Market Conditions Commentary
 
We just witnessed the official Market Switch
by Robert Hollenshead
Sep 7 2013 6:07AM

It is no surprise when it hits but that doesn’t make it feel any better.  It was a Holiday last week so as usual we all attribute last week’s anemic sale to Labor Day weekend (not me).   I sold straight through the idea that it was the Holiday that made buyers less active .  As we saw this week it had zero to do with the Holiday.  We just went through the market switch.  If a car was a 2010 you have to count it as a 2009.  If it was a 2012, it is now a 2011.  Just price it a year older and you are fine.  But if continue to look at MMR and your brain is fuzzed out with rationalizing why the market is the way it is, expect to dig into your piggy bank.  If you were looking for MMR results yesterday you were the King of no-sales.  Personally, I sold everything, ten million in gross sales,  like diarrhea, nobody likes it, but it makes room for the new day that’s coming.  If you stay constipated you can’t eat, right?  My lifelong theory is to take the doe and let ‘em go.  Learn from what just happened and  tromp on the gas. 

I was surrounded by a lot of disgruntled faces (except for dealers with enough brains to stay in our lanes and take advantage of the fact that I am selling to the walls regardless of the outcome, which we had an abundance of in lane and on line, and thank you).  “That was too cheap”.  Really?  Wait until next week, you think they’ll be more?  A totally retarded thought.  It’s called the market switch.  Now go buy on the new market and I’ll show you some happy faces.  Just like terrible tasting medicine, to get better you got to swallow regardless. 

The market change eliminates the tulips.  The guys that hit the street to “do a little wholesaling”.  It’s been my experience over the past 43 years that “the tulips” are now in full-fledged panic looking for a rooftop to cover their ass for the winter.  Tulips are the wide eyed knuckleheads that come out in the Spring when it looks too easy to Wholesale.  The market change ids the first volley that makes them understand it’s over and the first frost on the pumpkin is the death blow.  That’s when the stories of grandeur and hard luck sagas break out.  “Their backer pulled out the money (no he didn’t, you blew t).  “My partner screwed me” (no he didn’t, you were golfing or fishing and got buried in slugs that nobody would buy if they were free, you couldn’t give them away especially at the auction in the middle of the market switch, again,  if they were free.  He also had to head for the hills but while you were on the 14th tee he cleared the check book out of the money he put up).  It is the perennial litany of reoccurring stories that are always the same, just the players change, sad, but comical.  It has been the same for decades and this year is proving to be no different.

Stop for a second and think.  If  MMR looks back a month or two (and in some cases 3 years) depending on volume and you use it to guide what you do, in a descending market, how would you ever buy a car that is worth the money.  By design you are paying too much regardless of circumstances.  Stop dreaming and start thinking is my theory.    The market is looking the opposite way.    

We already have 600 units for next week.  Not having the Thursday sale this week really screwed me up.  We were geared up to have 1,000 units but Manheim pulled the rug out from under us.  I was really starting to like that Thursday afternoon thing.  It would have been (and will be) good.  I am working on the solution. 

Have a good selling day and we’ll see you at the High Line.

Sell Well

Robert Hollenshead


3 Readers' Comments

1
John Wolfe
Fort worth
TX 76107
11 years ago
It was sluggish down here last week as well, and I sold them short. However, I think it'll be biz as usual Tues, and will wish I had last weeks cars still owned come sale time in the AM. I agree with 100% of above in your blog, but I don't think the switch has hit TX yet. We'll see shortly.

2
Robert Hollenshead
MANHEIM
PA 17545
11 years ago
Thanks John and Good luck this week. Put a few hundred $40,000 units on the block and I think you'll wish you sold them last week...if you can find a bid, for what they could have been sold for a week or two prior. . I had cars in Huston, Dallas and San Antonio and unless they had giant tits, the market switch was in full force. 90,000 miles pick ups are very sellable, I agree, but I am speaking about the market in general as we touch everything for $100 to $150,000 in volume. In fact I have a few units that I sold in Dallas 20 days ago that came back for no title, ran last week, no bid $2,000 under. If you would like to handle them I would love to pay you $500 a unit to get the original money. Call me and we can arrange to get you the gate passes. 610 960 6346.

3
John Wolfe
Fort worth
TX 76107
11 years ago
Your right, this sucks :( full blown defense mode.