Landed cost is the most important number in auction buying. It determines your true all-in cost and therefore your actual profit margin. A common mistake is calculating profit based only on the purchase price without accounting for fees and transport.
Landed Cost
The total cost of acquiring a vehicle including purchase price, auction fees, transport, inspection, title fees, and any reconditioning needed.
Definition
The total cost of acquiring a vehicle including purchase price, auction fees, transport, inspection, title fees, and any reconditioning needed.
Related Terms
Buyer Fee
A fee charged by the auction house to the buyer, typically calculated as a percentage of the purchase price or on a tiered scale.
Max Bid
The maximum amount a buyer should bid on an auction vehicle to maintain their target profit margin after all landed costs are accounted for.
Profit Margin
The percentage of the retail selling price that represents profit after subtracting all costs. Calculated as (Retail Price - Landed Cost) / Retail Price.
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