This sound like a good partnership arrangement?

[SMEGMA STENCH]

This is not something I'm considering, its something I've already done a long time ago and have since quit doing it. Got out of the used car business a long time ago.

So there's two guys that want to go into the used auto sales business. One has good mechanic skills, and the other is a good salesman and buyer. But obviously, the mechanic guy is going to be doing all the actual labor on any of the cars that need some work done. The salesman/buyer type knows enough about cars to know what to watch out for when he's buying one, but he's no mechanic and he doesn't have the fixit skills necessary to turn all the wrenches.

So if these guys want to go into business together, right off the bat you're going to have one guy who is doing all the labor and one guy that just goes around and acquires the inventory and handles the sales. So to offset this imbalance, the guys agree that its the sales guy that will front all the money for buying the cars, and any parts they may need. But the mechanic guy has to do all the labor of actually getting the cars up to par if there is anything wrong with them. He even washes the cars and vacuums them out. Then once the car is sold, the salesman gets back all the money he had to put into the car, including the initial price of buying the vehicle. But they split the profits down the middle. Sound like a good arrangement? Or no? If no, why not? Which one is getting the shorter end of the deal? The sales guy has to take all the financial risk, but the mechanic has to take the risk with his labor. These cars could be any age. Anything from a couple years old, to 10-15 years old. Anything the sales guy thinks they can make enough money on to make it a worthwhile purchase. He is the buyer (and he is fronting the money) so he decides what gets bought. So sometimes the mechanic won't have to do anything at all on a recent acquisition. Other times, he might be replacing the engine with a junkyard motor. Who knows. But either way, he'll likely always have something to be doing, even if it is just spraying on some tire shine.

[Cooter]

if the buyer knows nothing about mechanicals, it's a recipe for disaster IMO

[SMEGMA STENCH]

Well maybe I worded the sales guy wrong. There are a lot of people out there that know what to stay away from. For example, you got people that might not know how to fix a rod knocking, but they recognize the sound. Or a rattling lifter. Or they might not know exactly what the car needs for the fix at the time, but they can feel that the AC isn't blowing cold air. Or he doesn't know if its a fuse or if the motor is blown, but he can tell by pushing the button that the power window isn't working. You get the idea. A guy that knows about cars and what to check for, but isn't really a mechanic and isn't real interested in turning wrenches. This guy has probably never changed a head gasket, but he can recognize the symptoms of a blown one.

[Cooter]

it's just easy for a guy who isn't having to spin the wrenches to burn 50hrs of labor for a $1000 profit because hey, it's a "free" $500 for him.

but it can certainly work if he's an honest guy

[SMEGMA STENCH]

Yeah I see what you're saying. But when I was doing it, I would have never done that lol. That's just cruel and not even worth the money for both parties. Cause time is money for both parties. Naw I was thinking of hell... anywhere from 1 hour of labor (on some of the newer stuff) to maybe 8-15 hours for something like a 95 model that turned out to have more needs than originally anticipated. Not all needs will be fixed. Just needs that would affect the sale of the vehicle for a reasonable profit. Cause of course part of the sales/buyer guy's job is to get the most possible profit by buying only cars with minimal needs, or if the car has a lot of needs, getting it for a drastically lowered price so that the profit will justify the expenditure of time.

[Kenny_Stang]

There's a British show called Wheeler Dealers (look it up on YouTube) about a couple of guys who have the same arrangement. One guy finds the cars, buys them, etc. the other guy fixes them up. It's a pretty cool show, but I always thought the mechanic was getting the bad end of the deal.

[Ratt]

There's a British show called Wheeler Dealers (look it up on YouTube) about a couple of guys who have the same arrangement. One guy finds the cars, buys them, etc. the other guy fixes them up. It's a pretty cool show, but I always thought the mechanic was getting the bad end of the deal.

After I read the first post this is exactly what I thought of.

[Big A]

After I read the first post this is exactly what I thought of.

Same here. Ed does seem to be getting the short end of the stick, but I'd imagine the show's salary helps to ofset that a bit.

What happens when the buyer unknowingly picks up a lemon, and they end up upside down or breaking even? For the business model to work it seems to me like they need to both split the invesment cost, agree on a salary for both, and a commission plan as incentive to find the right cars and do good mechanical work. Then set aside a percentage of the profit for overhead.

So does the buyer front all the cars, and the mechanic front all the parts?

