Through the Eyes Of the Bold, Part 1

Through the eyes of the bold are nothing but opportunities. The eyes of the bold see green grass, blue sky and pleasant weather. There is not greener pasture because it is green everywhere they look, even in today's market--matter of fact--in any market.

In this series, I will give you some examples of the opportunities that are all around you. I will begin with inventory and the current market.

In the last few posts, I did two posts on Old Inventory Is Like Bleeding To Death, Part 1 and Part 2. Once you get a handle on moving your inventory in a timely manner, you can take advantage of some of the things I will discuss here. Those with weak stomachs turn away now!

When the stock market is down, it is not all down, and even if it was, there are people who know how to make money in that game. Most people lose in this market and many just because they panic and think very short term. The money makers are eagerly awaiting the opportunities that the panic-stricken create for them. To the money makers, it is found money!

That scenario applies very nicely into this current market in commercial trucks. Now is a great time to buy some nice, past year models from some desperate dealers and turn a very nice profit. I'll give you some recent examples. Many Ford dealers signed up for the new LCF (Low Cab Forward) tilt cab truck that is a joint venture with International out of Mexico. It is a good addition to the Ford lineup to me. It is a good truck and has some great features and benefits to sell. Each dealer had to order five units to get the 'franchise' and a year later, most of them still had the majority of them. They came out as 2006 models and in August of 2008, there are still some on dealers lots. Not good for the dealer paying the flooring, but what a great opportunity for someone like me or my partner who knows how to market and sell that truck!

Almost a year ago, we would offer them $10,000 off invoice which includes the final Ford incentive and they would take it just to get rid of the truck, we would turn around and sell it and make $4-6,000 in a week to two weeks. Sweet! My partner sold four of them in one month--all 2006 LCF's. Now, I would offer $15,000 off invoice and I'm sure there are dealers who would love to take that and be done with it.

Almost all those dealers that I am aware of that originally had the LCF 'franchise' have now, dropped their inventory to zero and Ford now has a much smaller market of dealers. Ford could have, and still can do a more effective job of the way this truck is marketed, but I am guessing it will go away as a result of this past problem unless the really strong dealers pick up the slack. That's too bad--except for Isuzu and UD.

Auto dealers in general are very sensitive about past year models being around very long after the new models are out. I understand this totally, but there are huge opportunities for profit on them that you cannot find on the new models. So, you sell all your old models so you aren't paying all that flooring and then go out and make some deals on some old stuff from some more desperate dealers. It's not taking advantage of them really, it is giving them an opportunity that they are not getting elsewhere.

Right now it is the first of September, 2008 and the 2009 models are out and on the road. There are quite a few 2007 models around and many of them are over 500 days old. There are some very nice opportunities there for some sweet deals. In addition, you will find some dealers who have a weak commercial department having a fire sale to reduce their inventory. This is another opportunity for the opportunity seekers. You may also find dealers who want out of the commercial market and have a bad taste from the inventory. You can make a dealer very happy and make a screaming deal buying their entire inventory! I did that when I was working for the body company and another body company was desperate to get rid of a lot of trucks they weren't moving. I bought 72 trucks in one fell swoop and made a great deal. I sold all the trucks in less than 90 days. The ones I thought might be the hardest to sell were the first to sell. Sweet!

You see, past year models is not nearly the problem to commercial truck buyers that they might seem to be for retail buyers. The typical commercial truck user is not making an emotional decision. A new truck is a new truck is a new truck.

The only time it gets a little testy is when the manufacturer is offering some financing incentive like 0% financing or some other really low rate and they have dropped that on the past year models. That is one of the reasons that some dealers are so strong about moving out the old inventory. Rightly so. I understand the problem. Yet, don't let that stop you, just be aware of where you stand relative to the current incentives. This will help you determine what to offer the other dealer so you can market the truck effectively and profitably.

You need to be able to see the opportunities when you look at the truck the other dealer has. See how you are going to market it and whether or not you need to swap bodies with something or some other modification. Maybe you will only put some Alcoa wheels on it and a full detail. Some are easier than others. I bought an Isuzu NRR from a dealer in LA one time that was 2 years old brand new. It had a flatbed dump of questionable quality on it and I saw a profit with a van body on it. So I made an offer, bought the truck, put the flatbed dump on another conventional cab chassis and bought a van body for the Isuzu. We sold it before it got to Northern California and made about $4,500 gross after all was said and done.

You do have to have knowledge and some marketing savvy, but mainly, you need courage and conviction and the most important thing: confidence. Will you make a mistake? Probably, but look what you will make in the meantime and that will offset all of your mistakes. Besides, there's another reason to do this: It is pure fun! I absolutely love it. I love finding things people can't sell and then sell it. It is one of my favorite things to do. It is a thrill. Better than the best roller coaster. I have gotten good at it over the years too. That gives me more confidence.

Consider this quote from Rollo May: "The opposite of courage in our society is not cowardice, it is conformity."

More tomorrow!

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