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Old 10-01-2013, 05:55 PM   #1
DentMagnet
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Default A method for pricing whatever

Let's say for a car.

The numbers below, 10 through 22, can be in dollars, yen, pesos, gold coins, etc.

If make a histogram with 10 car prices that you've gotten from wherever and it looks like

10-11,999|x
12-14,999|xx
15-16,999|xxx
17-19,999|xx
20-21,999|x
22-23,999|x
then if you charge 16,000 about half the people won't be interested.

If you get something like this
10-11,999|xxxx
12-14,999|
15-16,999|x
17-19,999|
20-21,999|
22-23,999|xxxxx

you've got a problem.
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Old 10-01-2013, 05:58 PM   #2
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Old 10-01-2013, 06:07 PM   #3
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Are you a statistician in the middle of a stroke?
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Old 10-01-2013, 06:12 PM   #4
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Quote:
Originally Posted by Unabomber View Post
Typical of most of his posts.....
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Old 10-02-2013, 09:48 AM   #5
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The Wat Woman has mysteriously disappeared, but how do you turn this



into her?

Quote:
Originally Posted by Gallo2011 View Post
Are you a statistician in the middle of a stroke?
How would I know that?
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Old 10-02-2013, 09:54 AM   #6
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Quote:
Originally Posted by DentMagnet View Post
Let's say for a car.

The numbers below, 10 through 22, can be in dollars, yen, pesos, gold coins, etc.

If make a histogram with 10 car prices that you've gotten from wherever and it looks like

10-11,999|x
12-14,999|xx
15-16,999|xxx
17-19,999|xx
20-21,999|x
22-23,999|x
then if you charge 16,000 about half the people won't be interested.

If you get something like this
10-11,999|xxxx
12-14,999|
15-16,999|x
17-19,999|
20-21,999|
22-23,999|xxxxx

you've got a problem.
Depends on the sample size. You need a large enough sample size for a reasonable histogram. Another problem is getting the actual selling price. Just because someone lists a car for $x,xxx doesn't mean that's what they sold it for. 3rd party values are notoriously hard to get a good read on, hence the problem people have asking "what is my car worth". Dealer prices are a lot easier since all of that is well documented.

So, we get what we had here last week, which is the way he wants, well, he gets it. And by that I mean, price it high, you can always go lower.
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Old 10-02-2013, 10:02 AM   #7
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Quote:
Originally Posted by Bacon117 View Post
Depends on the sample size. You need a large enough sample size for a reasonable histogram. Another problem is getting the actual selling price. Just because someone lists a car for $x,xxx doesn't mean that's what they sold it for. 3rd party values are notoriously hard to get a good read on, hence the problem people have asking "what is my car worth". Dealer prices are a lot easier since all of that is well documented.

So, we get what we had here last week, which is the way he wants, well, he gets it. And by that I mean, price it high, you can always go lower.

KBB and autotrader seem to have somewhat of handle on it.. I checked my selling price on mine and its on the higher end but in between moderate and high.. Well within reason
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Old 10-03-2013, 09:07 PM   #8
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Quote:
Originally Posted by DentMagnet View Post
Let's say for a car.

The numbers below, 10 through 22, can be in dollars, yen, pesos, gold coins, etc.

If make a histogram with 10 car prices that you've gotten from wherever and it looks like

10-11,999|x
12-14,999|xx
15-16,999|xxx
17-19,999|xx
20-21,999|x
22-23,999|x
then if you charge 16,000 about half the people won't be interested.

If you get something like this
10-11,999|xxxx
12-14,999|
15-16,999|x
17-19,999|
20-21,999|
22-23,999|xxxxx

you've got a problem.

d00000000000000d...yew joined the wrong forum.....
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Old 10-03-2013, 09:29 PM   #9
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All them numbers are wonderful things, but throw them out cause there's a sucker born every minute. Look how many people buy modded Subaru's without a clue.
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Old 10-03-2013, 09:33 PM   #10
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Supply and demand.
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Old 10-04-2013, 12:15 AM   #11
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Quote:
Originally Posted by nmlittlebigman View Post
All them numbers are wonderful things, but throw them out cause there's a sucker born every minute. Look how many people buy modded Subaru's without a clue.

yeah.....the OP is one of those idiot savants who just does NOT understand what's going on here....

search some of his other threads/posts for proof
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Old 10-04-2013, 09:22 AM   #12
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My wife teaches second grade. This is what math looks like today.

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Old 10-04-2013, 09:26 AM   #13
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When you want something that's better, do you look for something that's better or worse?

