Should I be a machinerey dealer

[gbent]

Craig has it best from the personal side, Ries and Barry on the business side.

Beyond that, what will you do with the old man? Those machines and you are the only friends he has in the world, and he can't get crosswise with the machines. If he couldn't go into the place and work on machines he would be dead within 6 months. Seriously, that shop is the only thing keeping him alive.

There are very many small businesses in many different market segments in exactly the same situation. If you figure out how to solve it, there is far more money for you as a business consultant than anything you have ever done in your life.

[kpotter]

We talked some more today about it and I figure it might be years because he would never let go unless he had to and I know his daughters will convert that whole place into a condo in san diego in the blink of an eye. I like working there for the tools so it is worth it for now but you guys have given me some good insight. I guess I failed to convey it but the inventory is very saleable it is not loaded with old stuff we have 60 vertical BP style mills all of them have been checked out painted and serviced I will post some pics this week and prices maybe you guys need a few.

[Ries]

Alongside your pick hits, you might want to post a simple, typed inventory list- that is, not pics and specs, but just a list that says- 8' D&K press brake, or Harig surface grinder, or whatever.

Right now, none of your tools are online anywhere, right?

So if I was looking for an ironworker or a horizontal mill, I would never know you have one.

[Steve's Hobby]

Right, lets see pictures, prices, freight carriers.

I'd like a nice 3 axis powerfeed Lagun or Bridgeport and a nice K & T

or cincy Universal or Vertical-What do you have ?

[Milacron]

Since we're talking pictures just another plea for photos of the outside of this place. I'm curious what the general "lay of the land" is there.

And how do you operate these gas and diesel forklifts inside the building without getting sick and/or getting diesel smoke particulates landing on the machines ?

[Michael Moore]

I'm wondering if the site has a potential toxic waste issue. Some places I've seen have clearly had waste oil/solvents dumped out onto the dirt for years and years. I doubt you'd want to deal with that kind of thing.

cheers,
Michael

[adammil1]

I didn't realize that Reliable was in such bad shape, I guess seeing how aggressively they work their sector + eBay awards and turning over tens of millions in merchandise I assumed they were doing something right, I guess not.

As for the original question, here's a thing when I first started looking for machinery for my shop I stumbled upon what was an old boys network full of hole in the wall places with tons of machines, I now have my favorite stomping grounds but the biggest issue I had is why did I need to find them, why not have them find me? I mean most of these guys just had their network and when you stumbled in you felt like you were entering a secret group!

I think a website with good pictures and prices is a must! I don't understand why so many of the dealers with websites don't place their prices. Next try offering a lot of tooling I think that brings in casual shoppers. You may want to take out adds in hobby circles like livesteam magazine, the gas engine groups, in the northeast we have cabin fever does the south west have similar you ought to go. I don't think the hobby market is a total write off. 2 things are happening, 1 the baby boomers are retiring and 2 the internet is really changing the scope of the hobby world. A guy can network and provide a set of castings with 10 different people around the world for their favorite engine. Even if there are no clubs to support your hobby in your area with the help of the interent you can find people who share your intrest not too far from home and at the same time solicit help from as far as Australia. All and all I think this should be good news for the hobby world.

How about instead of trying to take over the buisness you devide the roles, let the old man focus on bringing in and refurbing machinery and you focus agressively on moving it out the door.

Adam

[Meridian]

How to make a small Fortune selling Machinery to the home shop crowd:

1) Start with a Large Fortune!

Been there, done that, still have the T-shirt.

Kpotter, you said it yourself, the margins are too narrow. That trend started about 9 years ago and I don't see it reversing unless Al Gore uninvents the internet.

Regards,
Dave

[Milacron]

Originally Posted by adammil1

I didn't realize that Reliable was in such bad shape, I guess seeing how aggressively they work their sector + eBay awards and turning over tens of millions in merchandise I assumed they were doing something right, I guess not.

Good god man, now you've gone from one exteme to the other. No one said Reliable is in "such bad shape". I'm just saying they probably never were quite as high on the hog as many think and now are probably making money, but not nearly as much money.

