One must have one or all of the following qualifications .
Very Dumb with absolutely no negotiation skills
Very poor credit with no means of securing credit elsewhere
Why else would someone pay thousands more ?
I actually enjoy negotiating on cars - it appeals to my macho-competitive nature. I dont' negotiate for dress shirts, though, and will pay extra for good service and tailoring.) Many US consumers are totally uncomfortable with nogotiating, especially against a skilled professional. That is KMX's business model and we stockholders are prospering catering to these consumers. There is not right/wrong on negotiating vs. set price...jsut different consumer preferences.
hey windsblow; I find it ironic that your last 4 posts claim you prefer not to negotiate , yet I found this post of yours where you negotiated with your insurance over a measly $ 600 ??????
Sounds like price is a value to you . You wouldn't lie to us , would you ?
Sorry...that was a typo. It was a 1999 Honda, not a 1990. 10 years old, not 20. Insurance Company's first offer was $8800 and I settled at $9400. It was much more than I had anticipated,almost 1/2 of what I paid new for the car...I didn't complain. That is what highly desireable used cars fetch these days. settlement .
I'll sometime buy apparal from a full service department store even though I know that a discount house, like Kohl's, sells it for less. I do this not because I'm a wimp, but because not all of the retail value is based on price - I may prefer the retail experience or other non-tangibles with the higher priced purchase. Traditioanl auto dealers have for years been training customers that price is the only thing of value (We'll beat anyone's offer!!!) and consumers responded...and took most of the margin out of the auto sales business.
Consumers who prefer simple purchases are not wimps. They are simply making a choice based on their personal value equation. Basic marketing...and KMX has been able to meet these consumer needs form many years now and us stockholders have profitted from this. In the past there were few options for how a consumer could buy a used car: negotiate against a pro or negotiate with an ametuer (want ads). KMX gave consumers a new choice.
Regarding equal information: In a true free market auction, all parties have equal access to information. The stock market is the best example, where we know exactly what others have paid and what the last sales price was. I don't know of any car dealers who will tell a perspective customer what the last 20 people paid for a particular car...they keep that relevant market data to themselves. Many of us are perfectly comfortable with negotiating, even in that environment, but many people are not.
DENIAL has always been a WIMPS answer to anyone who does not agree with them . Do yourself a favor and block my posts , but at the same time be sure to BLOCK the thousands of non KMX shareholders who agree that KMX cars cost more than the competition . Your example of your imagination was a PRIME example of suffering from a SELF SERVING bias. God Bless !
I'm getting off topic, so I won't waste anymore of anyone's time after this post.
After reading your initial post, the responses of others, and your counter-responses, I've concluded that either a) you have very poor reading comprehension skills and don't really understand the other person's point or b) you do understand their point but you discard any information that doesn't support your next argument.
This reminds me of those who put up those "SELL! SELL! SELL!" posts all the time. What's the point?
Somehow its easy to imagine that every morning you print screen copies of your posts (and your posts only) and turn them in to someone named "toyotasergeant."
I support the 1st Amendment Rights of everyone, including you, and I'm sure you will continue to exercise your right to post whatever is on your mind that day. I will exercise my right to choose not to read your posts any longer.
In your post you spoke about KMX's niche being able to cater to Wimps who fear negotiating . I never really thought about it that way. Kinda like Bars catering to alcoholics, and Drug dealers catering to addicts. The big three's niche has always been " Buy American " .
Even Toyota's niche was easily established . All we had to do was create rumors that Japanese cars are trouble free when in fact Toyota has a filled to capacity service dept behind every dealer. To answer your question since you appointed yourself a spokesperson for non negotiators you have better access to market information than the dealers or their salesmen have . The info is up to date and concise . Its called the World Wide Web ! If you refuse to use it to negotiate the best price for any purchase , SHAME ON YOU !
There is a good size portion of the american consumer that is quite willing to pay 10-15% more for a used car if they can buy one without having to go through the negotiating process. They are simply uncomfortable sitting across the table from a professional negotiator and/or can't stomach the idea that the price they pay is based on their personal negotiating skills. This is KMX'S market niche and this has proven to be a profitable niche to cater to. Customers that are price driven will go elsewhere.
Regarding your concept of different customers paying different prices: Isn't that the whole bases of a negotiated transaction? Isn't the dealer who gives you MSRP minus X and gives someone else MSRP+X "fleecing" (to use your words) someone? Actually, negotiations would be a fair process if all the parties had access to market information...but the sellers are not willing to divulge actual prices paid by other customers - they keep that knowlege to themselves.
First , let me say that isn't it wonderful that KMX stock is up again today . I'd also like to point out that this is a message board and when someone discusses a business process and their likes or dislikes about the methods why is it that they are instantly labeled " bashers " ?
Its quite apparent that KMX customers like yourself feel comfortable with one price and like another poster mentioned it sometimes makes sense at Wal Mart , Best Buy , but I disagree that it does at Carmax . For example , when Walmart sells Soda @ .89 for 72 hours that makes sense but for the next 96 hours they sell the same soda for $ 1.89 and that makes no sense for a savvy consumer . When Best buy sells a 32 inch flat screen for $ 299 one week that makes sense . However , when they sell the same set for $ 599 for the next three weeks , those who make the purchase are being fleeced .
Thats why I feel the way I do about Carmax .
Its easy for you to justify buying with no negotiation when you compare it to buying at Wal Mart , because its only a dollar .
However , its not a dollar loss at Carmax, its usually thousands and thats where your theory about enjoying one price amazes me .
Now, lets talk about average gross margin which is something you obviously didn't think of when you bought at Carmax . Sometimes shareholders will pay more to " Support " their investment , and I truely believe thats what you did . To answer your question ,the average front end gross margin on a new Toyota in my area is $ 1100 . What your missing is when you negotiate hard you contribute only to market share as opposed to contributing to gross margin . You do however become a part of future average service + parts gross margin . Those of you who are comfortable paying whatever we ask do contribute to average front gross. -In closing my blog I'd like to share something interesting about retail sales . Three out of ten customers pay sticker or more ( they buy aftermarket items+ protection ) because they believe it entitles them to better service, loaner cars, and royalty type treatment . Sound familar ?
Good luck with your stock investment .
As entertaining as your response was, I noticed that you still didn't answer my question: Where can I go and see for myself what average gross margin is on new Toyotas?
The word "amortization" shouldn't scare anyone who reviews the facts. The facts, on the other hand, you might be afraid of them. Or perhaps you're afraid to speculate on what would happen to Toyota sales if the public could actually see what true gross margins are. Hmmmmm.
I visit this website to see what other investors are saying about the stock. Every post I've ever read with your colorful moniker screams of unsupported speculation and bashing the purpose of which I can only imagine. Unless you have an investment, even a small one, with this company, please do your best to keep your posts constructive.