How much prep is too much prep??

[How much prep is too much prep??]

2 hours ago, EPV said:

Ok, well you did say above that as the buyer for the firm, you are struggling to find decent cars with a margin after your recon costs. You were offered the advice (good advice imo) that you should look to increase your prices where applicable (the example of the only one in 60 miles being a good example) but you have stated that you prefer to work to a certain marker on AT with the intention of selling the stock quicker, turning more cars etc. Straight out of an AT Masterclass, some good advice in those classes I've found!

As the buyer for the firm, you're no doubt expected to get the cars as cheaply as possible. Someone else presumably is in charge of recon, another in charge of selling and so on. You all have your own difficulties within your roles.

Mr recon says to you "you're paying to much for the stock, by the time I've minted these cars up there isn't enough margin" and you're thinking "what are other dealers doing, I'm thinking we're minting up too much and how can I possibly pay less for the stock when everyone wants it"

Vicious cycle.

As a one man band I don't have these concerns or musings, if when I get a car delivered, it's got a marginal bumper scuff, or an alloy that is on the borders or nibbled/smashed then I just spend the £60 or £40 and get it done. 

But what I do make sure I spend time on, is looking at what my competition is. I try and source cars that I have very little competition and even then I believe I can present better than them and steal the customer who is looking for that make/model/derivative. I try to aim for a price that gets the "good" marker because it does influence buyers but if you think the vast majority have a clue in the differences between good, great and low then sorry, they don't. They still think the cars are over priced, still want to chip, do a deal, get something off. But if I have a car that I know or believe will be popular, and I'm the only one, or one of two, then the marker means nothing to me and I'll put it at £500 above the good price marker.

Don't take this the wrong way but I can see you have been schooled in the AT way, price to 98% of market, turn more stock quickly so you can rinse and repeat etc. Maybe you think that it's the only way, the best way etc but I don't think it is. This is coming from someone who is a complete AT nut. I use all their tools, speak weekly with their performance partners and sidekicks and have been to a couple of master classes. 

I think you need to have a word with whoever sets your prices and ask them to stop being so lazy and just pricing to 98% of the market and do some proper research into what your competition is, for each car and price it accordingly. There are ways to increase margin, add value etc and cutting costs or standards isn't the way imo. Not for what I sell anyway. 

You cannot physically reduce the price of buying cars, You are doing your bit by as you say, scouring the internet and working hard to find the gems. Whoever does your pricing is being lazy and not putting in as much effort imo.

Good luck either way mate.

I agree entirely with you mate. 

Thanks for such a detailed response and definitely some good points to take away there. I think maybe i'll throw some of these into the next meeting and see what answers i get. 

 

Thanks appreciated.  

[How much prep is too much prep??]

37 minutes ago, EPV said:

So you’re saying you’re struggling to find cars with acceptable margins in them and you would rather price cheaper (not right because the right price is the sale price) sell cars quicker and use that money to buy more stock and repeat. 

I can see a flaw there mate. You want fast selling cars for cheap. There’s a long queue. 

Not struggling we find cars. No what i was saying is we price ours lower make less money for a faster turn and still "mint" the cars. so i was basically trying to see how much prep other dealers do. as we do ours to a high standard but i'm thinking maybe we do too much for the price we're offering.

 

yeah i'd join that queue if there was one lol.  

[How much prep is too much prep??]

5 minutes ago, justlooking said:

Are you not cheating yourself out of profit by making sure every car is “great price”

I.E, your rare example with all the extras may be the only one within 60 miles, I’d certainly be trying my hand at £6500 instead of £6144 for a week or two

Arguably yes. But the method is price it right sell overnight rather than holding on for a couple of £100 of profit. then invest that money and turn another car as it's seen as a deal by the customer.   

[How much prep is too much prep??]

Thanks for the replies guys appreciate it. 

We sell our vehicles on Auto Trader using their retail valuation price at a "great price". We make the cars pretty mint but we're not demanding top money for them. i'm the one sourcing cars and its a struggle to find cars with a decent margin after all has been done, It usually means looking in every crevasse of the internet to find these. 

[How much prep is too much prep??]

Hello 

 

We're relatively new to the game been trading a year but we're doing well enough although its massively quietened down for January. 

We are a small family run business Mother, Farther, Two sons me being one of them. we have an on going argument about vehicle prep and condition. My Dad likes the idea of making the cars absolutely immaculate and thinks no one will buy if they're not. we still make money but it eats time and profits doing this work. I was just wondering how much prep is acceptable usually? Our cars range between 3K to 15K as a guide. obviously on the more expensive end cars sell better based on condition but at the cheaper end, do they still sell well with scuffs and bumps?. in more experienced trader opinions are we doing too much?. 

Our cars are offered with the following; 

12 Months M.O.T - 6 Months Warranty (warranty wise) - up to date service if needed - Paint Remedied to immaculate - Alloys Repaired if scuffed. 

 

Any advice is appreciated

 

Thanks