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Old 02-19-2022, 07:44 PM   #1
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Maintaining Return on Investment

I’m not an economics guys, so perhaps someone could explain this to me. I found this graph in the latest newsletter interesting. ETI is highlighting these increases on return over original purchase price. Clearly they are in defense mode regarding their recent price hikes. It seems the primary reason for the steady trend in increased return based on time is probably their consistent ~10% annual increase in base price. For those that have had a trailer for many years, has the 10% per year thing always been the average increase or is this due to the pandemic and supply chain issues the past few years?

It seems, had they only been increasing at average inflation rates of 3 -5% as was the average rate the past 10 years, I believe these numbers would be a little flatter. Of course, quite frankly, no owner is going to complain about selling something for exactly what they paid for it after a few years. But by increasing prices at a higher rate than inflation, I think that’s where you see the extra bump to selling it for MORE than original price.

However my curiosity is such that 10% annual rate hike has always been the norm and will continue to be, assuming the inflation in the economy slows back down to its normal 4 or 5%, wouldn’t that put these trailers further and further outside of the spending power of your average middle class consumer? Again, not an economics guy, just trying to wrap my mind around it and I know a few of you guys excel with this stuff.
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Old 02-19-2022, 08:09 PM   #2
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Oh, where to begin!

75% of used trailers selling within a week is probably consistent with molded fiberglass trailers historical sales rates even before the pandemic. However, over the past couple of years RV demand in general has shot up as seemingly everyone and their brother has gotten the bright idea to "vacation safe" by going RVing. Add that to all the durned baby-boomers like me and 3/4 of the other folks on this forum who want to retire and travel, and the RV industry is producing record numbers of units and National Parks and other facilities are experiencing record attendance.

Since the pandemic began, Escape has missed delivery dates, citing issues with labor not showing up, supply chain difficulties, etc. So, they quit "guaranteeing" delivery dates and now appear to be WAY-under-promising so that they can over-deliver.

The one that I think is really cruddy is the resale price over original purchasing price graph on the bottom half. As you indicate, one reason that the older trailers are selling for so much over their original sales price is that Escape's retail sales price for more recently constructed trailers has shot up so steeply.

In other words, the price to build a trailer similar to our 2017 trailer today is now crazy-high, so people who want to purchase a trailer in something less than a couple of years are now willing to pay a price that resembles the much-much-higher price of a new one.

Personally, with people signing up to wait for years for a new trailer, I think that Escape should tend to their knitting and focus on building trailers, not be publishing graphs implying that they are doing everyone some kind of special favors here.

There's really nothing that they have done to create these conditions other than produce less trailers than their plant's capacity due to labor shortages and other factors, thereby leaving additional demand unsatisfied. Those new stock flooring and countertop and interior color alternatives are NOT the reason why folks are lining up at the doors there; we got custom flooring and countertops with our build in 2017.

So there's really no sense in them patting themselves on the back over exceptional market conditions that they didn't really create. Grrr.

They are also not factoring in the time value of money. While I might get more dollars than we spent in 2017, those dollars are worth less than the dollars I paid to buy the silly thing. If I was their economics or engineering professor, I would give them a failing grade for producing such a specious "analysis". Grrr again.
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Old 02-19-2022, 08:53 PM   #3
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Originally Posted by Civilguy View Post
Oh, where to begin!

75% of used trailers selling within a week is probably consistent with molded fiberglass trailers historical sales rates even before the pandemic. However, over the past couple of years RV demand in general has shot up as seemingly everyone and their brother has gotten the bright idea to "vacation safe" by going RVing. Add that to all the durned baby-boomers like me and 3/4 of the other folks on this forum who want to retire and travel, and the RV industry is producing record numbers of units and National Parks and other facilities are experiencing record attendance.

Since the pandemic began, Escape has missed delivery dates, citing issues with labor not showing up, supply chain difficulties, etc. So, they quit "guaranteeing" delivery dates and now appear to be WAY-under-promising so that they can over-deliver.