[adammil1]

Quote:
Originally Posted by adammil1
I didn't realize that Reliable was in such bad shape, I guess seeing how aggressively they work their sector + eBay awards and turning over tens of millions in merchandise I assumed they were doing something right, I guess not.


Good god man, now you've gone from one exteme to the other. No one said Reliable is in "such bad shape". I'm just saying they probably never were quite as high on the hog as many think and now are probably making money, but not nearly as much money.

Well,

I was simply responding to this quote!

One of the kids that work there said that they do the 3 day auctions when they need to turn the inventory becuase they are short on cash. It doesnt sound to be all that grand there. I have also seen other incidents of items going for less than they paid at los angeles auctions.

I guess the question is, is Reliable doing a good business or not with eBay? If yes can you shape your business in a similar way?

Adam

[Milacron]

Originally Posted by adammil1

Well,

I was simply responding to this quote!

What "some kid that works there" says in any snapshot of time may hint at things but doesn't necessarily mean much in the overall picture, which is what I'm looking at. The point is we don't really know Reliable's situation but can make guesses based on a number of factors.

The reason I'm guessing they are still making a little money is that if they were consistantly loosing money they'd be better off to just sell all inventory, sit on that cash and shut down for awhile until things get better.

[JST]

Originally Posted by Milacron

The reason I'm guessing they are still making a little money is that if they were consistantly loosing money they'd be better off to just sell all inventory, sit on that cash and shut down for awhile until things get better.

Doing that might cost them some sort of 'In" that they have from being such a biggish player..... could be hard to get "in" again on the same terms after kinda stiffing everyone for a while.

Maybe not too, money screams.

[jim rozen]

"if they were consistantly loosing money they'd be better off to just sell all inventory, sit on that cash and shut down for awhile until things get better."

Being a highly rational person yourself, you might not realize that folks sometime
to some incredibly irrational things, for emotional reasons. He might be losing money
big time, but be in denial about the whole thing.

Consider: the owner seems to have NOTHING in his life but this business. Closing
that, is tantamount to committing suicide for somebody who can't see that he
is not the business.

Jim

[kpotter]

We dont run the forklifts inside we are wall to wall everything is on pallets. I would like to sell tooling we have mountains of it since we dont ever sell any of it we just pile it up in shipping containers, but I learned my lesson on why we dont sell tooling A guy came in and said he needs some collets so I go to the place where we store the R8 collets and we have at least a 2000 of them probably more and this guy starts looking through them and I have to stand there while he looks for just the right ones that say bridgeport on them and then they have to be perfect, well an hour later he has them and I tell him 5 bucks each and he freaks out like I am trying to screw him I let him talk to the owner knowing full on well that he would get his but thrown out and that is exactly what happened and then I get the I told you why I dont sell tooling lecture.

[kpotter]

I will get some pics up I will be taking some pictures of a mill for a member and I will post pics of the shop. If anyone wants some endmills I am thinking of trying to get rid of some we have thousands of them lots and lots of resharps how much would people be willing to pay I can sell them cheap if people buy a few at a time I mean more than 10 I dont want to sell one at a time.

[Milacron]

Originally Posted by kpotter

We dont run the forklifts inside we are wall to wall everything is on pallets. I would like to sell tooling we have mountains of it since we dont ever sell any of it we just pile it up in shipping containers, but I learned my lesson on why we dont sell tooling A guy came in and said he needs some collets so I go to the place where we store the R8 collets and we have at least a 2000 of them probably more and this guy starts looking through them and I have to stand there while he looks for just the right ones that say bridgeport on them and then they have to be perfect, well an hour later he has them and I tell him 5 bucks each and he freaks out like I am trying to screw him I let him talk to the owner knowing full on well that he would get his but thrown out and that is exactly what happened and then I get the I told you why I dont sell tooling lecture.

LOL..yeah tooling is a delemma because some of it should be valuable (thinking of CAT 40 mostly) and yet it seems to add almost nothing to the value of a machine to include it with it, but it's such a PITA to actually sell it seperately as everyone is so particular about what they want in that regard.

