I have been working for a machinerey dealer for a few years and he wants me to take over the business, I like the business but I am wondering if there is much of a future. I know people will always need machines and we have no trouble selling them but making a profit and selling them is two different things. I have been watching the profit margins shrink alot in the past couple of years as the supply of machines increases and the demand decreases and the number of people selling goes up. Plus the internet has really standardized prices of stuff, a used kurt vise is 200 bucks a bridgeport J head in good shape is 1500-2000 and if you can sell it for 3000 you are real lucky. Any way I know you cant predict the future but maybe alittle advice would help. One more thing we have 10,000 sq ftbuilding and 10 shipping containers 2 semi trailers full of manual mills and lathes and 11 forklifts and about 600 machines in stock.

On the East Coast I don't see much future for the sorts of machines you sell, but you might have a niche market in your part of the country that does ok..hard to say.

I dont see much of a future either for what we sell we bought 4 mills at an auction on thursday and we outbid end users and a few dealers. We bought Laguns and only paid 2500 each and they were in great shape. I think we will be hard pressed to get 3500 out of them. I need to get into cnc but I am totaly clueless about them.

I'm totally mystified how the owner of your place actually makes any money. Just seems like with the overhead of paying you and maybe he has a secretary or bookeeper, maybe some advertising....and with sales so slow and at less profit...how the heck does he make any money to be buying yet more machines ?

Does he have a major nestegg from past glories that he keeps drawing on ?

And cramming machines into containers and trailers seems ridiculous...how can anyone examine them and how do you get a machine out from the front of a trailer without removeing everything else first ?

I think one way to move the manual machines would be to provide assistance with shipping arrangements. It seems like those with a lot of shipping experience just can't comprehend why others find it so daunting. A lot of HSMers (and others) simply will not consider a machine when they have to figure out how to ship it.

If a used machinery dealer could tell a prospective customer, "I can ship this machine to a freight terminal XX miles from you for this many dollars." Then explain to the customer how to go about retrieving the machine from the local terminal (maybe a pamphlet or FAQ on the website?). It could spur some sales, particularly if the dealer effectively advertised this aspect of the operation (iow, big "we make shipping easy" banner on webpage).

Why does he want you to take over? Is he retiring or does he think the bottom is falling out and not want to be the one holding the bag?

have ya got a bench top PW horizontal mill?

A very good point,.......... don't know if it's in the USP bracket though.

On the same theme and taking it a step further, to be told as a customer ;- to have us put this machine, in your shop, will cost $X firm (that's important) would not only be a refreshing change but help no end with budgetting.

Extra hassle for you? maybe,.......... but if it helps you sell machinery for shall we say a reasonable profit?? .......... could well give you the edge.

I am not in the US but over here I see 2 types of dealers

the first type High volume little profit They sell a lott to other dealers And have easy acces to machines They buy whole machineshops at once and try to sell from that place

The other dealer buys 1 machine at a time for the right price Is really looking out for a good deal They buy machines they are familiar with or rare machines And try to make a bigger profit They are a bit specialized like in pristine machines, big machinery or specialized in some brands or type

If you have 600 machines in stock you seem to be one of the first type
With that volume you need to sell 1200 machines a year at least (if you were over here)
If your shop is not managing that volume perhaps it is time to shift a bit more to the second type of dealer


Peter from Holland

In Australia the second hand dealers seem to hoard equipment, right now they are bulging at the seams and still want their 1000% markup. It's getting to the point where they can't cram anything more into their sheds. The thing is they want anywhere up to $7000 for a 1950's Cincinatti 2MI horizontal mill with no tooling at all. They're not selling but holding out for the glory days of old rather than cut prices, some even seem delusional about their stock. I often wonder about the cost of a container from the USA west coast to Australia.

There's a well maintained, massive, heavy lift plane always sitting on the tarmac at the local airport, a mate made queries about it: $50K to take a load from Australia to China and return with a load so maybe a similar price to America. The advantage of this is saving the 2000 KM trip from the usual sea ports and bypassing the extortion to release a container from the shipping agents. I dunno what I could export on the trip out, maybe NZ kiwi backpackers.


http://www.factoryhub.com.au/Tig/UI/...095&p=10621535

I have noticed the same thing, I will be in the market for some more machinery in the next 12 months, I have done some research and even with shipping costs, import duties and a trip to the states to inspect I will still be able to get what I need for less than half the cost.

