Manics

Three pages of reply -got a small debate going anyway. Thank you! Not looking to become an easy overnight millionaire (well...). I think I'm trying to take a realistic view. Even after typing out the post (which can be a therapeutic process in itself) I came to the conclusion that it likely is what it is. There are many variables on the buying side (as Stalker suggests) and selling side which must be controlled as with many businesses. The other requesting margin feedback was that in the magazine guide, their example carries a FAT gross margin, let me tell you -and I suspected from this forum that it might not be sensible to build a plan in entirety based on that. I do appreciate margin data is sensitive. Stalker: I did expect to get a few backs up. I've read the forum, not as long as you guys, but enough to recognise the etiquette. You said: " he’s ignorant to the fact that all of the profit in this job is in the buying.... not the selling" -wise words of course, and food for thought. Thank you also. My background is in sales, though box-shifting to retail (CE goods). I know a bit about commercials/contracts/P&L etc. The trade has caught my eye for some years, I'm in South Oxon, and frustratingly I've seen two pitches (within approx. 30 mile radius) come available, which were not motor trades pitches beforehand, mature into seemingly nice little businesses for somebody who got there before me, because they were brave enough to take the plunge and commit. Yep -I reckon with rent at £2k, business rates at £500, 1 basic wage (no divi) and a few other bits (don't want to upset the editors of the guide) then fixed costs are approx. £4.5k per month, divided by 10 cars, and that's before COS. Anyway, a bit of content and debate for the forum. Thanks again.

Hi all, I know some of you don't much appreciate these posts. I'm not asking to be hand-held. Hopefully it'll come across that I've done a little homework before tipping up here post no.1 asking you good people for something. The purpose of this post is to enquire what kind of margins you're working from (gross/net). Obviously not interested in your £ margins, just percentage. I've read plenty on this forum about thinning margins contrasted to the fabled "glory days", and if I've done my sums right, then are they really this thin...? I purchased the "How to be a Car Dealer" magazine from this site. I'm not going to break everything down because I don't want to steal their thunder (I would recommend its purchase to anyone in my position by the way). My loose model for the purposes of qualifying viability: Cars priced £10k minimum Markup at 25% (20% gross margin), so hoping (needing) to source around £8k 10 cars a month Warehouse unit (secure under cover) No stocking loans or fees In the model above I've got £2k gross margin per car. I reckon it's going to cost me around £450 per car fixed costs (unit rent & business rates alone around my way sufficient for 10 cars + 2/3 rotating prep around £2.5k PCM). Then I've got around £1.3k cost of sale in VAT, prep, warranty, advertising -essentially leaving a net margin of under 3%! I think my COS figures are worse case (some might only need the hoover & wax), though I was expecting it to be tight, 3% is razor thin. I don't feel I can go back and jack the mark-up because this forum is telling me that's unlikely. I'm reluctant to just bang sales up to 20 per month too (unrealistic off the bat, as indeed 10 might be). Increase the £ margin by modelling on £20k cars?! Or reduce the COS. I need to earn some money out of it... ...but £240 odd net on a £10k car?! I suppose influencing that number -therein lies the skill. At 3%-ish am I still wildly optimistic(!!) or too pessimistic..? Is there any industry average? Any business in single digit net makes me squirm and I'm a million miles from that! Anyway, thanks for reading and any feedback you might have.