Dealer holdback; most manufacturers do this by paying 3% (or close to that) of either the retail or invoice price to the dealer up front to cover costs of maintaining an inventory of cars. Most holdbacks are eaten up after a car sits at the dealership about 90 days, so you have more bargaining room if you buy when the holdback payments arrive (every quarter I think.) So, if you buy in the first few days of the quarter a dealer can theoretically make money even selling at invoice.
I'm not in the business so feel free to correct any errors above.
BTW, 7.5% markup seems like plenty of room to me; most deals should be as close to invoice as possible (2-3% above), although the smart will go at MSRP unless demand really falls off.