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Old 05-17-2014, 02:49 PM   #1
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Dealer Only Auctions

When buying a used RV, one option would be to buy through Dealer Only auctions.

Obviously, you first would need to set yourself up as a bonafide dealer before heading over to Manheim ...

Let's say that you do buy through Dealer Only auctions, how much can be saved?

Do Newmar high end coaches, Newell and Entegra Cornerstones show up at auctions?

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Old 05-17-2014, 04:00 PM   #2
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60% off retail?

Okay, I'll see if I can get anyone to comment on this ...

I think that if a used RV is retailing for about $200K, then a dealer is going to need to get it for somewhere below 65% off retail at the auction.

After all, the dealer does have to pay for the expense of buying at auction, transporting from auction to dealer, fixing things, and then add it as an inventory expense.

So, as an example, I think a used Cornerstone that may retail at a Dealer for $200K may sell at Manheim or other Dealer-Only auction for between $100K to worst case, $130K.

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Old 05-17-2014, 04:28 PM   #3
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Business Model with Silent Partners

Forums such as irv2 make it clear that there is a market for quality used high-end coaches. What I'm wondering is if there may be a Business Model to take advantage of this market opportunity for buying desirable RVs at auction for others.

The basic Business Model would be as follows:

1 - Set up a used RV Dealership to connect buyers to wanted make and model years of used coaches purchased at dealer auctions. Maybe offer the buyers a 15% guaranteed purchase price above the total cost to the dealer to acquire the coach at auction for them.

2- In addition, offer each buyer of a coach from auction a Silent Partner position in the dealer company, with a certain percentage profit sharing from the company transactions in the future.

3 - Work with buyers to connect them with outside houses that will refurbish used RV, e.g. new paint jobs, updating the innards of the RV, etc, as desired by the customer.

Baby Boomers are buying lots of RVs. I think there is a possible business opportunity here.
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Old 05-17-2014, 04:48 PM   #4
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OEM - Solar

If anyone thinks the above idea for a Dealership may be viable, please let me know ...

It just so happens that I'm working on a custom Sun-Tracking Solar system to put on the roof of RVs. This idea of buying RVs at auction and adding value to it, as an OEM, by adding a quality Solar system to an RV for resale to others just occurred to me.
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Old 05-17-2014, 08:08 PM   #5
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Our first Class A MH was purchased through a 'dealer only' auction. A friend is a dealer that goes to these and has done good in the past. We got a 2003 Holiday Rambler Endeavor with 5700 miles in 2004 for $80,000. The book that that time was $147,000 so we made out real good. The MH was in real good condition and the only thing that needed to really be cleaned was the micro wave oven.
There are some good deals out there, one just needs to be in the 'right place at the right time'!
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Old 05-17-2014, 08:22 PM   #6
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Last year when we we looking for our DP someone here posted the results of a recent auction. Based on several factors we pretty much identified one of the units listed as one we were considering. The unit had a sold price of around
$133K. The asking price here was around $179K. We lost interest in the unit after discovering it had one of the Cummins engines involved in the wrist pin issue. The seller bought one unit a month and had no followup service available. He was just a turn and burn. I have no idea what the final selling price was as the seller kept dropping the price. In Mesa AZ, where we winter, the place is surrounded by RV dealers. Many we looked at were filled with units from auctions. A lot of them came from the cold mid west or southern states and none had any owner history. A few of them were not winterized properly and had damaged plumbing, especially the ones with Aqua Hot.
As far as a business goes, I don't know what it costs to become a dealer or what the auction costs might be. Would you be looking for a particular unit for a buyer? Or buying one and looking for buyers? I can't see how this is any different from every dealer now except you promising a possible lower price. What would really be valuable is a service that told you what a particular unit auctioned for. That bit of information would be an eye opener.
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Old 05-17-2014, 08:38 PM   #7
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Quote:
Originally Posted by falconman View Post
... Would you be looking for a particular unit for a buyer? Or buying one and looking for buyers? I can't see how this is any different from every dealer now except you promising a possible lower price...
Since the dealer would be working on a fixed 15% profit margin, the business model would probably only make sense for high end units. Something like used Newells, Cornerstones, Newmar Essex or King Aire, etc.

I think the way that it would work best is if a potential buyer puts in a request for make and model and a range of years of interest. Then, when the desired used coach is listed for sale at a Dealer auction, you would get all the info to the potential buyer ahead of the auction, pictures and such, as well as a maximum price they're willing to go for. Then, at auction, you would bid below their maximum ... I also think these auctions also run online. So the buyer could be with you from the office actively participating in the bidding ... If wining bid, they would get an itemized list of all expenses. The dealer would just add the 15% commission.