The one that I think is really cruddy is the resale price over original purchasing price graph on the bottom half. As you indicate, one reason that the older trailers are selling for so much over their original sales price is that Escape's retail sales price for more recently constructed trailers has shot up so steeply.

In other words, the price to build a trailer similar to our 2017 trailer today is now crazy-high, so people who want to purchase a trailer in something less than a couple of years are now willing to pay a price that resembles the much-much-higher price of a new one.

Personally, with people signing up to wait for years for a new trailer, I think that Escape should tend to their knitting and focus on building trailers, not be publishing graphs implying that they are doing everyone some kind of special favors here.

There's really nothing that they have done to create these conditions other than produce less trailers than their plant's capacity due to labor shortages and other factors, thereby leaving additional demand unsatisfied. Those new stock flooring and countertop and interior color alternatives are NOT the reason why folks are lining up at the doors there; we got custom flooring and countertops with our build in 2017.

So there's really no sense in them patting themselves on the back over exceptional market conditions that they didn't really create. Grrr.

They are also not factoring in the time value of money. While I might get more dollars than we spent in 2017, those dollars are worth less than the dollars I paid to buy the silly thing. If I was their economics or engineering professor, I would give them a failing grade for producing such a specious "analysis". Grrr again.
I believe the appropriate quote is; There are lies, damn lies and statistics
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Old 02-19-2022, 09:35 PM   #4
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I believe the appropriate quote is; There are lies, damn lies and statistics
.
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Old 02-19-2022, 09:44 PM   #5
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Check out this one........

Feel like I'm in the late 70's, early 80's again...


The Op's reference to "3 to 5% inflation" is a Fed flavored joke.......especially for the last 2, or 3 , years.

Try 10 to 20% depending on the commodity.



Here ya go:

"Base" E19 bought for US$27k in late 2019, now for sale for $36k.

https://escapetrailer.com/pre-owned-trailer-listings/

Bet it is gone in a week......

Hold on to your hats folks..........you ain't seen nothing yet.


Hint - it ain't ETI doing this........they are just reacting to such.
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Old 02-19-2022, 09:48 PM   #6
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Originally Posted by Civilguy View Post
............. While I might get more dollars than we spent in 2017, those dollars are worth less than the dollars I paid to buy the silly thing. If I was their economics or engineering professor, I would give them a failing grade for producing such a specious "analysis". Grrr again.

And that is ETI's fault?


"Professors" - I won't even go there.................indoctrination instead of learning critical thinking comes to mind.
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Old 02-19-2022, 10:00 PM   #7
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I had a 1977 Trillium, paid $3500, sold in 2015 for $4750.

Then I had a 2007 Escape 17B, paid $15k in 2015, sold for $16k in 2019.

My friend bought a 1978 Trillium in 2011 for $3200, barn kept original owners, used 10 years, sold for $13k after a bidding war.

2 more friends had late 70's Trilliums and made off well, can't remember ##'s

Friend from work bought a gutted 1980 Bigfoot 17' for $3k in 2017, renovated it and sold for $13k, same thing bidding war.

Anyone I know who bought a sticky, Jayco, Fleetwood, Forest River, lost their shirt.

I will admit, it took a while to sell my 17B, and it was very clean and in good condition. One person that came to look actually ended up buying 2 Escape 21's., her and her father, I should have got a commission.
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Old 02-19-2022, 10:12 PM   #8
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somebody research fiberglass products and availability and then tell me 10% increase in price is overstated and gouging.. FG is petroleum based.... My buddy who owns a FG gelcoat distribution warehouse Doubled his prices a few days ago.. He sells gelcoat/glass mat/resin products... He has a hard time keeping and getting product.. As one of the leading gelcoat suppliers to the boat building industry, he could understand how ETI was holding prices where they were..I had told him about price increases...
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