The Car Salesman's Thread Vol 2
Discussion
StottyZr said:
SpeckledJim said:
StottyZr said:
Ari said:
StottyZr said:
I was using random figures to stress my disagreement with the statement "Are you happy with the deal? If so, what's the problem?" with regards to profit margins.
To reiterate, I was pointing out that I'm unsure if I could've got a better deal and I get a nervous feeling after negotiating a price(which is not the fault of the dealer, its literally a by-product of buying something)
So when you buy privately instead, surely the same applies? You still don't know if you could have got a better deal do you?To reiterate, I was pointing out that I'm unsure if I could've got a better deal and I get a nervous feeling after negotiating a price(which is not the fault of the dealer, its literally a by-product of buying something)
Seems to me the problem's yours, nothing to do with the way dealers operate.
I know somebody who's ordered a new M5. BMW have offered him £16000 for his M6 as p/x. He's listed it for £17,750 and has told me it will be going in as p/x if it doesn't sell by the time his advert expires.
From this I know he would accept a no hassle offer of £16500+. This would be my ideal purchase if looking for an M6. If I bought this car I would be fully aware that I got it for a decent price as the seller had been so transparent.
I think the reason why I prefer to buy privately is because I’m looking for the same thing a car dealer is, although their looking to maximize profits I’m looking to minimize depreciation.
The figures I described were an explanation to the line that is continuously rolled out "Are you happy with the price you paid?" well the answer is I don't know. There is uncertainty to if I could have got a better deal. With this M6 there would be no uncertainty because of the circumstance.
I do not feel like I can explain this any clearer.
tting you, and BMW actually only offered him £14k? You'd be happy to buy it at a £500 premium over the 'competition', but presumably wouldn't be happy to buy it at a £2.5k 'premium' but exactly the same price? And the only difference is whether the guy told you the truth or not - and you'd never know anyway?What if he bought it from a suicidal maniac for £1000 two weeks ago?
Is any of this relevant at all? (No)...
You said you only want a fair deal, but as soon as you talk numbers, it falls over.
Every car on the forecourt is a potential banana skin for the dealer, just as it is also an opportunity. Some you win, some you lose. If you don't run your winners, you couldn't afford your losers.
By the by - don't, whatever you do, tot-up the original cost of the materials that now comprise your house. You'll really upset yourself. You. Were. HAD!
tting. Its really not that difficult.I am at a loss at how anything other than "fair enough" was said in response to that example.
And, concomitant to that - why is it at all important when the price is the price is the price?
(please don't bring WBAC into this as any arbiter whatsoever of 'value' - that really is willfully silly)
StottyZr said:
I'd look at every advert on PH and AT to do a cross-check of asking prices then I'd run the number plate through WBAC to see bottom book price and I'd be able to tell from that if he was bullstting. Its really not that difficult.
Book price (It's a guide and a very rough guide at that) really is bullstting. Its really not that difficult.t at the moment. I bought a convertible in auction last week and I paid £1900 over 'book'. Guess what that means I have to mark it up at £1900 more that 'book'.
SpeckledJim said:
StottyZr said:
SpeckledJim said:
StottyZr said:
Ari said:
StottyZr said:
I was using random figures to stress my disagreement with the statement "Are you happy with the deal? If so, what's the problem?" with regards to profit margins.
To reiterate, I was pointing out that I'm unsure if I could've got a better deal and I get a nervous feeling after negotiating a price(which is not the fault of the dealer, its literally a by-product of buying something)
So when you buy privately instead, surely the same applies? You still don't know if you could have got a better deal do you?To reiterate, I was pointing out that I'm unsure if I could've got a better deal and I get a nervous feeling after negotiating a price(which is not the fault of the dealer, its literally a by-product of buying something)
Seems to me the problem's yours, nothing to do with the way dealers operate.
I know somebody who's ordered a new M5. BMW have offered him £16000 for his M6 as p/x. He's listed it for £17,750 and has told me it will be going in as p/x if it doesn't sell by the time his advert expires.
From this I know he would accept a no hassle offer of £16500+. This would be my ideal purchase if looking for an M6. If I bought this car I would be fully aware that I got it for a decent price as the seller had been so transparent.
I think the reason why I prefer to buy privately is because I’m looking for the same thing a car dealer is, although their looking to maximize profits I’m looking to minimize depreciation.
The figures I described were an explanation to the line that is continuously rolled out "Are you happy with the price you paid?" well the answer is I don't know. There is uncertainty to if I could have got a better deal. With this M6 there would be no uncertainty because of the circumstance.
