Yeah, he was full of it or lying. Please don't cry...
Cost is generally around half of retail, but it can vary - volume buyers may get a better deal, or the rep may be trying to get rid of a model (or one may be at a premium due to demand).
So a $1000 guitar would run around $500 or just over, and some dealers are happy making $100 on it. Most will try to find out what prices you've gotten, so they can make as much profit as they can - if your best price was $750, why should they sell it to you for $600 if they can get you to buy for $700?
At Sam Ash (10 years ago!), we would sell Ibanez for 40% off list IF a guy came in with a price to beat and we believed the story. Most stores in the Philly area would go 30% off and some would do 35%. If you just walked in "looking for the best price" with no idea what that was, you'd probably get 25-30% off.
. I got my Taylor there. Some nice guys, and great prices. They can't print IBZ prices, but will e-mail you the price - I don't have a current list, but I KNOW many of those were 40% off list. I'm pretty sure I saw the SC420 for $600 on it.
Of course, keep your eye on eBay & harmony central, too. I got a SC620 for $500...
(edited out dealer link by jemsite)