuddman View Post
Unless you are the owner of the dealership, you're never going to know how a dealer makes his profit, from ED sales or otherwise. That's because you don't have access to his books, methods, etc. Seems obvious enough, yet, a lot of buyers spend a lot of time obsessing over this.

As a consumer, the fundamental principal you need to keep in mind about ED pricing, or any pricing, for that matter is this: neither the dealer nor BMW is going to sell you a car for $60,000 when they know they can sell it to someone else for $65,000.
What follows from that is: if the dealer let's you buy one of the cars he owns for ED pricing, then the dealer knows that's the market price. Putting two and two together, then, if you buy a car from a dealer and go pick it up in Europe for an ED price of , say, $60,000, you can be reasonably certain you can buy that same car, in the states, for the same amount.
On the issue of buying a car at ED invoice. That car is not owned by the dealer but by BMW. And when BMW allows this pricing to happen, they are revealing to you that the car is not selling fast enough for the assembly line. Again, that means there is a strong possibility you can get the car in the states for the same amount.
Of course, the reverse is also true: if the car sells better than expected then, the price will go up regardless of what the sticker says.
That's the way I see it, anyway.
The fundamental point that neither BMW nor dealers are going to sell cars for less than the market will pay makes sense, but I don't think it's as black and white as is lead on here.

The biggest reason BMW offers Euro Delivery is because they think it nets them more sales than not offering it...They wouldn't do it otherwise. Profit-per-unit isn't the only way to maximize profits...selling higher volume helps too. For example, look at the board sponsors on Bimmerfest known for doing ED at the lowest margins over invoice. I'd be willing to bet the increased volume from fulfilling orders for members all over the country more than makes up for the lower profit-per-vehicle they are taking compared to other dealers. Euro delivery buyers are more likely to be enthusiasts who will come back home and tell people how great the experience was, so there's some marketing (possibly increased sales too) for BMW there.

I think most ED buyers are going to be the type that will custom order their new car anyway, not buy off a dealer lot. The dealer takes little (if any) risk on ED orders, which is incentive to offer the car at lower profit than US deliveries. On custom US delivery orders there's a chance the car ends up sitting on the lot if the buyer refuses delivery. Every day the car sits on the dealer's lot it costs them money...just because they can sell it at a higher price to someone else doesn't mean they'll profit more on the transaction if the car sits for a month.