Quote:
Originally Posted by David70
Supply and demand is not simple. It's difficult to know the correct selling price to maximize profits. Most aren't short sighted & finding examples of people that were wrong is very simple, knowing it before it happens is difficult. In this example the dealer thinks he can get MSRP, none of us know if he is correct or not.
I am in heavy equipment sales & nobody knows for sure what the next person will pay. Goal is to get as much as possible for each sale but also not to have equipment sitting and goals are set at the top. This isn't greed but instead good business and you can find it in every product made.
People sell houses every day, some price them too high and they sit, an offer comes along you don't take and you later wish you did, some sell quickly and they could have gotten more. The best realtor in the world only takes an educated guess but isn't certain what will happen.
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No it's not as all new consumer goods come with a calculated MSRP and you added in one industry in real estate that does not and isn't really a comparable. Dealers can sell for more or less than MSRP but everyone that walks into the dealership knows the MSRP and it's a matter of risk tolerance and greed that dealers work with when they choose what price they will let that car go for. I'm not sure what heavy equipment you sell but if you don't have an MSRP (with discount structures for distributors and end users) and are basing your pricing on what the next person will pay I would have to question your business model. If you are selling used equipment then again you are talking apples to oranges.
For the record I don't have any issue with dealers selling at MSRP as that's the recommended price where dealers make fair money. It's more of an American thing to get big discounts on vehicles and as we Canadians don't have the same amount of haggle room. I do however have an issue with ADM as I will never, ever pay it on principal as you are paying more money for absolutely zero value other than filling the pockets of a dealer.