Mark up on older used equipment?

I was looking at potentially buying an older Champion grader and was wondering what is a reasonable mark up for used equipment dealers? One dealer has 2 graders that were purchased at auction and I searched and found out what they sold for. One was purchased last June for $7750 and the other was purchased last Sep. for $11500. I have no problem paying more to not have to go through the auction process but the dealer is asking $17,900 and $18,300 for these machines a year later. I think I have a bit of an advantage (negotiating) knowing what they sold for but I'm not paying over double or close to double. I'm thinking maybe 30-35% markup not over 100%. Delivery, service, etc. could maybe be part of a deal. What would be a good starting offer? Should I mention I know there's some similar machines coming up at auction and could go that route? I could play dumb too and ask about service records and other stuff and see what kind of story I get. Sometimes it's easy to see when a sales person is full of BS. I discovered this when looking at the dump truck I ended up buying at auction. They would have made more money on my offer than selling it at auction. I haven't talked to this place with the graders yet but just looking for negotiating advice. Maybe walking in with cash is the way to go if the machine(s) checks out OK. There is another outfit here that specializes in Champion graders that will do an inspection but I'm not sure what that costs? Might be worth seeing what an inspection costs or at least get the basics on what to check.

Seems auction results has changed the iron business for all of us. We can use it to our advantage,or it can bite you on that deal you think your going to make a buck on. Dealers buy the stuff based on thier knowledge and experience then put it out there on what the market will bear. At this point it dosent matter what he paid for it , at least you have more time to look it over and maybe get some backup after purchase if needed.
Id look the dealers machine over and make your offer,but be prepared to move on. Theres always another auction around the corner.

Whos to say the dealer didn't do a bunch of repair to the machine. Even just a little fixing on it will cost money. Or do you know for a fact they did not. Also they have cost of trucking it involved.

I realize the dealer had to bring it to their shop. The 1 machine had a leak noted on a cylinder so maybe the dealer repaired it. Asking over double still seems too greedy. The dealer might sit on the machine for a long time too.

Welder Dave said:

Should I mention I know there's some similar machines coming up at auction and could go that route?

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OH GOD NOOOOOOOOO

I might be bidding against them. LoL I have another machine on a farm the guy wants $7200. Of course it looks a little rougher and the tires aren't as good but you can do a fair amount of fixing up for $10,000.

The first machine is a 33% mark up on asking. The second is 37% on asking.

Anything under $20,000 US is less than base runner price. It may run when you look at it but chances are it may not once you sign the paper.

No dealer that I know of would do so much as tighten a loose bolt on that level of iron.

I wouldn't think a dealer would do much unless it was something simple. It's a bit of a gamble for the dealer too, sell it and make a quick 4 or $5000 or hold on and hope to make $8000+. I doubt a contractor would buy a 30 to 35 year old machine for regular use. I could always make an offer and if it's too low they can call me if they change their mind.

I cant count how many time i have known about were a deal bought something cheap priced it high held on to it then sold it at action. I think after a while they think it is better to wright it off.

I've seen that a lot too. That's why I'm wondering if the dealer wants to make a quick profit or hold on hoping to make a huge profit.

for what it's worth, I'm at a dealer and this summer has been mostly restorations of older machines for customers. Everyone is dragging the old iron back into use. It's been a fun history lesson. Lot's of, ..."Oh yeah, I remember these!"

The backhoe I'm fixing has rods running from the control levers to the hydraulic valve. It's like looking at cave paintings. I can't imagine what type of ancient human ran equipment before the invention of electro/hydraulic pilot controls.

Muffler Bearing said:

I can't imagine what type of ancient human ran equipment before the invention of electro/hydraulic pilot controls

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This forum has a few of them

I watch auctions too and sometimes see equipment from an auction be listed for sale by a dealer later. I like to sometimes send them an offer of the same price they paid. I never get a response. Lol

I don't know of any dealer interested in auctions anymore unless something turns up as a steal. The subject machine would need to be less than two years old and have less than 2,000 hours before a dealer would consider a bid. What really happens is that a dealer will bid in order to protect the pricing of units they currently have in stock. They will run up the process on purpose.

