Can I make $95k a year take home selling diesel pickups and cool used cars?

Right now I am an engineer designing foundry equipment, been doing in almost 5 years now. Upgrades, rebuilds, new equipment, you name it.

I have always loved selling cars, loved buying cars, but decided to use my schooling for good and am doing the engineer thing.

Living in Wisconsin, there is a very real shortage of nice used diesel trucks at reasonable prices. Anywhere south of the rust belt, the pool becomes a lot bigger. Is there money to be made buying the popular trucks (crew cab, short box, lots of options) and bringing them to Wisconsin for resale?

Just wondering if anyone can give insight as to if its actually profitable, if they think someone could make real money at a small dealer with themselves, a tech, maybe a receptionist/paperwork person, what to look for, where the best vehicles are, etc. I would not be opposed to starting my own dealership, and don't need to match salaries right away, I am not opposed to putting in the long hours either. If I could drive some cool cars around, make some money, and work for myself, I would be pretty happy.

I would figure I would sell 10 year old diesel trucks and modern sports/luxury cars that have taken the bulk of their depreciation like AMG Mercedes, C5 and C6 Corvettes, M3s and M5s, Audis, etc.

My uncle fantasized about bringing trucks from pa that had failed inspection due to minor rot and selling them yooperland (upper Michigan) but never got around to it. With Michigan's nearly non-existent inspection process leading to a lot of "friendly" vehicles (they wave at you going down the road) he thought he could sell a $500 Pa truck for a couple of grand up there

I've been told that boring American trucks bring unreasonable money in Australia. Shipping/customs cost will probably eat into profits though.

Think you can turn over 100 vehicles a year? That's about what it'll take if not more depending on the cost of the land/lot.

The short answer is, if there was money to be made by doing it, somebody would be doing it already.

The long answer is that to do it right, you need several things, each of which cost money, and each of which will need a piece of the pie. You probably want a buyer on the southern end. You need someone to transport the trucks. You need someone to sell on the northern end.

All of those people can't be you. If you're down south shopping for trucks and driving them back, who's minding the store selling the trucks?

So all those people need a cut.

I could go on. I don't see it as profitable as you. Feel free to prove me wrong.

EvanR wrote: The short answer is, if there was money to be made by doing it, somebody would be doing it already. The long answer is that to do it right, you need several things, each of which cost money, and each of which will need a piece of the pie. You probably want a buyer on the southern end. You need someone to transport the trucks. You need someone to sell on the northern end. All of those people can't be you. If you're down south shopping for trucks and driving them back, who's minding the store selling the trucks? So all those people need a cut. I could go on. I don't see it as profitable as you. Feel free to prove me wrong.

I actually completely disagree with practically everything in your post.

The OP's success will be based on the fact that he does all the work. The reason OTHER companies aren't doing it is that relative to the ROI they earn on their current (large) businesses, its not worth it to them. For the OP on the otherhand, he can make it work as a single employee and get to call all of his own shots. Small business is much more flexible in its dealings, and as such, can pick which business ideas work and don't with limited manpower.

I inhouse everything with my own business, it gives me great amounts of control AND keeps all possible profits (and cost savings) within the company. The only time I outsource is due to time constraints or if it is literally cheaper to go with someone else. And I am basically a glorified wholesaler, moving product from one place to another and reselling. But NO ONE ELSE DID IT.

Reasurch and even a field trip to an auction down south to see what they are selling for

Look around at what they sell up your way for.

Break out a spreadsheet and start filling in the blanks to see how the money settles out.

I have started several business over the years and this really. Is the only way to do it.

In short do the math.

HiTempguy wrote:

EvanR wrote: The short answer is, if there was money to be made by doing it, somebody would be doing it already. The long answer is that to do it right, you need several things, each of which cost money, and each of which will need a piece of the pie. You probably want a buyer on the southern end. You need someone to transport the trucks. You need someone to sell on the northern end. All of those people can't be you. If you're down south shopping for trucks and driving them back, who's minding the store selling the trucks? So all those people need a cut. I could go on. I don't see it as profitable as you. Feel free to prove me wrong.

I actually completely disagree with practically everything in your post. The OP's success will be based on the fact that he does all the work. The reason OTHER companies aren't doing it is that relative to the ROI they earn on their current (large) businesses, its not worth it to them. For the OP on the otherhand, he can make it work as a single employee and get to call all of his own shots. Small business is much more flexible in its dealings, and as such, can pick which business ideas work and don't with limited manpower. I inhouse everything with my own business, it gives me great amounts of control AND keeps all possible profits (and cost savings) within the company. The only time I outsource is due to time constraints or if it is literally cheaper to go with someone else. And I am basically a glorified wholesaler, moving product from one place to another and reselling. But NO ONE ELSE DID IT.

