Quote:
Originally Posted by jummo
I'll bet it actually costs more than $995 to transport a car from a factory in Germany to a dealership anywhere in the US of A.
It probably costs more than that to build a car in Detroit (do they still do that?) and send it to a dealership in California.
You and I are going to pay for it one way or another, but the $995 is just a number that probably has very little to do with the actual cost.
|
I'm pretty sure it has to do with distribution cost - just not on an individual basis. Think of it as a blanket shipping cost across all distribution channels. Companies often have variance accounts setup to absorb instances of increased cost, while benefitting from instances of lower cost.
For example - A customer who has picks up a car at the factory in South Carolina, and a customer who picks up the car at their local dealer in California, both pay the same $995 destination charge. However the South Carolina pickup option may not cost BMW anything, while the California shipment may cost BMW $1,990. But because both customers are paying the blanket $995 charge, it evens out for BMW's expense. This is a HIGHLY simplified example but the point is, BMW has determined that $995 is the appropriate charge to cover their national outbound distribution expense.