Cycling and bicycle discussion forums. 
   Click here to join our community Log in to access your Control Panel  


Go Back   > >

Mountain Biking Mountain biking is one of the fastest growing sports in the world. Check out this forum to discuss the latest tips, tricks, gear and equipment in the world of mountain biking.

User Tag List

Reply
 
Thread Tools Search this Thread
Old 10-23-06, 08:21 PM   #1
tuneman6212
Junior Member
Thread Starter
 
Join Date: Aug 2006
Bikes:
Posts: 13
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
LBS sale

I was planning on buying a 07 Rocky Mountain Fusion in the spring until I just found out that the shop that I want to buy it from is having a pre-order sale which includes 20% off. I've never heard of this before. I thought that bike shops make very little profit 5-15%. How can he afford to do this? The bike is regular $950 Canadian and I can get it for $875 tax included (a savings of $218). I need to come up with the money before November 15th. I also found it weird that I have to pay the tax on it even though it won't be processed as a sale until they arrive in the spring. The shop also offers free tune ups for life. Sounds pretty damn sweet to me. What do you guys think??
tuneman6212 is offline   Reply With Quote
Old 10-23-06, 08:22 PM   #2
WannaGetGood
Commited Suicide
 
WannaGetGood's Avatar
 
Join Date: Aug 2005
Location: Abbotsford.BC
Bikes: 2001 Kona Stuff & 2004 Rocky Mountain Switch SL
Posts: 2,416
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Sounds pretty good. And I think that they make more than 5-15%.
WannaGetGood is offline   Reply With Quote
Old 10-23-06, 08:26 PM   #3
santiago
sarcasm meter: jerk mode
 
santiago's Avatar
 
Join Date: Mar 2005
Location: Montréal, QC, Canada
Bikes: 2005 Kona Blast; 2005 Turner Flux, 2006 Felt F3C
Posts: 4,510
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by tuneman6212
I was planning on buying a 07 Rocky Mountain Fusion in the spring until I just found out that the shop that I want to buy it from is having a pre-order sale which includes 20% off. I've never heard of this before. I thought that bike shops make very little profit 5-15%. How can he afford to do this? The bike is regular $950 Canadian and I can get it for $875 tax included (a savings of $218). I need to come up with the money before November 15th. I also found it weird that I have to pay the tax on it even though it won't be processed as a sale until they arrive in the spring. The shop also offers free tune ups for life. Sounds pretty damn sweet to me. What do you guys think??
He probably will put it in his books as a sale right now which means that he's incurring it as revenue. If he is, he'll have to pay his GST/PST liability at the end of his current period (quarter or monthly). As such he'll have to forward the GST/PST to the government for the sale. Rather than take it out of his cashflow, he's asking you to pay for it.

The 20% discount sounds about right. My club has an agreement with a LBS for a similar deal. Any autumn orders for the following spring get a 20% discount.
__________________
First Class Jerk
santiago is offline   Reply With Quote
Old 10-23-06, 09:33 PM   #4
hopperja
Senior Member
 
Join Date: Sep 2006
Bikes:
Posts: 892
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
I purchased a Kona Caldera for cost through a friend who owns a bike shop. He was a bottom-tier Kona dealer (which means his Kona sales volume is very low). As he told me, the higher Kona sales a dealer does, the less the dealer cost from Kona. His cost was 25% less than msrp.
hopperja is offline   Reply With Quote
Old 10-23-06, 09:43 PM   #5
santiago
sarcasm meter: jerk mode
 
santiago's Avatar
 
Join Date: Mar 2005
Location: Montréal, QC, Canada
Bikes: 2005 Kona Blast; 2005 Turner Flux, 2006 Felt F3C
Posts: 4,510
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by hopperja
I purchased a Kona Caldera for cost through a friend who owns a bike shop. He was a bottom-tier Kona dealer (which means his Kona sales volume is very low). As he told me, the higher Kona sales a dealer does, the less the dealer cost from Kona. His cost was 25% less than msrp.
Oh oh. The "that's the way it is" police are going to hunt you down now for divulging that information.
__________________
First Class Jerk
santiago is offline   Reply With Quote
Old 10-23-06, 09:47 PM   #6
pinkrobe
DNPAIMFB
 
