sprucemt
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David Doyle, That is a nice description of reality. The last paragraph is right on the button.
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DD put it very well........ The customer needs to understand that staying open and having the product available on your demand probably constitutes more of the cost than the original inventory investment.DDoyle said:I've written a couple of books that include values (prices) of military vehicles - and I've bought my share of trucks - so I'll consider myself qualified to chime in here.
First of all, if you want a top-quality (as in show-grade) restored truck, by far the least expensive place to buy it is from another collector. None of us keep an accurate accounting of the parts we put into a truck, and since it is a "hobby" - the labor is "free".
That is not the case for a buisiness. If you look at the percentage of per-item mark up for the big guys (like Memphis Equipment) - their margin may look very high. Having spent thousands of hours there (and thousands of dollars there), I can tell you that their overhead is HUGE (espeically at the Memphis location). Property taxes on a city block in downtown Memphis, payroll, insurance, and benefits on fifty employees, a dedicated semi and driver, a shop building that can accomodate, easily, a dozen or more of the largest MVs the US Army has ever fielded, carrying costs on hundreds of trucks, and millions of parts. One summer they cut up over a hundred 6x6s - and you couldn't really notice that any were gone. All this consumes a LOT of money.
When I decided I wanted a wrecker - that is who I bought it from. I could have bought a truck elsewhere, that would have theoriticallly been cheaper. But, I didn't have time to restore it myself - I wanted to spend my time driving - I wanted certain features (heater, hard top, convoy light, all the OVM) and they could deliver a truck EXACTLY like I wanted, with a warranty.
Since I have so little time off from work - I don't consider my time off "free" - I am choosing to spend my time playing rather than working - so it costs as much per hour for me to pull a wrench on a truck as I normally make in an hour. I could spend this "money" by buying the finished truck I wanted - or spend it in off time building the truck I want - the difference is by buying from the dealer, from the first moment I spent money I had the finished product, rather than spending money (time) for several months before I got what wanted - and then there would be no warranty.
Its been years since I studied this, but IIRC in the typical retail business a 40% per-item margin yields the business something like a 5% net profit annually. So, if your business is trucks, one you buy for $1500 should sell for $2500 - and at the end of the day after overhead you'll have $125 profit.
Regards,
David Doyle
I'm still totally amazed how cheap these trucks are considering what they are and what they can do. Try to replace them with something new, from a functionality standpoint, and only pay 2-5k.tamangel said:I suppose I already know the answer to this question: answer, 'whatever the market will bear'.. but thought I'd get some feedback anyway..
...or I won't get an answer as too ambiguous...or too sensitive/personal..
In essence, how much will a deuce cost from another member or business?
is there such a thing as a fair profit margin?
i.e., someone buys a deuce off GL for, say $2500. Takes it home, goes over it well, fixes what needs to be fixed and then offers it for sale at say:
50% profit: $3750
75% profit: $4375
100% profit: $5000
I would expect that expenses to pick the vehicle up (gas, lodging, meals, time, etc) would be part of the makeup.
Also labor and parts needed...
Just curious how folks arrive at an asking price..Seems that would be a great marketing tool to let one know the expenses involved but, on the other hand, maybe too personal. I have no business sense, hence my, rather blunt questions.. Not meant to put anyone on the spot, just curious..
I'm sure places like Memphis and Clark, etc..have very high percentages of profit
i.e. from Clark, their web site says base level M36 Cab/Chassis goes for $12.5K w/o winch, w/o air assit shift, etc..
If bought, say for $3K from GL (unless they get some sort of mass discount-Do they?) and sell for $15K (w/above options) then would that reflect a profit margin of 400% and an actual profit of $12K...
I realize there are a lot of variables here..but again, just asking..
Mike
Well, I am not sure it is quite that simple.
What a person pays for something and what it is worth is not always the same.
I bought an excellent deuce from a member and paid his asking price which was less than he had in it.
If you pay $2500 for a truck at GL.... get home and the engine locks....not worth $2500 anymore. If you pay $2500 and discover it is a recent depot rebuild or has more "bells and whistles" then you knew about....truck is probably worth more than $2500 to another member (and also to you).
Part of the "profit" some would pay to another member would be for the risk the GL buyer takes at the auction. It has been my experience that if you buy a truck from most anyone on this site, you are going to know the pros and cons on the equipment and be able to make an informed decision on a price.
Therefore, I don't personally have any problem with fellas making a profit on a truck sold to me.....I can always decide what it is worth to me.
I have done both: bought years back from DRMO and from private sellers on this site...
Experience: 50/50 on my purchases from DRMO. 100% happy with the private deal.
just my
JR
Therefore, I don't personally have any problem with fellas making a profit on a truck sold to me.....I can always decide what it is worth to me.
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