[adammil1]

I learned my lesson on why we dont sell tooling A guy came in and said he needs some collets so I go to the place where we store the R8 collets and we have at least a 2000 of them probably more and this guy starts looking through them and I have to stand there while he looks for just the right ones that say bridgeport on them and then they have to be perfect, well an hour later he has them and I tell him 5 bucks each and he freaks out like I am trying to screw him I let him talk to the owner knowing full on well that he would get his but thrown out and that is exactly what happened and then I get the I told you why I dont sell tooling lecture.

In Massachusetts we have Brother's Machinery, my favorite used machinery dealer. They have a nice sized warehouse and I think they do a good percentage of their business in tooling. It seems like every time I have been in there they have 2-3 people walking through at all times of day. Some of the tooling has prices on it, collets they have by the lista cabinet and there are prices, I think if I remember 5C's were X for hardenge with the threads in the back, X-$2 with no threads in the back and Y for other brands. Seems to me to be a simple way of doing things. They are oozing with machine parts and it is so much fun to walk through there. When you are done you bring your loot to them and discuss a price. I find if you go in there with X$100 in your pocket ready to spend you can walk out with a good deal of tooling in hand at awsome prices, I have brought them a pile once and said is $1500 good (I had just gotten a great job at the time and it was my last hoorah of big spending) and I did well and I think they did well too. Now $1500 is a Bridgeport worth of sales from stuff that would just be sitting on a shelf collecting dust.

Why not turn this into a place that is customer friendly and let people walk around. If you don't want to do that, how about a show room area with "sales" and prices clearly marked, stuff like that as well as good advertising will bring people in on a regular basis.

By the way does every customer that walks in the door require an escort? Most of the northeast machinery dealers I go to you walk in walk around and when you are finished negotaite a price. I would find it kind of wierd to have the dealer following me around for a hour or two watching me like a hawk.

The other big thing about selling tooling is it should be good for repeat buisness. Today I have a great lathe, and a mill that I intend to have for the rest of my life. I wouldn't buy a vertical mill from you ever, as I already have one and if your lathe wasn't an awsome machine at a killer price, (which you probably wouldn't want to do) I wouldn't buy one either as I already have one. Now tooling I wouldn't mind paying good money for good tooling if I don't have it already. For an owner as frugal as that guy is I can't believe he would overlook hundreds a week in potential cash sales.

Adam

[kpotter]

I am not kidding when I say that we might get 2-4 people per week if we are lucky some weeks we get no one coming in I would let people walk around but the owner is so afraid that someone is going to steal something that no one is allowed anywhere in the store he actually pushes people out the door if they get to nosey he thinks everyone is a thief. If I was to takeover I would have years of public relations to mend. It is hard to see stuff because it is so jammed together and if you actually wanted to look at something we would have to move ten machines to get to it. I usually just walk on to of the mill tables to get to stuff.

[Michael Moore]

Don't you have a freight scale? Weigh everyone as they come through the door and again when they leave. I'm sure you'd spot someone who tried slipping a Kurt vise down the front of their pants.



cheers,
Michael

[lungfish]

Originally Posted by GregSY

A bit off topic, but I've found that whenever I meet 'old men' who are that frugal they also extend the savings to things like shower/bath/soap/toothpaste exepnses.

Hey, that's true! The older I get, the less I shower ...

But in any case, used machine dealers here make most of their money from
selling full container loads of machines to places that are still in labour intensive
manufacturing, such as Pakistan, India and South America. They go for old high
quality Swedish machines rather than new Chinese machines that cost the
same. Obviously you need to be visible on the web to attract this kind of
interest.

Since the financial crisis started, their sales have dropped off
dramatically - one said from 3 million sek (300k euros) per month down to
a couple of hundred thousand. But things look like improving at the moment.

RE CNC machines, I'd be wary about that. The problem is that the
obsolescence rate for CNC machines is much faster than for manual machines.
Manual machines are basically the same since they were invented. But the
digital technology in CNC machines is constantly improving, so old CNCs
lose value very fast.