NOTE October Unofficial CHANGE OF VENUE

On or around Thu, 13 Oct 2005 21:54:36 +0100, Steve
<[email protected]> enlightened us thusly:

>Graham G wrote:
>
>>> Not exactly. to be a parallel with farming, you build a car and then the
>>> dealer tells you how much he's prepared to pay for it, and if that's less
>>> than it cost to make it, tough. AIUI.
>>
>> Spot on, thanks Austin
>>
>>
>
>But the dealer sells it for what he thinks the market will stand.

indeed. However, the final selling price in the analogy would not be
related to the manufacture price, it'd reflect a nice fat mark-up on the
price the dealer decided he was prepared to pay for it - or rather, the
dealer would decided that the market could stand price X and would offer the
manufacturer X/2
--
Austin Shackles. www.ddol-las.net my opinions are just that
"You praise the firm restraint with which they write -_
I'm with you there, of course: They use the snaffle and the bit
alright, but where's the bloody horse? - Roy Campbell (1902-1957)

On Fri, 14 Oct 2005 07:46:11 +0100, Austin Shackles
<[email protected]> wrote:

>On or around Thu, 13 Oct 2005 21:54:36 +0100, Steve
><[email protected]> enlightened us thusly:
>
>>Graham G wrote:
>>
>>>> Not exactly. to be a parallel with farming, you build a car and then the
>>>> dealer tells you how much he's prepared to pay for it, and if that's less
>>>> than it cost to make it, tough. AIUI.
>>>
>>> Spot on, thanks Austin
>>>
>>>
>>
>>But the dealer sells it for what he thinks the market will stand.
>
>indeed. However, the final selling price in the analogy would not be
>related to the manufacture price, it'd reflect a nice fat mark-up on the
>price the dealer decided he was prepared to pay for it - or rather, the
>dealer would decided that the market could stand price X and would offer the
>manufacturer X/2

actually the dealer sells it for what the manufacturer tells the world
it costs, minus a discount out of a fairly tight margin (7.5-10%).
They get bonuses based on volumes.

I suspect margins are higher on used cars than new ones, and the
dealer isn't in control of prices. Most are now competing with "but I
can get this price in the next town" or "Google says...".

Which is why servicing is £85 / hour....


--

Tim Hobbs

'58 Series 2 88" aka "Stig"
'03 Volvo V70

>>But the dealer sells it for what he thinks the market will stand.
>
> indeed. However, the final selling price in the analogy would not be
> related to the manufacture price, it'd reflect a nice fat mark-up on the
> price the dealer decided he was prepared to pay for it - or rather, the
> dealer would decided that the market could stand price X and would offer
> the
> manufacturer X/2

Spot on again, its a ludicrous situation really.

Graham

In message <[email protected]>
Austin Shackles <[email protected]> wrote:

> On or around Thu, 13 Oct 2005 21:54:36 +0100, Steve
> <[email protected]> enlightened us thusly:
>
> >Graham G wrote:
> >
> >>> Not exactly. to be a parallel with farming, you build a car and then the
> >>> dealer tells you how much he's prepared to pay for it, and if that's less
> >>> than it cost to make it, tough. AIUI.
> >>
> >> Spot on, thanks Austin
> >>
> >>
> >
> >But the dealer sells it for what he thinks the market will stand.
>
> indeed. However, the final selling price in the analogy would not be
> related to the manufacture price, it'd reflect a nice fat mark-up on the
> price the dealer decided he was prepared to pay for it - or rather, the
> dealer would decided that the market could stand price X and would offer the
> manufacturer X/2

The days of nice fat margins are long gone in almost all markets, not
least since dealers are competeling against other dealers. The dealer
will, in most cases, source as cheaply as possible - he has to to
stay in business himself.

Richard
--
www.beamends-lrspares.co.uk [email protected]
Running a business in a Microsoft free environment - it can be done
Powered by Risc-OS - you won't get a virus from us!!
Boycott the Yorkshire Dales - No Play, No Pay

In message <[email protected]>
Austin Shackles <[email protected]> wrote:

> On or around Thu, 13 Oct 2005 13:02:23 +0000 (UTC), beamendsltd
> <[email protected]> enlightened us thusly:
>
> >
> >I'd disagree - you build a car, it costs so much to make, and you price it
> >based on cost of production and the market sector you are aiming at.
> >You then *hope* it will sell - if it doesn't sell or you have to drop the
> >price to sell it you go bust. That's exactly the same as milk, beef,
> >wheat etc.
>
> Not exactly. to be a parallel with farming, you build a car and then the
> dealer tells you how much he's prepared to pay for it, and if that's less
> than it cost to make it, tough. AIUI.
>

That's exactly what was being said about the milk, it's produced at
such-and-such a cost, then the buyers are saying "we will only pay
x pence a litre" - I can't see any difference at all. Uou produce
something, hoping to get a price for it - you don't get what you
want/need, you make a loss and go bust. That's what I originaly said.

