Originally Posted by FH12
I agree, and I go with the saying "Buy what you can afford". But it makes me wonder, say a dealer has a 550-2 selling for $199K, what would be the "At Cost" price to the manufacturer, in other words, how much did it cost the company to make one of these 550-2 and what is the retail mark-up? The profit margins has to huge obviously. Maybe it costs closer to $100K, someone who has a better guess chime in.
First, when considering the profit made, the total cost must be taken into account. Not only the cost of the materials and labor to make the car, but also the advertising, brand development, insurance, taxes, and all other overhead. must also be taken into account.
Second, a company will not, and cannot, sell a good at cost. With no profit, a company will not stay in business.
Finally, a business will sell its product for whatever buyers will pay. If that is not enough to cover cost, then they will operate at a loss and will go out of business. If buyers will pay an amount that is much greater than cost, then the business will make a big profit.
I don't see what is wrong with making a big profit, if that is what happens. Evidently, the company is doing something right, making a product that buyers are willing to pay significantly over cost for.