Strong Dollar Buying Power
This week the value of the British pound hit a 31-year low compared to the U.S. dollar resulting in deep discounts on British goods.
Today, one British pound is worth $1.27. Two years ago in this month, let alone 30 years ago, one British pound was worth $1.60 amounting to a discount of more than 20%!
How it works…
Meanwhile British goods have not changed in price much. A plate of fish and chips cost 7 Quid 2 years ago remains true today. 7 Pounds would have cost you $11.20 2 years ago. Now the same plate of food costs $8.89. The price hasn’t changed. The purchasing power of the dollar has.
What it Means For Dealers
Saving $2.00 on a plate of food isn’t necessarily going to pad your retirement plan, but when it comes to larger purchases, say a vintage Jaguar C-Type Sports Car, the difference is phenomenal. We are not sure how much one of these puppies costs. Suffolk Sports Cars actually has a kit you can build or they can build it complete and ship it to you. Let’s just say £19,900 for the kit. 2 years ago that would have cost you $31,840. Today that would only cost you $25,273. That’s $6,567 dollar difference. That’s just the difference 2 years ago, and the British pound is at a 31-low.
What About Shipping?
There are 2 ways to ship cars. In a container or not in a container. If you ship in a container you will indeed lose your you-know-what. It’s counter-intuitive, but not shipping in a container is a fraction of the cost. Typical costs to ship a single car in a container are around $6,600, but RORO shipping (“roll on, roll off”) shipping is only around $1,200. That’s still leaves a savings of $5,367!
Add a plane trip of a half a grand or so and that’s a pretty good day!
The Largest Obstacle
The largest obstacle is possibly our own comfort zone.
Everyone says they are looking for an advantage to exploit, but when it comes down to taking actual calculated risks, most people allow their emotions to override logic.
As a business owner, this either makes sense on paper or it does not. If it does, too often risk-mitigated competitive opportunities are not taken because of a fuzzy emotional aversion.
“It’s so far! How can that work? Importing is messy.”
Sometimes, maybe a lot of the time, outside of our comfort zone is where we truly compete.
The solution? The more due diligence, math, and phone calls you make; the more risk can be mitigated before you ever step foot outside your zip code.
British Dealers Want Your Business
When a new buyer walks into your shop they aren’t left on their own to do the paperwork. Likewise, dealers in the UK are used to helping overseas buyers and know how the system works. Many will have document import duties for the US meaning you do not need to pay import duties at all. Most will know how to help you with the paperwork and transportation. A quick phone call is all it takes to confirm.
Too often folks hide behind the internet looking for answers. An hour of googling, can’t replace 5 minutes on the phone with someone in the know. It could lead to more questions that need answering, but before long you could be an expert flying back and forth across the atlantic killing it with a new highly profitable inventory and income stream.
Most people are more than happy to share their knowledge and help someone who is eager and wants to learn. Even competitors. There is plenty to go around – especially if competitors are not geographically close to one another or are in different niches.
Pictures provided with permission by Suffolk Sports Cars in Woodbridge Suffolk.