I do not feel like I can explain this any clearer.
tting you, and BMW actually only offered him £14k? You'd be happy to buy it at a £500 premium over the 'competition', but presumably wouldn't be happy to buy it at a £2.5k 'premium' but exactly the same price? And the only difference is whether the guy told you the truth or not - and you'd never know anyway?What if he bought it from a suicidal maniac for £1000 two weeks ago?
Is any of this relevant at all? (No)...
You said you only want a fair deal, but as soon as you talk numbers, it falls over.
Every car on the forecourt is a potential banana skin for the dealer, just as it is also an opportunity. Some you win, some you lose. If you don't run your winners, you couldn't afford your losers.
By the by - don't, whatever you do, tot-up the original cost of the materials that now comprise your house. You'll really upset yourself. You. Were. HAD!
tting. Its really not that difficult.I am at a loss at how anything other than "fair enough" was said in response to that example.
And, concomitant to that - why is it at all important when the price is the price is the price?
(please don't bring WBAC into this as any arbiter whatsoever of 'value' - that really is willfully silly)
Downton Mini said:
markmullen said:
You may have seen how quiet this thread has gone of recent days; we've found another place to chat, away from the imbecilic rants and poorly thought out ramblings of some of you who spoilt this thread for others who found it useful.
Well done guys.
Bugger I realy enjoyed reading this thread as wellWell done guys.
Cheers.
In regards to margin's this is what my site's used car stock is looking at (minus demo's).
For our 68 cars on our forecourt (all prep work done), the stock value is £630,818.67 which includes £15,957.01 of prep costs. The retail price for those cars is £765,940.00
So that gives us £135,121.33 for all those cars (£1,987 per car).
Lets say we knock around 5% off that for discounts, it's £1,887.
Minus 20% on tax, now at £1,510 per car.
Roughly speaking we then have another 10% for the salesmen commission, £1,359
We then pay £150 for a manufactories warranty and 14 day insurance, £1,209
So that means the dealership will see a 16% return on our stock.
Now let me ask you, how much mark up to places like Apple and Coke on their products. It sure isn't 16%
For our 68 cars on our forecourt (all prep work done), the stock value is £630,818.67 which includes £15,957.01 of prep costs. The retail price for those cars is £765,940.00
So that gives us £135,121.33 for all those cars (£1,987 per car).
Lets say we knock around 5% off that for discounts, it's £1,887.
Minus 20% on tax, now at £1,510 per car.
Roughly speaking we then have another 10% for the salesmen commission, £1,359
We then pay £150 for a manufactories warranty and 14 day insurance, £1,209
So that means the dealership will see a 16% return on our stock.
Now let me ask you, how much mark up to places like Apple and Coke on their products. It sure isn't 16%
Wild Swordfish said:
In regards to margin's this is what my site's used car stock is looking at (minus demo's).
For our 68 cars on our forecourt (all prep work done), the stock value is £630,818.67 which includes £15,957.01 of prep costs. The retail price for those cars is £765,940.00
So that gives us £135,121.33 for all those cars (£1,987 per car).
Lets say we knock around 5% off that for discounts, it's £1,887.
Minus 20% on tax, now at £1,510 per car.
Roughly speaking we then have another 10% for the salesmen commission, £1,359
We then pay £150 for a manufactories warranty and 14 day insurance, £1,209
So that means the dealership will see a 16% return on our stock.
Now let me ask you, how much mark up to places like Apple and Coke on their products. It sure isn't 16%
You are making the mistake that many retailers do: you (the retailer) is not entitled to make the same margin as a manufacturer / brand ownerFor our 68 cars on our forecourt (all prep work done), the stock value is £630,818.67 which includes £15,957.01 of prep costs. The retail price for those cars is £765,940.00
So that gives us £135,121.33 for all those cars (£1,987 per car).
Lets say we knock around 5% off that for discounts, it's £1,887.
Minus 20% on tax, now at £1,510 per car.
Roughly speaking we then have another 10% for the salesmen commission, £1,359
We then pay £150 for a manufactories warranty and 14 day insurance, £1,209
So that means the dealership will see a 16% return on our stock.
Now let me ask you, how much mark up to places like Apple and Coke on their products. It sure isn't 16%
You only have £631k at risk - as a for instance, the new Apple HQ is already US$2billion over budget
You haven't invented anything, developed any unique intellectual property, built and maintained a global brand, invested in production sites, lobbied governments etc. You don't even have your own warranty, just a bought in one.
All you have done (and you are no different to any other retailer) is add the smallest amount of economic value of the whole value chain by acquiring (buying) pre existing stock, prepping it and hoping to resell it a profit.