Most items at auctions seem to create some sort of hysteria when the bidding begins. I was part of pricing used machines in the past and my favorite saying about auctions was that "nowhere else can you watch the creation of such mass stupidity."

Sometimes you can get a good deal if other people have no idea what they're bidding on. I bought a Miller Trailblazer 55 diesel welder that was used for automatic pipeline welding. It was a 400 amp multi-process machine. There were 7 of them. One of the other bidders who took one had no idea why it had a whole bunch of extra controls. They sold for $2750 and a new one was $14,000. On the small items like chains and hand tools, they sell for more than new. Another item that sells for too much is golf carts. The company my dad used to work for sells lots of used golf carts through RB. They sell for more than you could buy them for direct from the company and often with a 3 or 6 month warranty. Kind of a no brainer taking them to auction.

I found another grader to look at. Seller was going to fix a broken axle but doesn't have the time. It's a 1987 with a rebuilt Cummins engine and he said he'd sell it to me for about 10K delivered with all the parts to fix it. It's about 2 hours away and he knows someone who could haul it. He said he'd split the trucking with me so 3 or $400 to get it delivered to my property seems pretty reasonable. Just have to see when I can get out to look at it. I'm in the beginning stages of getting a stem cell transplant and they put a central line in by my right front collar bone yesterday. It hurt pretty good last night and this morning but is feeling a little better now. I'm not supposed to drive for a while.

Doesn't matter what a seller paid for an item as the value is what the market via the buyer is willing to pay. Savvy sellers buy low and sell high it's the reason they are sellers. If what they are offering for sale is at a price you are willing to pay then it's a deal.

Auctions are a different story that prey on buyers emotions, ignorance and machismo. As with any used from a dealer or auction house - Buyer Beware.

Welder Dave said:

good deal if other people have no idea what they're bidding on. I bought a Miller Trailblazer 55 diesel welder that was used for automatic pipeline welding. It was a 400 amp multi-process machine. There were 7 of them. One of the other bidders who took one had no idea why it had a whole bunch of extra controls. They sold for $2750 and a new one was $14,000.

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I don't think the dealers are out of line with their asking prices, or markup. Just because they got a "deal" when they bought them, doesn't change the "retail" value of the equipment. If you turned around your welder that you bought for 2750, and someone walked up 6 months later and offered you $3,500 for it, you probably wouldn't take it, you might just laugh at them. "Its worth $10,000- and new ones are $14,000" is what I'd imagine you would say.

The dealers are no different than you are. Just because they bought them cheap, doesn't reduce the value of the graders. They took the risk at auction that they might need lots of work.

I've actually looked at a couple local to me graders. Not because I need a grader, but because I think I can actually buy a used grader for less than I can buy a used skid/track loader. I need something to grade out my yard and driveway a couple times a year, and usually just rent a skid loader. I don't really think I'm going to buy a grader, but one sold near me this spring for under $6,000, and everything I look at for skid loaders is $15-20,000, which made me look a little at used graders.

I think a used grader would be great for your track dave. It would really help bank your corners and I think would be great for maintence. Keep looking and the right one will show up.

skata said:

I watch auctions too and sometimes see equipment from an auction be listed for sale by a dealer later. I like to sometimes send them an offer of the same price they paid. I never get a response. Lol

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We once bought a 953c online sale cheap the next week there was a 953b they got 89000 for it and about 2 weeks after that it was painted and listed for 99000 or so

I think soon prices on old used equipment will tank, especially as new emissions regulations arrive. Unless the old machines were well cared for and all systems totally gone through, leaky seals and case seams /gaskets and goo, metal fatigue etc. will soon show their ugliness. Purchasing an old 60's or 70's machine is more of a project than a money making device, especially if it has been beat, bent and welded to the max.