I dig what you're saying. Problem is, the OP can't be in two places at once. So when Joe from Kenosha stops by your lot because he sees a RAM2500 that catches his sye, but nobody's home to sell him the truck because you're off in Biloxi buying another one, he might wait for you to get back, or he might go buy a truck someplace else.

He is talking about a niche though. People will wait for a niche. Dealing with typical slack-jawed yokel buyers is a fools game with low returns. Niche is where it is at.

He can bring clean, low mileage, rust free units north and sell them for a premium. By using word of mouth and effective advertising (like on craigslist), his clientele will grow. He basically should start off as a glorified curber and work his way up, not open a lot with $1mil in inventory right off the bat.

Local guy just opened a lot in lake county, il. Only things on the lot are white work trucks. Looks like his inventory is turning over well. Maybe buying out a big companies trucks as the cycle them out of service (Union Pacific, att, utilities...). Like others said, work the math.

In reply to 93gsxturbo:

Can you use some time-off from your current job to try it out? Make a trip or two south and buy a couple trucks, see what you can sell them for up there and whether you turn enough profit? If you get that far, then you can work out details of how to scale-up your operation. In the mean time you still have your day-job.

I agree with EvanR. I also think you'll have to bring more than one truck up at a time. Since you'd be selling big trucks, not minis, your transportation costs are going to pretty expensive.
Are you thinking that you'll buy at auction, or private sales? Will you need a dealer license in WI, or will you need a license in each state?

Do you know much about modern diesels? I ask because if you buy one and discover when you get home that it needs engine work, paying a diesel mechanic will wipe out any profit margin you had hoped for. If you can fix it, then you should be okay. I don't know about your area but here in Ohio a clean unmolested diesel with less than a bajillion miles will definitely bring a premium. The Euro stuff doesn't sell very well at all. I agree with the try it small idea. Find one or two, use nights and weekend's to get them home and ready to sell, and just see how it goes. Decide if it's worth the effort. Make sure you get a pinky ring and some white shoes.

I've thought about this as well. Not sure I could make it work.

My advise would be to buy as many units on one trip down south and have a place to store them. Buy 8-10 units and store them until it's time to ship them all back north at once.

Make semi monthly or quarterly trips back south as inventory demands.

Problem is, by the time you find out it doesn't work you'll have already lost your ass.

I think it could be done but the key will be relationships.

$95k = $1k per truck moving 95 trucks per year or 2 per week.

Forge a relationship with an auction buyer in Atlanta who will sell you trucks for $1k more than he pays for them.

Forge a relationship with a shipper. To keep your shipping costs down and to get your trucks as quick as possible buy a full trailer load at a time. This could be 3 or 6 trucks depending if the shipper is pickup based or Semi based.
50 cents per mile or less as a price target. Lets say $500 per truck.

Forge a relationship with a car lot in your home town or a few car lots. Sell these trucks to these lots for a $1k profit each. This will mean that the trucks are now jacked up $2,500 more than you paid ($1,000 to buyer, $500 to shipper, $1,000 to yourself = $2,500)

To be able to add $2,500 your going to need to play with trucks of $10,000 or greater.

You'll need a line of credit greater than 10 x $10,000 = $100,000. I think $200,000 as a min.

Never let your Southern buyer met your Northern retailer or they'll cut you out.
This really could be easiest done buy the Southern buyer directly to the Norther retailer.

What you would be acting as is a Wholesaler. The key to Wholesaling being that you hold or "own" the vehicle for only the briefest point in time. The key here is that you are not dealing with the consumer and not waiting for the truck to sell. Sure, less money than the seller but through volume and quick sales you're turning your money more quickly.

Your other option is to be that Northern retailer and find a yourself a Southern buyer. You'll then have to deal with the buying (and mostly not buying) public. You will however then be able to make a profit off "Financing offers" to the public. Most of the money made by a car lot has more to do with the financing than it does with the vehicle itself.

^That's not $95K take home. There are several levels of taxes that will come out of that. The principle doesn't change, but I'd guess you need to be moving more like 150 trucks/year.

Sure. I only showed simple math.

I suspect it varies by state but wholesale activities typically don't pay sales tax.

I suspect that the current $95k salary is also gross and that he pays income tax on that as well.

Fudge factor: Yes, you'll need to move more than the minimum so as to be able to offset any "duds" that happen along the way.