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... As far as a business goes, I don't know what it costs to become a dealer or what the auction costs might be...
I'm guessing most of the expense is leasing some office with some parking spaces for a number of vehicles. In some places in the country, I guess the lease costs could be less than $25K per year. You would probably need to sell about 5 coaches a year to make a viable business.
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Old 05-17-2014, 08:54 PM   #8
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Our first Class A MH was purchased through a 'dealer only' auction. A friend is a dealer that goes to these and has done good in the past. We got a 2003 Holiday Rambler Endeavor with 5700 miles in 2004 for $80,000. The book that that time was $147,000 so we made out real good. The MH was in real good condition and the only thing that needed to really be cleaned was the micro wave oven.
There are some good deals out there, one just needs to be in the 'right place at the right time'!
Nice. You got your unit for about half of book value.

If you're still in contact with your friend, if you could ask him if he has seen Newells, Cornerstones or King Aire's at Dealer Auctions. That would be great. Just wondering how much of a saving that could be.

There may be some bank repos that make it to Manheim or other such auctions.

In addition, if your friend wants to do something like what I have described above, I may want to talk to him in the future for when I'm ready to buy my used rig.
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Old 05-17-2014, 10:00 PM   #9
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Nice. You got your unit for about half of book value.

If you're still in contact with your friend, if you could ask him if he has seen Newells, Cornerstones or King Aire's at Dealer Auctions. That would be great. Just wondering how much of a saving that could be.

There may be some bank repos that make it to Manheim or other such auctions.

In addition, if your friend wants to do something like what I have described above, I may want to talk to him in the future for when I'm ready to buy my used rig.
Problem with Alaska, is that we do not see many of the nicer upper end MH's.
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Old 05-17-2014, 10:51 PM   #10
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I was a used car dealer, wholesale. I purchase the trades the dealer didn't want then reconditioned them and sold at auctions. Sometimes I would call a dealer and sell him a car for just the buyers fee if their wasn't room for me to make a reasonable profit to handle it. I also was used car manager for new car dealerships. Lots of auction work. The way our economy fluctuates I would hesitate to stock used RVs. What may work well is to establish yourself as a broker and take a person to the auction. You can also work with dealers to bring people to their store. Better to start small this way until you really learn how the business works. Sounds like fun, good luck.
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Old 05-17-2014, 11:01 PM   #11
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I was a used car dealer, wholesale. I purchase the trades the dealer didn't want then reconditioned them and sold at auctions. Sometimes I would call a dealer and sell him a car for just the buyers fee if their wasn't room for me to make a reasonable profit to handle it. I also was used car manager for new car dealerships. Lots of auction work. The way our economy fluctuates I would hesitate to stock used RVs. What may work well is to establish yourself as a broker and take a person to the auction. You can also work with dealers to bring people to their store. Better to start small this way until you really learn how the business works. Sounds like fun, good luck.
I would gladly pay a dealer the 15% markup for a desirable RV at a dealer auction. I just wonder why no one has tried this business model. The dealer takes an order for a specific make and model of RV. Once the RV shows up at an auction, the dealer bids on behalf of his customer and makes a quick 15%.
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Old 05-17-2014, 11:15 PM   #12
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Dealer auctions are cash only...right?

I don't know, but Dealer only car auctions often are cash only.

Best luck if you can make it work.
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Old 05-18-2014, 01:59 PM   #13
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... 2- In addition, offer each buyer of a coach from auction a Silent Partner position in the dealer company, with a certain percentage profit sharing from the company transactions in the future ...
BTW, this part of the Business Model may seem strange, but there is a rationale for it ... A happy buyer and investor is most likely to be a repeat customer... A happy buyer of a coach at cheaper than buying from a "regular" RV dealer can also sell his coach later at a better price when it is time to upgrade.

There has got to be some smart existing RV dealer out there hungry enough for this idea ...

Just saying!

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Old 05-18-2014, 03:10 PM   #14
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Have a good friend who is a dealer, when I told him I was looking for a new coach, he took me to two deal auctions. They are every two weeks in my area.

There were lots of coaches at both auctions we went to with fairly good deals, but there were zero high end coaches. Most coaches were lower end coaches with some middle of road stuff mixed in. Saw some great deals, but lots of gassers, lots of entry level coaches, lots of older stuff, etc. Both times we went my buddy bought rigs, one time he bought a rig for $5K and drove it home, lol.

While I like your creative thinking process, just not sure there is a market there.

Most people with higher end coaches are either going to sell their used coaches outright or trade them in at a dealer when they buy a new one. Most of the time when coaches end up at auctions is when a dealer who took a coach in on trade can't sell it and wants to get rid of it; or a finance company repossess one and wants it off their books.
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