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July 26, 2017

Dealing With High Gas Prices


I don’t know DeWayne Butler, but his business seems to be very similar to my own: auctioneer, antique dealer, and raconteur. His comments in the video below got me to wondering about how other antique dealers budget for gasoline expense. The cost of gas varies wildly from state to state, and month to month.

I live in the Blue Ridge Mountains of Southwestern Virginia, and it’s very rural here. The closest mid-size cities are about 75 miles away, but there are a couple of college towns about 50 miles away. The upshot of this is that I can easily drive 300 miles on a Saturday hitting the sales, and one auction per week can add another 200 miles or more to my mileage total. I drive a Dakota pickup with a V-8, so I can spend a small fortune on gas. I prefer the pickup because I can carry big furniture items in it and still have enough power to make it up the mountain.

Right now, gas is at the lowest level in more than a year ($2.64/gal). A few moths ago, it was about 50 cents per gallon more. That’s a monthly gasoline expense of between $350. and $450. How can I justify that expense, when there are so many alternatives for buying inventory?

If all I’m buying are smalls, it doesn’t pay me to drive around to yard sales. Shipping costs are usually low on smalls so if that’s what I’m buying I prefer eBay or liveauctioneers.com, where I can choose from a variety of items from the comfort of my office.

Estate sales might be worth the drive depending on what they are selling and if I can get there early enough to be one of the first in the door. I prefer to buy at estate auctions that have a good selection of smalls plus some antique furniture.

One thing I absolutely don’t do anymore is peruse the classifieds for sales, plan a Saturday morning route, and take off driving with the hope that I might find something worthwhile. Doing so is a waste of gas, in my opinion.

Some dealers keep track of the amount they spend on gas and add it to the cost of the merchandise that they buy on any given day, claiming that the gas is an “acquisition expense”, much like a shipping charge. Adding the cost of gas to the cost of merchandise is not a good accounting practice; it skews the value of the merchandise at wholesale and will increase the amount of personal property taxes that you pay. A better method is to simply create a “car expense” category in your bookkeeping Chart of Accounts and figure the expense into your overhead in the same way you do with rent and insurance.

Here’s the DeWayne Butler video. His approach to the gasoline issue is to buy more merchandise on each trip and pack a lunch.

 

Originally posted 2014-11-08 15:29:00.

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About Wayne Jordan

Wayne Jordan is a Virginia-licensed Auctioneer (#3481), as well as an AIA and CAGA Certified Personal Property Appraiser. Learn more at http://www.resaleretailing.com/wayne-jordan-auctioneer-appraiser/

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