Now that is not to belittle your efforts, but you can surely see why the retail part of the motor trade deserves to earn a smaller return than the manufacturers - same as in any other industry really.
JPJPJP said:
Wild Swordfish said:
In regards to margin's this is what my site's used car stock is looking at (minus demo's).
For our 68 cars on our forecourt (all prep work done), the stock value is £630,818.67 which includes £15,957.01 of prep costs. The retail price for those cars is £765,940.00
So that gives us £135,121.33 for all those cars (£1,987 per car).
Lets say we knock around 5% off that for discounts, it's £1,887.
Minus 20% on tax, now at £1,510 per car.
Roughly speaking we then have another 10% for the salesmen commission, £1,359
We then pay £150 for a manufactories warranty and 14 day insurance, £1,209
So that means the dealership will see a 16% return on our stock.
Now let me ask you, how much mark up to places like Apple and Coke on their products. It sure isn't 16%
You are making the mistake that many retailers do: you (the retailer) is not entitled to make the same margin as a manufacturer / brand ownerFor our 68 cars on our forecourt (all prep work done), the stock value is £630,818.67 which includes £15,957.01 of prep costs. The retail price for those cars is £765,940.00
So that gives us £135,121.33 for all those cars (£1,987 per car).
Lets say we knock around 5% off that for discounts, it's £1,887.
Minus 20% on tax, now at £1,510 per car.
Roughly speaking we then have another 10% for the salesmen commission, £1,359
We then pay £150 for a manufactories warranty and 14 day insurance, £1,209
So that means the dealership will see a 16% return on our stock.
Now let me ask you, how much mark up to places like Apple and Coke on their products. It sure isn't 16%
You only have £631k at risk - as a for instance, the new Apple HQ is already US$2billion over budget
You haven't invented anything, developed any unique intellectual property, built and maintained a global brand, invested in production sites, lobbied governments etc. You don't even have your own warranty, just a bought in one.
All you have done (and you are no different to any other retailer) is add the smallest amount of economic value of the whole value chain by acquiring (buying) pre existing stock, prepping it and hoping to resell it a profit.
Now that is not to belittle your efforts, but you can surely see why the retail part of the motor trade deserves to earn a smaller return than the manufacturers - same as in any other industry really.
POORCARDEALER said:
Sounds like manufacturing snobbery to me.......
no, its economics in action: the party that invests most resources and/or takes most risk is the rightful earner of the most valuein the business of selling cars, the retailer is a very important part of the value chain, but doesn't have the right - in terms of value added - to earn the biggest return
she has a right to a reasonable return, but no more than any other retailer really.
JPJPJP said:
All you have done (and you are no different to any other retailer) is add the smallest amount of economic value of the whole value chain by acquiring (buying) pre existing stock, prepping it and hoping to resell it a profit.
...and if the retailer has no USP then the only thing they can do is compete on price.TheLordJohn said:
POORCARDEALER said:
Sounds like manufacturing snobbery to me.......
Bit of a ridiculous reply. At the end of the day there has to be enough margin in at for everybody involved, in this case the gross margin manufacturers make in relation to the prices dealers buy at is huge, ie 8 or 10 times the margin, so they do get their cut.
Deva Link said:
...and if the retailer has no USP then the only thing they can do is compete on price.
That's a major oversimplification. In the right location, with a good reputation then price can be secondary. Take the sort of cars that MarkMullen on here sells. They only sell what they do because of a well deserved reputation. Because of that reputation of going the extra mile, the bumper to bumper warranty etc they avoid competing purely on price.Until October last year I've never really worked in retail, then I accidently set up an online shop specializing in high end pre-owned electronic test gear. I'm slowly building a reputation that means people emailing me asking if I can obtain a specific item and because my customers know I'll test it thoroughly before shipping it, and because it will be packaged properly I can also charge a premium. Trying to compete by being the cheapest is just taking part in a race to the bottom that no-one can win.
POORCARDEALER said:
mercfunder said:
Doubt this thread will be missed......bunch of jumped up car salesman who thought they were better than their customers.
And know nothings like yourself.k all, you know jack st about me, but like most of the second hand car dealers on here can't stand anybody to have a different opinion to you. Jog on, we won't miss you.mercfunder said:
POORCARDEALER said:
mercfunder said:
Doubt this thread will be missed......bunch of jumped up car salesman who thought they were better than their customers.
And know nothings like yourself.k all, you know jack st about me, but like most of the second hand car dealers on here can't stand anybody to have a different opinion to you. Jog on, we won't miss you.s off and post elsewhere......Gassing Station | General Gassing | Top of Page | What's New | My Stuff