Okay...how does this idea sound?

[beastboy]

Nothing I plan on venturing into....right away anyways....LOL.....but I was proposed this idea....

My buddy who owns a trucking company hauling cars, was telling me about the manager of Manheim Auto auction that he hauls out of.......he is into "wholesaling cars"....He buys cars at the auction, has a 30 day net term with the auction house and a LOC with a bank.....buys the cars based on the market he is hauling too. If he is going to Florida he has contacts there that tell him what is "hot"....lets use a F150 Harley Davidson Truck.....he'll buy it here because they are plentiful and then have it hauled down there and sell it. At first he was selling for max profit, and would hold onto the vehicle till he thought he was getting that profit...now he does it in volume....50+ cars a week.....even if he sells for $100 profit, he'll do it.

Well my buddy asked me if I was interested.....he needs my credit seeing his first business ended in bankruptcy(due to a string of bad luck, economy, and a broker screwing him out of 100k). I have always been of the idea to NEVER go into business with anyone...especially a friend, but seeing his contacts and nature of his business, I was thinking this could possible be a good idea down the line....even starting out moving a couple of cars a month.

Any input?

 

[MattTheSkywalker]

So he's an auto broker? Is that his business?

Mannheim is typically a dealer's - only auction. Is he buying the cars at Mannheim and then selling them somewhere else?

 

[bran987]

is he reselling the cars to individuals or dealers?

 

[beastboy]

I believe he selling to both dealers and individuals.

He does have his dealers license. Not sure what classifies him as a broker.....I know he uses the term "wholesale".

 

[Razorguns]

That's a lot of work. Buying the cars. Driving it down. Pitching it to dealers. All the while no guarantees anyone will buy it.

I can see it works if he gets AWESOME deals from Mannhein -- but isn't he already outbidding local dealers, then adding in transportation costs, then adding in his own profit on top of that. It's still attractive price-wise to all those dealers even after that?

 

[pitbullstl]

My buddy who owns a trucking company hauling cars, was telling me about the manager of Manheim Auto auction that he hauls out of.......he is into "wholesaling cars"....He buys cars at the auction, has a 30 day net term with the auction house and a LOC with a bank..?

This is called a Floor Plan, all dealers have them, based on credit and years in businss X volume per year, you can get anywhere from $25,000 to $10,000,000. Manager of Manheim?? Not sure what exactly he does, are you speaking of the Manheim PA, or just using Manheim in the broad sense as in a dealers auction. Anyway, if this guy works for the auction he would have the inside scoop on which cars have been run through week after week without selling , and then the ability to lowball those dealers to scoop up their inventory. Sounds slim shady at best. We used to buy Tahoes, Suburbans and trucks in Houston and Dallas, then run them through the auction up here, pain in the ass, for little return, don't forget you have to factor in buyers and sellers fees at these auctions.

 

[beastboy]

Detroit Auto Auction....it is owned by Manheim.

 

[MattTheSkywalker]

I still don't exactly understand his business...can you explaim further?

He buys the cars then re-sells them? Forgive my ignorance....

 

[beastboy]

That is the way I understand it...and forgive me for not having alot of detail....we are suppose to meet to discuss it further.

He is buying cars at the auctions here that are not readily available in other states. He has dealer contacts in other states, and basically is their buyer up here.....sells the desired cars above what he paid for them to these other dealers...and ships them. Sounds pretty simple...but I have to believe there is more to it.

 

[MattTheSkywalker]

so - he has a dealer license which gets him into the dealer only auctions? From there, he buys cars and re-sells to other dealers around the US?

He also sells to individuals?


His profit is the spread, minus shipping etc?

 

[bran987]

so if he's at his auction and his friend down in Florida tells him "we need F-150 trucks down here we can't keep them in stock people will pay $18,000 for them right now"

he just checks to see if he can get a good enough deal, like $15,000 or whatever, and then ships it down there.

 

[pitbullstl]

Detroit Auto Auction....it is owned by Manheim.

Right. So he's a wholesaler. The number's between wholesale and retail are seriously crunched right now, but if you can get cars or trucks for under rough book, then you should still be able to turn a profit.

Just what the world needs, another car dealer...... J/K bor......if you are serious, try your hand. Start out small, a couple of $3,000 Accords should do the trick. Be careful though, it's addicting. Next thing you know, you'll have a collection of polyester suits, and a bad combover.....

 

[beastboy]

Matt....some individuals....but for the most part, it's dealers like pitbull just explained.

LOL....more like a comb forward. That is what he was saying about it being crunched...he is working on volume....50 cars a week.