Well I wish him luck. HE will find out real quick that there is not the margin in equipment everyone thinks there is.
Him buying a semi load is not going to get him much of a "break" in price. Buy Maybe $100,000 and maybe get an extra 5% discount or maybe even just free freight.
So he more than likely will find out he will not be able to sell as cheap as the big outfits do. He may even have to give MORE than they can sell them for. They will buy a few million dollars worth and get may be a 10-15% discount.
So lets say he buys a truck load of box blades and rear blades. He gets 50 items on the truck. 50% each. So that would be 25 box blades and 25 rear blades. So the box blades sell for an average of $600 with a clear profit of 10% or $60. Then the blades sell for and average of $400 with the same profit 10% or $40.
So he would gross $15,000 on the box blades and $10000 on the rear blades. If he clears 10% then he would have made $2500 for selling fifty pieces of equipment. That will be real close on the items your talking about. They do not have high margins on the low end stuff.
Here is my question: How long would it take him to sell fifty items??? Remember your in a smaller town and will not get 100% market share. The TSC and others will set the high price so he will have to be lower if he is selling the same quality stuff.
Also would he be able to take a credit card???? If he does that can cost him an easy 3-4% of the gross sale. HE would have to handle sales tax too. He would pay the credit card handling fee on the tax amount too. How would he recoup the card fee??? I bet that TSC and Gebos don't pay that high of a fee and don't charge the customer anymore for using a card.
I am all for anyone trying to make a buck but I want you and him to think about all of the cost involved in selling equipment. The odds of being successful in the low end market going against the big retailers are very low. He might be better off to sell a little higher quality brand and make a little better margin. He could then up sell the product rather than just having a cheaper low end item that is the same quality as what TSC and Gebos sell.
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