Max bid is calculated by working backward from the expected retail value: Max Bid = Retail Value - Target Profit - Fees - Transport - Reconditioning. Setting your max bid before the auction is the most important discipline in wholesale buying.
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.
Definition
The maximum amount a buyer should bid on an auction vehicle to maintain their target profit margin after all landed costs are accounted for.
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.
Landed Cost
The total cost of acquiring a vehicle including purchase price, auction fees, transport, inspection, title fees, and any reconditioning needed.
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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