Take a look at Lenz Truck in Fond du Lac. They do an expanded version of what you're talking about. They do all the brodozer or any highly optioned version of style trucks and SUVs.

http://www.lenzauto.com/

I'd be surprised if you could do 95k net annually early on. That would require making a lot of profit per vehicle, and selling several vehicles per week. Of course you can reduce profit margins, but that just means you have to sell even more vehicles.

If it were me, I'd try it with a vehicle or two to test the waters. See what kind of deals you'd find, how quickly they sell back home, and how much profit you're actually making by the time you account for costs associated with travel, transport, etc. If you find that there's substantial money to be made, then you can increase the stakes a bit at a time. My guess though, is that you'll find it to be a better supplemental income than full-time gig.

Keep in mind that selling vehicles tends to be a pretty seasonal business as well. Winters in the Midwest hurt sales/traffic so plan for lean months that time of year.

I am sure that there is a way to make money at this but you need to figure out a business plan that works for you.

Why not put a toe in the water and go south to buy a vehicle and resell it at home? You will learn A LOT about what is involved. Keep track of ALL expenses and time (cause when in business, your time is NOT free, and see what kind of profit you made. Your goal should be $50/hour. (or do it on a "return on investment" if that is more palatable)

Don't get discouraged if you don't hit target. Reflect on where it can be improved.

You also won't be doing this all by yourself. You are going to be moving a lot of vehicles and will be doing books, buying, selling and marketing the product. You are also going to be running/managing a repair/detail shop of some sort.

Here is the way I see this:

20k nice truck in Arizona is going to owe you 25k by the time it goes out the door. You want to clear 5% per truck so it has to sell for $26,125 or 27500 if you want to clear 10%.

If you want to end up bankrupt, by all means consider sports/luxury cars.....

On the truck note, I couldn't imagine the margins would be there since so many people travel for those same southern deals you intend to take advantage of and charge even more to those northern people.

Unfortunately many of the "one man operation"-oriented suggestions here simply won't fly. Since OP is in Wisconsin, he'll either have to get a dealer's license and staff a retail location for regular business hours five days a week, which is literally impossible to do if you're a one man operation, or take the risk of skating open titles across the country and into buyers' hands with every acquisition and sale. The third option to stay legal without a dealer's license is to do less than six every year, which sure won't net $95k. That's the law here, and it sucks, but it is what it is.

gearheadmb wrote: Do you know much about modern diesels? I ask because if you buy one and discover when you get home that it needs engine work, paying a diesel mechanic will wipe out any profit margin you had hoped for. If you can fix it, then you should be okay.

This would be my main concern as well. Modern diesels bring a lot to the table, but they also bring a lot to the table. Having owned both an old, anvil-type diesel (12V Cummins Dodge with a 5 speed) and a newer, more complex and more capable one (PSD Ford) I can tell you which one I prefer.

But I've long ago suspected I'm different. There's tons of 6.7 Fords and newer Cummins and Duramax plying the roads around here and not so many anymore of the older stuff. People like new, leather, power, etc. If you can find the good stuff, the stuff that's been well maintained, and under 100,000 miles, and avoid anything like the 6 liter 'strokes then you may avoid most of the mechanical issues.

In my world, the business model to have would be buying up all the rust-free 73-88 GM trucks I could find, installing brand new Vortec 350s with 700R4s, interiors, A/C, power windows and locks, a bluetooth stereo, and selling them as work trucks. You pick the color.

Where are you guys getting 1K a vehicle. I can pull more then that doing lease return Corolla's. Also you are going to need one hell of a line of credit, 300-500K plus to buy in bulk and sell, and your note is going to eat like 1.5-2K a month in interest plus bond fees. Figure to sell two a week you need at least 15-20 trucks on the lot or in transit. If you are not making a sold 3K a truck your in the wrong line of work, one bad injector or body pull repair is going to eat 4 trucks worth of profit unless you are doing the work yourself and even then at this sort of mileage.

Most important is you cannot hold your own paper where the money actually is in this deal without 8 figures in money to loan on that many truck. PP loan rates are so bad right now that you might be able to swing this though if you an be declared a dealer and have the paperwork and bond to do it.

Also if you have a shipper they are not going to do that volume unless you have a return fleet for them, nobody is going to go up north at reduced rates unless they are puling something back south and even then there might not be float in the shipping market to keep them coming up.

I'm sure it can be done, I'm sure there are folk doing it. I cannot think of any myself.

I worked at a small dealership years ago that was trying to do this. They are long gone now.

I've bought cars from small backyard type dealers that were doing this. They are all gone now. In fact they've all gone so fast I was never able to even shop for second car at any of them.

There have been folk here on this forum that have tried it, I've even sold to some. They too are all gone.

So the record just doesn't look good.