Profit Margin question

[5arnolds]

My TT (see signature for TT details) is on consignment with the dealer where I purchased it. I purchased it new in January 2012 for about $22,000; this price includes the Reese dual-cam weight distribution hitch on it. My goal is to get rid of it. Although it'd be nice to walk away with a few bucks, I don't care if I don't.

My payoff is about $11,600. They told me they would probably put a price tag of $15,000 - $16,000 on it, with the willingness to go down to $13,500.

The price is not posted on their website (it's the only used TT posted on their website that doesn't have the price listed...it says to call for a price). A co-worker who is somewhat interested in it called the dealer to get the price. They told him $18,900, but would be willing to come down to $16,900.

What am I missing here? How much profit do they need to make it worth their time to sell it? I understand they need to make a profit, but no one will be interested in it with a price tag that high.

[DocBrown]

What's preventing you from selling it yourself?

[Grumpy]

All the consignment dealers I know of work off of a percentage isn't he? The more they get for you the more they make, or did they tell you already how much you get if it sold?

[5arnolds]

Originally Posted by DocBrown

What's preventing you from selling it yourself?

Time, and the lack of desire to deal with the paperwork/notary involved in paying off the existing loan.

[wags999]

Many dealers will $ from selling a used RV than they do selling a new RV. Unless you can get it in writing that they will take a certain % and you get the balance, they will shoot you a number you will get and then try it sell it at the upper end of it's value. Don't count on them to be ethical on the back side either. They will tell you you have to come down in order to close a deal. Many times the deal is done and they just want to get you to come down so they can make more $. Even the good dealers are a little shady in this respect.

Good Luck !

[bedrck46]

Maybe you should go back to Gayle Kline and get things in writing as to what percentage they will get. Also If I am correct they can't sell it unless they get your approval on the sale as to if you are willing to accept any offers they get. You may also want to talk to Lancaster County RV. And if it isn't sold yet you may want to tell them you are pulling the TT out of their lot. And you are correct it is the only unit they have in their listing that doesn't have a price on it. This may not be a case of buyer beware but a case of seller beware.

[WVDusty]

Just for fun I just called them to see what the price would be. They quoted me 18900.00 also but only willing to come down to 18000.00

[Ela1948]

Gayle Klein is no different then any other dealer. They are not going to give you any where near there bottom price on the phone. You show up and have an active interest, then is when they are really willing to deal. I've bought from Gayle Klein and as far as I can see, they are as reputable as any that Ive been around. I will buy from them again. There service is top notch!! To be honest, they are not going to put the time and effort in a consignment as much as something that they own. Its all about economics. I would call them and ask why a price was shown!!

[bedrck46]

Ela1948
I do agree that Gayle Kline is a reputable dealer and I can't speak for the service dept. but the parts dept. has treated me very good. My comment to the OP was in what he was told and what they gave others as a price for the unit. I realize they are in business to make money but when told that they would list it at one price and then list it higher wouldn't sit well with me if it has a affect on how much I would get when they sold it. For example if they told me to expect a certain Dollar amount based on the price they said they would list it at then that would give an idea of how much percent they will make. But if they list it higher and sell it higher and my bottom line doesn't change that may not sit well with me. I would rather know up front what the seller gets as a fee for his service and what I will receive after the sale is complete. But being it is on consignment the owner should have the finally say in any offer that the dealer intends to accept.

[Ela1948]

Did you have an agreement on percentages?? Was there an agreed to price range?? What I don't understand is why there is no price listed. Its not uncommon to start off at a high price and then really give the buyer a "deal" with a much lower price accepted. Particularly on a used unit. I would be talking to the sales people so that they can clarify where they are coming from. Had someone actually shown up and seemed interested, its my guess that the price would have come down dramatically. When I bought our FW, we went back twice because I really had reservations about wanting a FW to start with. They had given us what I thought was a good price on the first meeting. When we came back again it was obvious to them that we were worth putting out there best offer and it worked!! We bought thinking we had a really good deal. Thats what I would suspect is going on with your high price. What I don't understand is why there is no published starting price. You need to be talking to Gayle Klein for some explanations on where they are going with no price listed and what they would accept.