Richard
--
www.beamends-lrspares.co.uk [email protected]
Running a business in a Microsoft free environment - it can be done
Powered by Risc-OS - you won't get a virus from us!!
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In message <[email protected]>
"Graham G" <[email protected]> wrote:

>
> "Steve" <[email protected]> wrote in message
> news:[email protected]...
> > Graham G wrote:
> >
> >>> Not exactly. to be a parallel with farming, you build a car and then
> >>> the
> >>> dealer tells you how much he's prepared to pay for it, and if that's
> >>> less
> >>> than it cost to make it, tough. AIUI.
> >>
> >> Spot on, thanks Austin
> >
> > But the dealer sells it for what he thinks the market will stand.
> >
> > Steve
>
> The manufacturer makes it adds a bit and sells it to the dealer. The dealer
> adds his margin and sells it to the customer. It is what the market will
> stand, but is at the same time a factor of what it cost to make, as it is
> with all the other cars in that market.
>
> if this were farming...
>
> the farmer produces a "car" of the type which he thinks will sell. He then
> approaches the dealer who calculates what his margin will be and what the
> market will stand, then gives the farmer this price. This price however
> maybe less than the cost of producing the "car", but because all markets
> open to the farmer operate in the same way he is left without a choice. The
> amount the market will stand is unrealistically low due to this historic way
> of trading. It is the reason prices keep falling in shops rather than rising
> (reletively speaking).

That's exactly the same as any other business/product - everyone wants it
cheaper, everyone cuts costs and margins to compete, eventually
producers go bust.

>
> What needs to happen is all farmers get together and say this is what it
> costs to produce, this is our profit margin, this is the price we will sell
> it. Dealer then passes the cost on, as does shop, consumer pays a bit more
> for quality home grown produce, but at the same time insures its supply and
> guarentees its quality. It would be nice but it will never happen.

No, it never will in the modern world - the product, whatever it is, will
be sourced cheaper overseas. Someone *always* produces it cheaper, and
with modern tranportation distance is rarely a problem when prices have
fallen sufficiently.
"Quality home grown produce"? What does that mean - if it *really* means
"Home grown produce - please supports us" (which it does) then that's
wonderful - but one cannot make that plea unless one is prepared to
answer the same plea from their neighbour. Like the bloke at Leek Show
a couple years ago with his hog roast trailer - banners everywhere
"Support British Farming", including on his Nissan - that just gets me
very angry - because it's so bloody hypocritical.

>
> The price of oil is a good example of what is going on. All agricultural
> inputs have gone up as a result of the increase in oil price, as has been
> the case in most industries. However, the money the farmer receives is
> exactly the same as it was last year so he is worse off. In other industries
> the increase has simply been passed on, and generally speaking the net
> result is neutral (I admit not in all cases).
>

In very few cases. In any market where there is competition each business
has to make the descision wheter or not to pass cost increases on, in full
or part, and whether that cost will be paid by the end consumer.
Any business that just assumes it can pass increased cost on to it's
customers is in *big* trouble (see Britsh Gas - 500,000 customers lost).

I have to pay a 3.4% fuel surcharge on my couriers deliveries these days.
Can I pass this on? No. No-one else is, so I can't. It's a bummer, but
that's life.

> Graham

Richard
>
>

--
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In message <[email protected]>
"Graham G" <[email protected]> wrote:

> Path: news.btconnect.com!NewsHound!fakexover
> From: "Graham G" <[email protected]>
> Newsgroups: alt.fan.landrover
> Subject: Re: NOTE October Unofficial CHANGE OF VENUE
> Date: Thu, 13 Oct 2005 20:55:28 +0100
> Message-ID: <[email protected]>
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You'll have to precis that - to big for the server.

Richard
--
www.beamends-lrspares.co.uk [email protected]
Running a business in a Microsoft free environment - it can be done
Powered by Risc-OS - you won't get a virus from us!!
Boycott the Yorkshire Dales - No Play, No Pay

>> the farmer produces a "car" of the type which he thinks will sell. He
>> then
>> approaches the dealer who calculates what his margin will be and what the
>> market will stand, then gives the farmer this price. This price however
>> maybe less than the cost of producing the "car", but because all markets
>> open to the farmer operate in the same way he is left without a choice.
>> The
>> amount the market will stand is unrealistically low due to this historic
>> way
>> of trading. It is the reason prices keep falling in shops rather than
>> rising
>> (reletively speaking).
>
> That's exactly the same as any other business/product - everyone wants it
> cheaper, everyone cuts costs and margins to compete, eventually
> producers go bust.

Ok, so now you are telling me all farms are on a course to go bust. Along
with all primary industry, I should think you are worried, particularly as
so many of your suppliers are farmers, craddocks, brittpart etc... to turn
it round then, seeing as you appear to be the expert, what do you suggest
British farmers should do?

