Saturday, January 9, 2010

Wholesale - Retail Hot Potato



Right now the Truck Merchant is involved in a game of hot potato.  I have a customer who wants to trade in Truck A in order to acquire another vehicle.  I have another customer who for a good while has been looking for a truck like Truck A.  Ideally I'd be able to bring the truck in at a price point that would please the first fellow and would allow us to make a profit selling the truck at a fair price to the second fellow.

That's the business of buying and selling.  We buy at wholesale prices, spend some money reconditioning and storing/showing the vehicle, and when we sell at a modest retail markup we make enough to pay the hydro and reap a wage.

The business is a little bit like playing hot potato, and like that children's game a dealer benefits by quick turnover.  You spend fewer resources keeping a vehicle maintained, washed, stored, shown, and so on.  This is of benefit to customers as well since our modest profit can be made on lower prices all around.  Without overhead costs draining the pot, the pencil can be sharp.  If you'll pardon the car wreck of metaphors.

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