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The "Ready to sell cost" is the cost of the machine with NO PROFIT to a dealer. Dealers do not stay in business very long by selling machines for no profit.

Many dealers charge additional fees for "Freight and Setup" over and above the selling price of the machine. Add the "Selling Price" to the "Freight and Setup" charges and subtract the "Ready to sell cost" to determine the PROFIT a dealer is asking to make.

Another thing to know about is the Ichiban Rating System. Not making this up, ask a dealer about it and they'll love you or hate you. Basically there is a system that determines how much additional dollars are rewarded back to a dealer if they sell so many motorcycles. So there cost in the end does end up being a tad less, therefore giving you more room to work with. I called around, and in this region Renton Motorsports (RMC) in Renton, WA is the region/state Ichiban winner. They move an insane amount of bikes out of that place, and if you've ever been there then you will understand why. Of course, there are only one or two dealers in a region that are rewarded, and it's rather easy to find out which ones in your area.

Compare the following two dealer invoice reports for the 2006 and the 2004 Kawsaki ZX-10R:

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2006 Kawasaki Ninja ZX-10R
Dealer Invoice Report
List Price:$11199

Dealer Invoice:$9593
This is the base dealer cost before freight charge and assembly credit.

Freight Charge:$150
Deduct $20 In freight cost for units shipped to dealers prior to February 10,2006. All dealers pay the same standardized freight charge from Kawasaki to their dealership.

Assembly Credit:$-74-per Kawasaki dealer pricesheet
Each dealership has its own method of figuring cost of assembly and prepartion for sale.

Ready to sell cost:$9669

This model Kasaksaki 5%(of list price) dealer holdback.
This holdback money is paid to dealers in April or Octotber for units that are sold within the previous 6 months. Dealers must pay Kawasaki the full "Dealer Invoice" price and wait up to 6 months after selling the machine to recive the dealer holdback.

Wholesale Incentives: none at this time

Retail Incentives: none at this time

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2004 Kawasaki Ninja ZX-10R
Dealer Invoice Report
List Price: $10999

Dealer Invoice: $9156
This is the base dealer cost before the freight charge and assembly credit.

Freight Charge: $130
This is a standardized freight charge from the Kawasaki dock to the dealership.
All dealers pay the same price.

Assembly Credit: $62 - per Kawasaki dealer pricesheet
Each dealership has its own method of figuring cost of assembly and preparation for sale.

Ready to sell cost: $9224

This model Kawasaki has 5% (of list price) dealer holdback.
This holdback money is paid to dealers in April or October for units that are sold within the previous 6 months. Dealers must pay Kawasaki the full "Dealer Invoice" price and wait up to 6 months after selling the machine to receive their dealer holdback.

Wholesale Incentives: none at this time

Retail Incentives: none at this time

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Most people ask me is the holdback 5% of the MSRP or is it 5% of the "ready to sell cost"?

It means that actual dealer cost AFTER the holdback is paid to the dealer at the end of the year is 5% less than the about the dealer must may the manufacturer at the time the bike is sold (which technically is the "cost to the dealer of the unit). Holdbacks are not usually "assigned" to the unit at the time of sale. When the bike is sold, the accountant usually books the income as "Sale Price", and the "Cost of Goods Sold" as the cost with the hold back being recorded an "Account Recievable" due from the manufacturer at a later date. It really isn't figured into the deal as a rule. To be specific on basis of the percentage, if the Profit Margin is 17% on a bike using "List" minus "Invoice", the actual Profit Margin after recieving a 3% holdback would be 20%.



Source: Cyclecost
 
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