>> What needs to happen is all farmers get together and say this is what it
>> costs to produce, this is our profit margin, this is the price we will
>> sell
>> it. Dealer then passes the cost on, as does shop, consumer pays a bit
>> more
>> for quality home grown produce, but at the same time insures its supply
>> and
>> guarentees its quality. It would be nice but it will never happen.
>
> No, it never will in the modern world - the product, whatever it is, will
> be sourced cheaper overseas. Someone *always* produces it cheaper, and
> with modern tranportation distance is rarely a problem when prices have
> fallen sufficiently.

And we all know what happens when a country relies too heavily on imports...

> "Quality home grown produce"? What does that mean - if it *really* means
> "Home grown produce - please supports us" (which it does) then that's
> wonderful - but one cannot make that plea unless one is prepared to
> answer the same plea from their neighbour. Like the bloke at Leek Show
> a couple years ago with his hog roast trailer - banners everywhere
> "Support British Farming", including on his Nissan - that just gets me
> very angry - because it's so bloody hypocritical.

I don't see why, as I said before, what do you expect him to buy?? An
American defender I suppose? Given there are only sports cars that are
truely british owned what do you suggest? If you say, yes but landrovers are
built in the UK, then he is equally within his rights to buy a Nissan given
Nissan employs so many British people in its British factory? And where do
you suppose your supply of parts come from, certainly few are British so you
are just as hipocritical. Perhaps if the shoe was on the other foot and it
was your home, family and livlihood that was on the line you might not be
quite so self righteous.

> In very few cases. In any market where there is competition each business
> has to make the descision wheter or not to pass cost increases on, in full
> or part, and whether that cost will be paid by the end consumer.
> Any business that just assumes it can pass increased cost on to it's
> customers is in *big* trouble (see Britsh Gas - 500,000 customers lost).

so how do you account for inflation then. Farm produce prices are at the
lowest point in twenty years, yet inputs have followed the market and in
many cases out perfomed it.

> I have to pay a 3.4% fuel surcharge on my couriers deliveries these days.
> Can I pass this on? No. No-one else is, so I can't. It's a bummer, but
> that's life.

You have just buggered you own argument, the courier tells you how much it
costs to deliver your parcels, you being the "supermarket" absorb that cost
bscause it is a cost of production. A farmer cannot tell cows to produce
milk cheaper, he is like the courier, his cost go up. The differenc is, he
cannot pass the cost on as your courier does.

> The days of nice fat margins are long gone in almost all markets, not
> least since dealers are competeling against other dealers. The dealer
> will, in most cases, source as cheaply as possible - he has to to
> stay in business himself.

Cos dealers have never had to compete!!! The dealer in most cases, esp if
franchised, has no choice where he sources from, and believe you me I know
for a fact that margins have not fallen, in fact quite the opposite in the
motor trade.

>> Not exactly. to be a parallel with farming, you build a car and then the
>> dealer tells you how much he's prepared to pay for it, and if that's less
>> than it cost to make it, tough. AIUI.
>>
>
> That's exactly what was being said about the milk, it's produced at
> such-and-such a cost, then the buyers are saying "we will only pay
> x pence a litre" - I can't see any difference at all. Uou produce
> something, hoping to get a price for it - you don't get what you
> want/need, you make a loss and go bust. That's what I originaly said.

No, you applied that to all manufacturers when it is rarely true outside the
farming industry. Industry works from the other end. It calculates what the
market will stand, then builds a product based on that, thus ensuring a
profit when it hits the shelves. Generally speaking the cost of manufactured
products have gone up year on year, at least with inflation. Agricultural
products have gone down in price year on year. In 1991 wheat was worth
£120/tonne, currently it is sold at £60/tonne However in 1991 the cost of
production of that tonne was cerca £35. Currently that runs at around £56.
If both inputs and income had increased with inflation as it does in other
industry, even given the increase in fuel, then farming would still be
profitable.

You keep comparing farmers to manufacturing, which is wrong, farming is more
akin to mining, forestry and other such basic producers of raw material. Yes
you can argue that it can all be produced elsewhere cheaper, so lets assume
that occurs. Farmers are non existant in this country as with most of Europe
now because Russia is at full production and is feedin the world. Lets leave
aside the mass unemployment and reduced tourism as a result, and concentrate
on food. We are a full importer of food as is most other countries.
Gradually the key produces become acostomed to a better way of life as
happens with developing countries. They start to charge more for their
produce, and they can because there are no further producers. The result is
that they can chareg pretty much as what they like and you have no choice
but to pay it. This may be an extreme end, but those who have studied it
believe that this will be the case in approx 60 years time. It will mirror
OPEC in the way food is controlled.

Now tell me that is healthy business. But what you tell me is that it is
they way all things will go. Thats something to look forward to then...