Knock knock. Who's there? Queen. Queen who? Queen up my dishes. You see, I said Queen to make it funny.
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Old 10-04-2013, 09:27 AM   #14
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Quote:
Originally Posted by Jack View Post
When you want something that's better, do you look for something that's better or worse? Knock knock. Who's there? Queen. Queen who? Queen up my dishes. You see, I said Queen to make it funny.
He doesn't get it
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Old 10-04-2013, 09:29 AM   #15
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Quote:
Originally Posted by codesoccer View Post
He doesn't get it
It's really pretty clear. All those histograms are pretty and all, but if you have a car or whatever for sale, all you need to do is sell it to one person. Therefore, the graphs are useless. I would sell it to the person who would pay the most money. I would not use the numbers in the nasioc private classifieds as a barometer of pricing. Most of the asking prices are pie in the sky. (jack has bought 4 cars this year and sold 4)
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Old 10-04-2013, 09:38 AM   #16
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Quote:
Originally Posted by Jack View Post
It's really pretty clear. All those histograms are pretty and all, but if you have a car or whatever for sale, all you need to do is sell it to one person. Therefore, the graphs are useless. I would sell it to the person who would pay the most money. I would not use the numbers in the nasioc private classifieds as a barometer of pricing. Most of the asking prices are pie in the sky. (jack has bought 4 cars this year and sold 4)
I agree with you. I paid 6k for a bugeye in 2007 and I still see them for more then that. My "he doesn't get it" was referring to the end of the AT&T commercial.
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Old 10-04-2013, 10:22 AM   #17
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Silly me. Instead of using DentMagnet histograms, I've been relying on Black-Scholes for pricing stock options and futures. I guess one of us is an idiot.
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Old 10-04-2013, 11:40 AM   #18
Ishbar
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Quote:
Originally Posted by DentMagnet View Post
Let's say for a car.

The numbers below, 10 through 22, can be in dollars, yen, pesos, gold coins, etc.

If make a histogram with 10 car prices that you've gotten from wherever and it looks like

10-11,999|x
12-14,999|xx
15-16,999|xxx
17-19,999|xx
20-21,999|x
22-23,999|x
then if you charge 16,000 about half the people won't be interested.

If you get something like this
10-11,999|xxxx
12-14,999|
15-16,999|x
17-19,999|
20-21,999|
22-23,999|xxxxx

you've got a problem.
I get what you're saying, (though your chart is not consistently spaced, e.g. cost different from 12-14.9K to 15-16.9K, etc.).

You really can't make a frequency table when the data collected is mutually exclusive. What I mean is, each price has multiple factors that contribute to the end value, and those factors act as a function of that price. The histogram or frequency table you've proposed implies all costs are relative, though you'd need to make a table for every standard make / model / year, and then within those subsets, compare means, standard deviations, and alpha values for significant differences.

After you've done all that, you can make have a chart, which as one may assume, will have a standard distribution. Any chart you make now, will have that erratic pattern your second frequency table showed, simply because each f(x) will vary (where x = $).

Regardless, using the Fermi method, one can derive an estimate of what that standard distribution will be. In June Subaru reported a record sale of ~40,000 Subaru's in the US. Assuming a standard deviation of 10^4, one could deduce that, on average, ~30,000 cars are sold any given month. That's 360,000 vehicles a year, and over the course of 10 years, ~3.6 million Subaru's. If the price of a new Subaru is ~$30,000, and depreciates annually at an accepted rate of 15%, that gives a range of ~$5,900-30,000 of cars sold in 2003 to 2013. From this value, one would then assume that the median price is ~$17,900. If we substitute this for our mean, and again assume a standard deviation of 10^4, that gives us a range of ~$7,900-27,900, which means that 68% of ALL used / pre-owned Subaru's, sold between 2003 to 2013 will fall within that price range.

What does this all mean? IN GENERAL, when shopping for 2003-2013 Subaru's, OF ALL COLORS, CONFIGURATIONS, MODELS, FEATURES, ETC. one should expect to pay within that price range, where lower prices obviously correlate to older units. The other 32% will fall on either side of that price range. This price is excluding high-high end models, such as a new STI or new Tribeca, which can go upwards of ~$40,000 with added accessories / premium add-ons. This also excludes modded cars, since that just incorporates more variables, to an already complicated, and loose pricing. Also, those prices are extremely subjective, since someone like me (who doesn't need / care about performance mods) would value them at $0, despite costing 10's of thousands for some to build.

I suppose potential buyers can use this price as a reference, in substitute of DentMagnet having to calculate f(x) for every specific Subaru out there. Although that will have changed by next year.
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Old 10-04-2013, 11:52 AM   #19
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I bought my used 2006 Impreza 2.5i for 10K back in 2010. Can I now sell it for $16K?
What is the point of this thread?
BTW, that AT&T commercial is funny.
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Old 10-04-2013, 11:59 AM   #20
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Quote:
Originally Posted by JohnM10 View Post
I bought my used 2006 Impreza 2.5i for 10K back in 2010. Can I now sell it for $16K?
What is the point of this thread?
BTW, that AT&T commercial is funny.
You can attempt to sell it for $10k.

I've had plenty of internet PM arguments with people who think their 120k mile, run of the mill 06 WRX is worth $16k, it's not even funny. I sort of have some data points that I point out to these people.....since I bought and a few months later sold an 07 (1 model year newer) WRX Limited (limited...) with 86ishk miles (less miles) with an STi tranny (6 speed, not plastic geared 5 speed) this year. I sold it for $13k and I had it for sale everywhere. Craigslist, nasioc, nesic. I had 3 people look at it. One disappeared. One offered me a trade for an automatic Honda and the difference in cash (total about $14k) and the buyer who got it for $13k. Tell me how a higher mile, older car with cloth instead of leather and an about to blow up tranny is going to pull in $16k.