This design is more popular in the UK: http://i.pbase.com/g4/42/673742/2/61709422.NHFdItiw.jpg

You need to become more global and find the right contacts to export the stuff. Putting stuff on ebay can get you those people

Brace yourselves folks, we dont advertise at all we have no website the owner doesnt have a computer and we wont ship anything. The owner is 69 and he is thinking about retiring. I only work a couple of days a week we are good friends and I mostly use my paycheck to buy more machine for my shop. Our prices used to be in the stratosphere but I started showing him what stuff was selling for on the web and we have adjusted our prices but we are still bursting with machines we sell a couple of machines a month on average, we get 3-4 people a week coming in and maybe 5-6 phone calls a week about machines. I started putting stuff on craigslist and people would come in and say I have lived here all my life and I never knew you were here. We had our best year ever last year because of me advertising on craigslist. We are sort of a mix we wont sell a machine that we have not gone through everything must work we put new nuts in the mills we repaint them basically refurbish not rebuild. We lose money on most machines if you count the time we spend. The owner works like a dog seven days a week 12 hours a day fixing stuff. I just dont know if it is a viable business even if I went nuts on the web selling stuff.

OK, so where does the money actually come from to keep going and buy yet more machines ? Is his wife a DuPont or is his building paid for and he lives in the building (or a mobile home on the property) or what ?

no idea if they are any good or not but the link hasa online shipping calculator for rates fro mus to any where.
Somehow I thought it was about 2000-3000 to ship a full container from China to USA. probably double that for laoding and unloading fees and the drive to and from ports.
How does Aus deal with customs duties on used machines? I belive the UK does not charge VAT on tools over 100 years old. no idea on export/import fee. Good luck proving to a customs officer on his computer that a 50 year old tool with no paper work is 50 years old and the company is gone so they have no records.
Bill D.
http://www.shippinginternational.com/faqs.htm

"I only work a couple of days a week we are good friends and I mostly use my paycheck to buy more machine for my shop."

Sounds like he's found the ideal employee. No wonder his business is still afloat!
You work hard enough on the days you're there, so it seems like you're really full
time. Then you plow all you wages back into the place.

If you left he'd fold rapidly I bet.

Joking aside the issue of shipping small machines to small customers was one thing
dave sobel seemed to have down pat. I suspect it was one reason he stayed in
buisiness as long as he did - that and having a very firm knowledge of what the
HSM type person really wanted, and would spend money for. He knew how to
palletize, shrink wrap, and he had a pickup service that would come with a lift
gate truck, and send the goods on the way. I think it was some kind of air freight
fowarding outfit. I thought it would be expensive but he said it was cheap at
twice the price.

Jim

the home shop market is at best a side line for a dealer, simply not enough money there, deals take too long, shipping is ALLWAYS a problem, you often are selling to someone who is working on an entirely different criteria than you, ie there interest is some historic detail vs does the machine make money? On top of this a used dealer in small manual machines is basically competing against HF and Grizzley. I don't know how often I had someone bring a Grizzley catalog into my warehouse to compare some old Monarch to and then act like I was trying to screw them. Also, you can not put the time into cleaning and painting a 1000 dollar machine and make any money on it, much less repairs if you are a real business, not a bad part time deal thou.

Agreed and your reminder of this makes me even more mystified how this guy makes enough money to keep groceries on the table, much less buy yet more iron. kpotter, what's the most profit on any one machine this guy has made in the last few years ?

So you are all wondering were the money comes from, I know the secrete, He is still driving his first truck, a 1963 chevy it is painted yellow with a brush and is bent from loading machinerey on it he pulls his own teeth, he puts patches on his clothes himself he is not married he drinks powdered milk and everything is paid in cash he owes no money to any one. He is the most frugal man alive. I dont think I could run the business like he does since I am not willing to work seven days a week all day all night.