Thanks Tom.

Great post (and thanks for the private email also).

i

On 2011-08-03, Howard Beal wrote:

GeoLane at PTD dot NET wrote in message
...

I don't know any machine dealers personally, but I can tell you that
there used to be a few of them in our small town phone book 25 years
ago. Now there are none. It must not be an easy way to make a
living.

Right now you're doing ok because you're in an industrial area and
have lots of inexpensive product to choose from. You'll do OK for
awhile, but eventually the majority of good deals for those attending
auctions and factory closings will end.

On top of that, the bar to entering the business isn't very high. If
the economy turns around there will be competition from other small
dealers for the machinery, and your profit margins won't be as good.

I'm glad you're around to help those of us hobbyists, but don't quit
your day job.

RWL

I think you hit the nail on the head. In chicago there used to be 100 used
machinery dealers on lake street. I knew most of those guys, they were
for the most part a product of the post WW2 industrial boom. A lot of
them were father son bussineses. Had dinner with a lot of them, they all
had the same problem of the boom or bust cycle. Some of the younger
guy's insisted that globalazation was just another down turn and things
would return to normal eventually. They actually believed globalaztion
was just a fad!!! Some of them had an emotional attachment to thier
business and would do anything to save it. They used up thier line of
credit and at the very end were paying thier bills with credit cards.
Eventually
the banks took over thier property because they had taken out loans
to support thier business. In 2000-2001 i was getting calls, hey tom
you like that XXXXX come and get for free before the bank takes
it. The smart ones seen the wrighting on the wall and changed thier
bussines model. A couple of guys i know scraped everything they could
not sell right now. They converted thier buildings ( some of these places
3 to 5 stories high filled with machines and tools) to lofts or condos.
One dealer junked his entire inventory and is now a fine arts dealer
and converted his wharehouse to a gallery. They survived because they
were able to change thier business model and didn't beat a dead horse.

As far as buying cheap and selling cheap, it's a great hobby. All the guys
i knew ( the real machinery dealers ) would buy low and sell high. Your
not going to make a living making selling something for a couple of grand
every 3 months. The basic mode of operation for decades in used
machinery was to buy a machine bring it in to the warehouse. Clean it up
paint and repair if nessesary. The margins for decades was 10:1 Min.
often times more than that. And you have to cutomers for your machines
that are end useres ( factories). Developing contacts and buyers is very
hard to do in manufacturing. The purchasing agent has to know and trust
you. Cold calling won't work. Most of the time your gonna need an intro
from someone they trust before they even talk to you. Its like a big family
within a given industry, everybody nows everybody and they talk to
eachother.
If you get a bad rep your done. In todays ecconomy with outsourcing and
globalazation there is not much of a market for used machinery, i don't
think
you can make a decent living (Long Term) selling to the HSM market.

Just a small offering from my point of view after 32 years in business.


Best Regards
Tom.