[3'senough]

Did you sign a contract with the specified percentage or flat rate brokerage? If so then the more they get so do you. There also is a catch in that if you want to be aggressive and get out of it then some pressure needs to be put on them with that in mind. Starting high with hopes that someone might offer less is not always the best course to take.

I have always priced my units at close to what I want to get out of them and did not wiggle much when it came to offers. What I did however was sell my units within a few weeks of listing them.

My motto has always been first in the bath comes out the cleanest. There is a market and demand and on the tail end of the season a limited window to move the unit. What might help in your case in the fact that a dealer is selling, thus buyers might feel more secure in the purchase. You need to dictate the terms and what you expect. They are under no pressure to sell, so they can be greedy.

Just my 2 cents.

[Nighthawk 96]

When I traded my previous trailer, which I had purchased from the same dealer as my current trailer the owner of the dealership, which is a mom and pop small business over 40 years old, and whom we know from church, said he has to make at least $3500 on a transaction to say in business. So that is $3500 on the trade in and $3500 profit on the new trailer. I paid $11,500 on the 26BH as a very slightly used trailer less than a year old and traded it for $10,00 two years later. That was a great deal. He made his profit on the 27DSRL, which I ended up paying $19000 after trade in. That included taxes and shipping for the new trailer.

[wags999]

If they gave you a price that you would get, does it really make a difference what they sell it for, or what they make? Most will not work on a percentage of selling price because they have no idea how much it will cost them to sell it. If you trust the dealer, you trust the dealer. If you were happy with what they offered you for your RV then be happy and don't worry what they make. When we put our last RV on consignment I was happy with what they gave me, and if they sold it for twice what I got, who cares ?

You want out from under it, you were happy with the amount they offered you, then allow them to work their magic. They know the market and their customers. It is in their best interest to sell the unit, because until then they make zero. Most likely they will not lose a sale because of a few hundred $. Have confidence, isn't that why you choose them to sell your RV ?

Good luck for a quick sale...

It's not unusual to not price a unit, but to tease it...once someone contacts them they can then work the customer, for all the other items they can offer....financing, service etc. If someone looks at the price and says too much and never contacts them, they have no chance to "Sell" the unit...

[5arnolds]

Allot of feedback to my post, and some questions...thanks!

The 3 month consignment contract does not spell out percentages/profit margins, etc. This is one of those situations where I think of all the questions after I sign the contract. Since I consider GK reputable, had purchased this TT from them and made it clear that we'd probably return for another RV when the kids are grown, I guess didn't feel at risk signing the contract without knowing all the nitty gritty details; I'm sure some of you view me as an ignoramus for thinking this way, but it's water under the bridge at this point.

For GK to consider consigning, they said I would need to owe no more than $11,500; my ASSumption is that this number, $11,500, is the number that would give me nothing in return from the sale. Upon GK inspecting my TT, they were very interested and felt it should sell because of it's features (bunk room, outside kitchen and being lightweight) and it's like-new condition; as a matter of fact, we never removed the protective plastic off the entertainment system face or microwave buttons.

It's because of what I say above that baffles me about the price ranges being quoted to at least 2 folks (one of them on this thread) who inquired about it. Another response to this thread said that $3,500 is the magic profit number for at least one dealer out there, but since I'm assuming GK doesn't want to put too much time and effort into selling my TT, but rather in their new inventory, they'd be offering it less for a quicker turnaround.

If GK is like the Honda dealer where we purchased our mini-van, they've probably been following this post...they can feel free to speak up if they want. I hope to get clarification from them today on what their strategy is.

Thanks for the input!

[bedrck46]

Sent you a PM

[dewey02]

We traded in a 3 year old TT to a dealer when we bought our new one.
The next week, they had it up on their website for a price that was higher than what we paid for it when it was new! Go figure!