pinkrobe's Avatar
 
Join Date: Aug 2005
Location: Cowtown, AB
Bikes: Titus El Guapo, Misfit diSSent, Cervelo Soloist Carbon, Wabi Lightning, et al.
Posts: 4,654
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by santiago
Oh oh. The "that's the way it is" police are going to hunt you down now for divulging that information.
Aiyeeee! Bike shops make a profit on their bikes!
__________________
Proud Member of the HHCMF
'06 Cervelo Soloist Carbon | '09 Titus El Guapo | '09 Misfit diSSent | '09 Wabi Lightning
pinkrobe is offline   Reply With Quote
Old 10-23-06, 09:50 PM   #7
santiago
sarcasm meter: jerk mode
 
santiago's Avatar
 
Join Date: Mar 2005
Location: Montréal, QC, Canada
Bikes: 2005 Kona Blast; 2005 Turner Flux, 2006 Felt F3C
Posts: 4,510
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by pinkrobe
Aiyeeee! Bike shops make a profit on their bikes!
Apparently it's a trade secret.
__________________
First Class Jerk
santiago is offline   Reply With Quote
Old 10-23-06, 10:07 PM   #8
Emory
Senior Member
 
Join Date: Feb 2006
Location: texas
Bikes: 05 giant rincon, '78 Centurian Elite
Posts: 62
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Actually, (according to my accounting for non-business majors class I am currently in) the revenue would not be recorded until the goods change hands. This is known as the revenue recognition principal. The transaction would be recorded as unearned revenue and would be counted as a liability against the cash until the transaction is completed, at which point it is counted as profit. This means that as far as determining income, the government wouldnt see anything. Of course, I could be very wrong, and this may not be the same for canada.
Emory is offline   Reply With Quote
Old 10-23-06, 10:18 PM   #9
MattP.
Obeying Gravity
 
Join Date: Oct 2004
Location: Bellingham, WA
Bikes:
Posts: 2,962
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by WannaGetGood
And I think that they make more than 5-15%.
On bikes? I wouldn't be so sure.
MattP. is offline   Reply With Quote
Old 10-24-06, 08:47 AM   #10
santiago
sarcasm meter: jerk mode
 
santiago's Avatar
 
Join Date: Mar 2005
Location: Montréal, QC, Canada
Bikes: 2005 Kona Blast; 2005 Turner Flux, 2006 Felt F3C
Posts: 4,510
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by Emory
Actually, (according to my accounting for non-business majors class I am currently in) the revenue would not be recorded until the goods change hands. This is known as the revenue recognition principal. The transaction would be recorded as unearned revenue and would be counted as a liability against the cash until the transaction is completed, at which point it is counted as profit. This means that as far as determining income, the government wouldnt see anything. Of course, I could be very wrong, and this may not be the same for canada.
I'm referring to the tax liability. Here in Canada we have a tax input and tax output system. When the vendor buys his merchandise he will issue a purchase order and/or receive an invoice with the taxes due on it. These taxes fall within the reporting period as a tax input. These act as a credit towards any tax liabilities.

Within the same tax reporting period the vendor issues invoices or receipts to clients he's collecting the taxes from and these are considered the tax outputs. The difference between the tax inputs and outputs is what the vendor owes the government for the taxes or what is due to the vendor. All of this is based on the tax reporting period (typically quarterly for small businesses) and the categorization is done based on invoice and receipt dates.

IANAA so don't take my word for gospel, this is how I understand this to work.
__________________
First Class Jerk
santiago is offline   Reply With Quote
Old 10-24-06, 10:56 AM   #11
Emory
Senior Member
 
Join Date: Feb 2006
Location: texas
Bikes: 05 giant rincon, '78 Centurian Elite
Posts: 62
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Quote:
Originally Posted by santiago
I'm referring to the tax liability. Here in Canada we have a tax input and tax output system. When the vendor buys his merchandise he will issue a purchase order and/or receive an invoice with the taxes due on it. These taxes fall within the reporting period as a tax input. These act as a credit towards any tax liabilities.

Within the same tax reporting period the vendor issues invoices or receipts to clients he's collecting the taxes from and these are considered the tax outputs. The difference between the tax inputs and outputs is what the vendor owes the government for the taxes or what is due to the vendor. All of this is based on the tax reporting period (typically quarterly for small businesses) and the categorization is done based on invoice and receipt dates.

IANAA so don't take my word for gospel, this is how I understand this to work.
Interesting. It would probably work the same here I think, I wasnt considering tax on sales, only income.
Emory is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -6. The time now is 12:24 AM.