From: Edward Morgan (morgan54801@yahoo.com)
Date: Tue Jan 21 2003 - 10:56:56 PST
Steve,
You site an example of somebody making a 4X profit on
something, and paint all the dealers with the same
brush.
If some guy wants a certain truck, usually the best
one, he will out bid the dealers. The dealers bid the
same amount on all the trucks in the row, and get
what's left over after the spot bidders. After taking
the good parts off the scrap trucks, to fix the other
trucks, all you get is scrap metal price for what is
left, less then what you bid. The dealer needs to make
something so he can bid again, make a living, and pay
the help.
All these people pay taxes, so the IRS gets their
share without getting their hands dirty.
Ed Morgan
--- Steve Grammont <islander@midmaine.com> wrote:
> Hello Neil,
>
> >I was merely pointing out that your statement seems
> to exclude dealers
> >from the
> >group of people who bought the thing in the first
> place, when in fact
> >they are part of it.
>
> They are a miniscule part of it, agreed. If a
> dealer makes $500 profit
> on the resale of a $5000 vehicle bought from GL for
> $2500, I might see
> about $0.0000000000000000001 "profit" for the sale.
> The dealer realizes
> $500.0000000000000000001. This is fine with me
> provided the dealer
> EARNED that $500. Making $5000 profit off a $2,500
> GL purchase is not
> something I find defensable.
>
> >I believe in capitalism and supply and demand.
>
> I do too. Nothing I have said runs contrary to
> that.
>
> >The U.S. has a method (known as the
> >patent office) that enables people to have
> exclusive right and benefit
> >from their
> >own ideas and make money on them. This is what
> promotes capitalism. I
> >don't get mad
> >at the guy who patented something and made millions
> because he didn't spend
> >anything for the original idea. I might wish I had
> the idea, but I don't
> >curse the inventor.
>
> Are you saying dealers invented the vehicles they
> are reselling? They
> obviously did not, so this has no relevance to the
> dealer. However, your
> point is quite valid, even though it supports my
> line of argument ;-)
> Taxpayer moneies funded the R&D and production of
> these vehicles.
> Therefore, it should be the patent holder and/or
> investor that benefits
> from said patent in a free market economy, not an
> end use middle man. In
> the case of ex-MVs, the taxpayer might not always be
> the patent holder,
> but it is always the investor and ultimate funder of
> the development and
> goods produced for Government use. Dealers don't
> even enter into this
> part of the equation, other than being a taxpayer
> like everybody else.
>
> >The amount of markup a dealer charges is their
> decision. If they can get
> >their money, more power to them. If not, their
> price drops.
>
> This is fine so long as the supply, i.e. the Gov't,
> is doing all that it
> can to ensure that the price of its items are being
> sold in proportion to
> the market rate. In other words, *all* parts of the
> system must be
> trying to sell for maxium yield, not just the
> dealer. If the Government
> is NOT getting full value, then there is a problem
> that needs to be addressed.
>
> >The buyer should have done his/her homework.
>
> If the end user is shut out of the bidding process
> because either the
> system is too complicated for a one off purchase (a
> huge criticism of
> DRMO from what I gather), items being sold only as a
> lot, or business
> making sure they outbid the little guy... then the
> it doesn't matter what
> homework he does. If I know what x was sold for by
> the Gov't, but if all
> the dealers have marked it up times 10 over without
> doing any work on
> them, I only have the choice of buying it or not.
> That is a
> disfunctional Capitalist system, one in which the
> taxpayer is on the
> losing side of the equation.
>
> >The dealer takes the
> >risk of purchase, why should it not be rewarded?
>
> It should, but not disproportionally to the amount
> of risk/work the
> dealer puts into it. Because if the dealer is
> making significantly more
> than that, then our Government's designated agents
> (GL) are not doing
> their jobs correctly.
>
> >They buy trucks that don't run, too.
>
> I fully understand this. There is no question about
> it... dealers have
> costs and risks. They can also add value to
> something purchased directly
> from the Gov't. In fact, I would rather buy from a
> dealer, and take a
> reasonable premium hit, than to buy direct from GL.
> There is no point in
> arguing over something we agree upon.
>
> This discussion is around because some suggest that
> GL should make sure
> people can buy the stuff cheap simply because...
> well... because or that
> there is nothing wrong with dealers setting market
> rate without GL
> playing an active role. I was pointing out that
> Gov't surplus is not
> some sort of charity venture for the collector. It
> is also not a charity
> venture so dealers can make a killing on items sold
> too cheaply simply
> because they know the ropes.
>
> I remember when GL took over there were a LOT of
> cries against it which
> basically boiled down to "I've been buying through
> DRMO for decades and
> have tons of contacts which allow me to get an edge
> on anybody trying to
> get into this thing for a one off purchase. GL is
> going to make this
> process too open and therefore drive up the bids.
> That is bad for me,
> the dealer and/or collector, because I have enjoyed
> this system of
> priveldges. I want to shut out competition so that I
> can buy low and sell
> high instead of buy fair and sell reasonable".
>
> Obviously the transition to GL had, and still does
> have, problems
> associated with it. But the concept they are
> working towards is in the
> taxpayer's best interest -> get the maximum value
> back for the items
> purchased by the taxpayer for Gov't use.
>
> >I don't think the problem is really the dealers or
> any buyer. The problem
> >is the process (the government and/or GL). If you
> want maximum return on a
> >truck, then
> >take some time to determine what is wrong with a
> truck, so bidders can bid
> >intelligently.
>
> I agree. I would also go further... GL should make
> the process as
> transparent to Joe Citizen as possible. It should
> be as easy as eBay.
> This is something that GL is moving towards, and
> that is a very good
> thing for the taxpayer. They still have work to do,
> but I am pleased
> with the general direction it is taking as a
> taxpayer.
>
> Steve
>
>
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