[SMEGMA STENCH]

I was thinking that the buyer/salesman fronts the cost of the car, and the cost of the parts. The only thing the mechanic fronts is his labor. That way, to offset his labor, the buyer is taking the same financial risk as the mechanic. Time is money, and that's what the mechanic puts in with his labor. Money is money, and that's what they buyer puts in with his...money. So they're pretty close to even I would think, but it could go either way. If the buyer buys a few cars in a row that are newer, then the mechanic is getting a way better deal. But if he buys a few 94 models in a row, then (maybe) the mechanic is getting the shorter end. I think too many of you are thinking only of the hard work that the mechanic will have to do. Beyond that he does nothing at all. The buyer has to find cars to buy, front his money and buy them, and sell them. Then handle the red tape at the tax office. Its time consuming. The buyer is fronting pretty much all the initial financial risk.

Heh. And watching Wheeler Dealers is what got me thinking about my old arrangement back when I was doing the exact same thing they do on that show. It was really quite fun. Gets a little old driving to all the auctions though, especially when everyone thinks they should get retail for stuff they're running through an auction. The auctions are pretty far apart and they all like to start early in the morning for some reason.

[STANGGT40]

so, does the mechanic get paid a salary or for his time repairing the vehicles, like the buyer gets his investment back? if not, then the mechanic is getting the raw end of the deal. for it to be fair, the mechanic should be paid for his time to repair, the buyer should be paid back his investment, then the amount left over should be split. if i'm the buyer, i would probably try to leverage my time to find the vehicle, deal with the sales, paperwork, etc as a fair trade-off for the mechanic's work...but if i'm the mechanic, i can't imagine that i would have the same view.

[Trick Pony]

There's a British show called Wheeler Dealers (look it up on YouTube) about a couple of guys who have the same arrangement. One guy finds the cars, buys them, etc. the other guy fixes them up. It's a pretty cool show, but I always thought the mechanic was getting the bad end of the deal.

Seems like they usually don't get a whole lot of profit when they sell so I would agree that the mechanic is coming out second best.

[SMEGMA STENCH]

Seems like they usually don't get a whole lot of profit when they sell so I would agree that the mechanic is coming out second best.

You have to nearly double what they say the made in profit, due to the conversion of pounds to dollars. They usually do alright.

What if you keep the labor mild? Like just replacing an alternator, or charging an AC system? If nearly all the labor was relatively mild, perhaps the arrangement would be more fair?

[Kenny_Stang]

Why doesn't the salesman/buyer just hire a good mechanic, and pay him standard labor rates. Just dont think there is a need to make it more complicated than it needs to be.

[JC316]

This is not something I'm considering, its something I've already done a long time ago and have since quit doing it. Got out of the used car business a long time ago.

So there's two guys that want to go into the used auto sales business. One has good mechanic skills, and the other is a good salesman and buyer. But obviously, the mechanic guy is going to be doing all the actual labor on any of the cars that need some work done. The salesman/buyer type knows enough about cars to know what to watch out for when he's buying one, but he's no mechanic and he doesn't have the fixit skills necessary to turn all the wrenches.

So if these guys want to go into business together, right off the bat you're going to have one guy who is doing all the labor and one guy that just goes around and acquires the inventory and handles the sales. So to offset this imbalance, the guys agree that its the sales guy that will front all the money for buying the cars, and any parts they may need. But the mechanic guy has to do all the labor of actually getting the cars up to par if there is anything wrong with them. He even washes the cars and vacuums them out. Then once the car is sold, the salesman gets back all the money he had to put into the car, including the initial price of buying the vehicle. But they split the profits down the middle. Sound like a good arrangement? Or no? If no, why not? Which one is getting the shorter end of the deal? The sales guy has to take all the financial risk, but the mechanic has to take the risk with his labor. These cars could be any age. Anything from a couple years old, to 10-15 years old. Anything the sales guy thinks they can make enough money on to make it a worthwhile purchase. He is the buyer (and he is fronting the money) so he decides what gets bought. So sometimes the mechanic won't have to do anything at all on a recent acquisition. Other times, he might be replacing the engine with a junkyard motor. Who knows. But either way, he'll likely always have something to be doing, even if it is just spraying on some tire shine.

it's just easy for a guy who isn't having to spin the wrenches to burn 50hrs of labor for a $1000 profit because hey, it's a "free" $500 for him.

but it can certainly work if he's an honest guy

I was in this EXACT arrangement and it happened exactly like Cooter said. My business partner went apeshit buying anything he damn well wanted and put the workload on me. Then he complained about how slow my production was when something didn't go exactly right. I had finally had it and quit, gave him my portion of the business and I walked. I do the labor now, but I get paid.