Help me understand pricing

[JMRM]

So decided to wait and order a 2022 for myself (bought my daughter a 2021 2-door Islander) based on a few factors including waiting to see if there are any new colors, etc. However the main reason is the awesome info on this board pointing me to ordering from a place like Gupton (three hour drive for me). I called to verify, and yes, 6-8% off of invoice. So yesterday stopped by local dealer I purchased from to pick something up they owed me, and mentioned this and said I’d prefer to buy local again. He basically said MSRP or beat it, they that could not touch that and seems too good to be true.

So how can one dealer sell for that much below invoice and others can’t/won’t?? Obviously places like Gupton are still making money doing this. Local place I just purchased from didn’t even entertain offering to get close to that, etc.

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[mjaga]

Some (minority of) dealers decide to take advantage of FCA incentives based on volume of sales. Others don't want to take that on so they prefer to make money on each unit they sell instead.
Example A may actually sell each unit for a loss but because they sell so many the manufacturer gives them more money at the quarter etc so their net is actually more than making an extra couple of thousand dollars per Jeep.

Hope that makes sense and maybe someone with first hand knowledge will chime in.

 

[idlingmike]

Rule #1 - Take everything salesman say with a grain of salt my friend.

Dealerships often have a specific allocation of vehicles, especially anything "special". Gupton, Peterson are volume dealerships with a larger allocation and their business model is volume and probably higher documentation fees with every sale. Otherwise why wouldn't one dealership just have all the Bronco's right? A "normal" dealership might only be allocated a dozen Wranglers which sell immediately... so why not mark them up $10,000? why bother dealing with the hassle of ordering? or backend overhead with affiliate discounts to save you a single dollar? So while the volume dealers likely get better pricing, don't [necessarily] believe the dealership "can't". The sales manager "won't" is a more accurate word, but sounds like poo from a customer perspective.

So decided to wait and order a 2022 for myself (bought my daughter a 2021 2-door Islander) based on a few factors including waiting to see if there are any new colors, etc. However the main reason is the awesome info on this board pointing me to ordering from a place like Gupton (three hour drive for me). I called to verify, and yes, 6-8% off of invoice. So yesterday stopped by local dealer I purchased from to pick something up they owed me, and mentioned this and said I’d prefer to buy local again. He basically said MSRP or beat it, they that could not touch that and seems too good to be true.

So how can one dealer sell for that much below invoice and others can’t/won’t?? Obviously places like Gupton are still making money doing this. Local place I just purchased from didn’t even entertain offering to get close to that, etc.

 

[slowpoke387]

Agree with this ^^^
Higher volume dealers are probably incentivized by Stellantis to keep them moving out the doors. Other dealers prob could match that but if they only move a few then what’s the point really? I can see both scenarios and understand the logic.

 

[rcadden]

Can sort of confirm. Gupton is a small dealership physically, and in a somewhat small farming type community. I'd guess he *maybe* sells 5-10 vehicles/week "normally" on a good week.

When I was there picking up my Jeep, he had just received FORTY-FIVE Wranglers/Gladiators in 2 days, all of which were sold custom orders. He puts all of his effort into customs, and probably some farm/fleet sales.

Which means his overhead is also lower. Less sales people working the lot, less finance fees from vehicles sitting out there for weeks at a time, less risk of a funky color or odd options combo, etc.

Volume vs local sales are just two ways of skinning the same cat. What works for Gupton might not work for a bigger dealership or one in a big town.

 

[LuvHydro]

We should all hope places like Gupton helps change the business.

Same local experience here, local dealers MSRP or take a hike. I'm guessing because their allocation is but a fraction of Guptons.

Someone said he 45 on the lot. Our local dealers inventory hasn't changed in months.

The thing I like about Guptons is you know you got the same deal as everyone else. If I had actually trusted them at first, my whole transaction would have taken 5 minutes. The way it was I took a week reading hundreds of forum posts, stalking Daniel and Renee on social andsearching everything I could find on the business proper. PMing several forum members that had just picked up their rigs, yada, yada, yada.

If not for all that and the way my order for my 2022 will go.
Me: Here's my build.
Dainel: Here's the price everyone pays
Me: Here's my deposit
DONE!

 

[dgoodhue]

We should all hope places like Gupton helps change the business.

Gupton and dealers with that sale models make their profit on volume and sale incentives. If every dealer did this, they (Gupton) likely would not be able to offer the same deal because they would no longer hits the sales incentives.

 

[LuvHydro]

Gupton and dealers with that sale models make their profit on volume and sale incentives. If every dealer did this, they (Gupton) likely would not be able to offer the same deal because they would no longer hits the sales incentives.

Outstanding point!

Let me rephrase, I hope Gupton's model rubs off on a dealer closer than 6 hours from me. ?

 

[zrickety]

So decided to wait and order a 2022 for myself (bought my daughter a 2021 2-door Islander) based on a few factors including waiting to see if there are any new colors, etc. However the main reason is the awesome info on this board pointing me to ordering from a place like Gupton (three hour drive for me). I called to verify, and yes, 6-8% off of invoice. So yesterday stopped by local dealer I purchased from to pick something up they owed me, and mentioned this and said I’d prefer to buy local again. He basically said MSRP or beat it, they that could not touch that and seems too good to be true.

So how can one dealer sell for that much below invoice and others can’t/won’t?? Obviously places like Gupton are still making money doing this. Local place I just purchased from didn’t even entertain offering to get close to that, etc.

Supply and demand. The good dealers move volume, so they come down on the price.
The crappy ones don't budge, because they don't sell many cars. A self-inflicted wound.
I drove 8 hours away, it saved me a minimum of $6k at the time.
My 'local' Jeep dealer has only a handful of Chrysler vehicles, and maybe 1 Jeep. It's pretty sad.
I don't know how they manage to stay afloat.

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