[retiredguy123]

Originally Posted by CoachKandSportsguy

Professor, I built and modeled out various pricing models for the building construction industry on a quotes to build and quotes for service multi year contracts for multiproduct building systems, locally, nationally and for the federal government RFPs more than once. . . . one was an international datacom network bid to the IRS in the early 90's with both piece parts pricing and service based pricing. The construction quotes were mostly fixed price quotes, with parts and labor costs not visible. Federal government prices were designed to the RFP, though having to figure out max profit with different pricing inputs than our black box was the challenge. I have an idea of customized pricing since the models were all custom systems. I was not advocating commodity pricing, @retiredguy does not like the dispersion of pricing differences for the same car at different dealerships. I was challenging him on his desire to have a commodity or standardized pricing model. I may have used the term commodity pricing to mean that there is no differentiation between dealerships for the same car, which is what @retiredguy constantly thinks should happen, and is not the first time he has complained about that point. He constantly compares a consumer near commodity (better? since they are not identical but can be substituted for one another with minor differences) at best buy new with a highly configurable automobile with an age and wear factor.

So in normal times, conceptually, margins are competitive everywhere as the volume fluctuates around a competitive return for sellers. I think that having a large margin as clearly advertised with dwindling available units to sell to have to cover the commissions (variable) and fixed (lease, salaries, utilities) would result in a required higher margin to stay in business, are you disagreeing with this statement?

Thus, I don't think that pricing to survive is necessarily ripping off everyone, since no one has to buy that particular vehicle as clearly advertised.

finance guy

To clarify, I have no problem with different prices at different dealerships. That is fair competition. My issue is that an uniformed or novice buyer will pay X dollars for a car. But, I, or another well informed and non-intimidated buyer can go into the same dealership and buy the same car for as much as $4,000 less. I have a problem with that.