It's that simple. It's clean, not Queen.

If the graphs had "sold for" prices, they might have some value. Asking prices are a joke. Go look at our private vehicles for sale section. I recently deleted an ad where the car had been for sale for 3 years. 3 years. Come on. Nobody with a car for sale for 3 years is even aware of reality. Yes, he internet argued me.
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Old 10-04-2013, 12:06 PM   #21
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The proof is in the pudding, of ~20,000 priced Subaru's on Autotrader.com (2003-2013), all pre-owned, ANY distance in listing...the average price is $18,300, only a couple hundred off from my rough estimate. Meaning, about 13,600 of those cars will cost between ~$7,900-27,900.
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Old 10-04-2013, 12:16 PM   #22
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Quote:
Originally Posted by JohnM10 View Post
I bought my used 2006 Impreza 2.5i for 10K back in 2010. Can I now sell it for $16K?
What is the point of this thread?
BTW, that AT&T commercial is funny.
Well, if you attribute 15% attrition to value, that's $6500, though I wouldn't do that, because that's insane. Unless you have some crazy ass mileage on the vehicle. With the average range of $7,900-27,900, it works to about $2000 each year of all given models, colors, makes, etc. A 2006 would then be valued at about ~$13,900...again unless there's like 6 miles on it...factor in the 15% attrition value of $6500, you've got an average value of ~$10,200.

On AutoTrader, the average price of all 2006 Impreza models is ~$9,300... (~$4,900-14,000) so there ya go. That's mixed in with private and retail, so again, you could see more, you could see less than $10k.
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Old 10-04-2013, 12:30 PM   #23
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Time is a factor in pricing. If you need the car sold now, then you must price low. The buyers in the market are random. Some will pay a premium, some won't. The hard part about selling is that you have no control over when someone is looking. This means it can take a long time for the right people to come into the buying market. It might be 2 weeks. It might be 2 years. If you've got time, you can price high and simply wait. That person willing to pay a premium will come, but you have no idea when. You just wait, wait, and wait some more.

The funny part is you can actually price very low, and you still might be waiting a very long time depending on how desired your vehicle is to the consumer market. A specialty car may require a specific customer type rather than simply the masses. In this case, pricing low or high doesn't really matter as much. You can price ridiculously low and generate a sale from someone outside of the normal market segment, but you're likely cutting yourself very short. Unique products take time to sell since the buyer is a much smaller segment of the market. You can still price at a premium or price low, but it's still a waiting game for that small sliver of a market.

When I bought my current Forester XT it was on the market for several months. It was priced well for the package it had, but it was unique and catered to a unique market. I was one of the unique buyers, but I came along months down the road. I pretty much bought it instantly once I was in the market to buy and became aware of the vehicle, but the seller's wait time was completely random. Me being in the market was a fluke of pure luck on his part, and he could just have easily waited 2 more months, still priced well, simply waiting for another buyer of that market segment to pop into the market.

You'll also see a LOT of "I'd love to buy that car...if only (insert excuse)" It's also a timing game even with awareness because things like cars require finances of sizable quantity. Also, it gets increasingly tricky for modified vehicles priced above book value since you can't get a loan for the value of the car. Even if you're doing financing to allow the purchase, you may still need a chunk of money out of pocket to hop into that purchase. Then you have people selling their own cars to hop into another car, so if you're a seller, you may see interest for purchase from another seller doing his/her own waiting for sale.

At the end of the day, price can be negotiable. The selling game is more a factor of time and random participants than pricing structure. The harder part revolves around random luck that someone's in the market for what you have to sell. Once you have interest, then you can play with pricing to generate the sale in the time frame you need.
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Old 10-05-2013, 05:32 PM   #24
DentMagnet
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Quote:
Originally Posted by Uncle Scotty View Post
yeah.....the OP is one of those idiot savants who just does NOT understand what's going on here....

search some of his other threads/posts for proof
Suppose I want to change what's going on here. What are my odds of doing that?

You are defining me: there is at least one book on verbal abuse that mentioned this technique so you should probably come up with new, novel techniques.
You're not quite the same as LIChuck, his motives for insulting me are somewhat different, but you seem just as compelled as he is. I doubt that either of you understand why.

For selling cars y'all might want to look into the Effros Method that also supposedly works for selling cars in any condition: missing engines, mods, etc.

Last edited by DentMagnet; 10-05-2013 at 05:51 PM.
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Old 10-05-2013, 06:04 PM   #25
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Quote:
Originally Posted by DentMagnet View Post
Suppose I want to change what's going on here. What are my odds of doing that? You are defining me: there is at least one book on verbal abuse that mentioned this technique so you should probably come up with new, novel techniques. You're not quite the same as LIChuck, his motives for insulting me are somewhat different, but you seem just as compelled as he is. I doubt that either of you understand why. For selling cars y'all might want to look into the Effros Method that also supposedly works for selling cars in any condition: missing engines, mods, etc.
I have nothing against you but I feel like every post I've seen you make over complicates things even though it seems like your intentions are good.
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