Price Check wonder what the mark up really is

[Gator6x4]

Just because a dealer has a higher price does not make him a tool. I think that is a VERY unfair comment. There are maybe a hundred reasons why one dealer is higher than another but only one of them is greed. Would you be a tool if your boss came to you and wanted you to work for 20% less (because a company in a different state pays less for the same job you do) and you said no? Maybe one dealer has better service, maybe he pays his employees a livable wage, maybe he pays benefits, maybe he even has employees where the other dealer is a one man show who sells out of a shed behind his house, maybe he stocks parts, maybe the cost of doing business in one state is less or more than another, maybe he can do math and the other dealer cant (this is common), maybe he is working to stay in business and the other dealer is working to go out of business.

Everybody on this board wants to know what the markup is which there is no way to calculate till the end of the year. The invoice from the mfg is not the cost. The cost is all the debt added up at the end of the year divided by the amount of units purchased. Sure volume dealers can make it up in volume but what happens in years when there is no volume. Well we found out last year. When you need to sell 30 tractors a month at $500 over cost to break even and you sell 1............ Plus the volume rebate from an MFG on 100 tractors is maybe enough to pay the light bill.

What is a fair wage that a dealer should make? How much should his employees make? Without being called "tools"

Buck

Very well said. Something to consider when buying a tractor OUT-OF-STATE, the out of state dealer dealer will probably not charge sales tax where the local dealer has too. Sometimes if you take the tax off the price quoted by your local dealer you will find the OUT-OF-STATE Dealer is charging the same price for the unit. Something else to consider when making an OUT-OF STATE purchase is, are you financing the purchase? If financed the Finance Company or Bank handing the paper on the tractor will file a lein on the tractor in your state of residence. Guess who looks at this paper work and will send you a tax bill on the purchase price of the tractor plus fines and penalties.

 

[EFC]

Sorry, that was a VERY fair comment. I was not refering that the dealer was a "tool" if his price was 1500 higher. It was in reference to the

"Buying from a dealer two hours away isn't going to make friends with your local dealer, and if you have to truck that tractor back to the original dealer for service, it will cost you far more that what you saved on the intitial purchase"

The dealer should want your "service" business wherever you bought the tractor. If he doesn't want to be "friendly" with you because you bought a tractor somewhere else, quite frankly, he would be a "tool" in my book.

We can only respond to what you write not what you intended to write. Turning away his service business wouldnt make sense I agree with you on that. Not wanting his warranty work would make a little sense though since warranty is almost always a loss for the dealer.

Buck

 

[LRTX1]

EFC,

Maybe I should have been a little more clear. Sorry, if my comment was misleading.

As for the warranty work. It's his job as a dealer to perform it. It's none of my business if he is losing money doing it.

 

[DavesTractor]

Today i went to my mahindra dealer here in saraland alabama.He quoted me a price on a 1816 out the door for 10500.00.Well i came home checked a few dealerships over in Mississippi and the salesman said he will deliver the tractor a 1816 the 86 miles to my house for 9000.00 or i could by a 2216 for 9900.00 no fel i already have one on a 5530 4wd this little one will mainly be used to pull a planter so im wondering if theres such a difference in price how much do these tractors cost wholesale to the dealer btw the 2216 at my dealer was 12000.

It's great to get quotes in writing and ask the dealer to show any rebates or discounts on the estimate. Some dealers quote the 0%-60 month price (substantially higher) then apply a discount if a customer pays cash. Some quote the cash price, then take away discounts if you finance. Then there is the tax issue. I think often when we see a spread this large, it is not apples to apples. Tell your local dealer what you have found and see if he can match it.

Also if you want a certain model without a loader and the dealer already has the loader installed, he won't be as cheap as the dealer that has a bare tractor in stock already.

And as EFC has mentioned, a dealer that is in business to stay and pays it's employees fairly, gives benefits, has a proper level of parts, trained service reps, etc. will need to charge a little more to maintain that level of fairness to his employees and good service to his customer. I think most customers will pay just a little more for that. Tractors sales in California are down 70%, yet we gave our employees a modest raise this year and a small year end gift. Why? Because they are working their tails off, despite the economy and that is the fair thing to do. I can't do that and sell at 2% over cost, and if I can't treat my employees fairly, I might as well sell the place and retire. That is my little soapbox.

I've often wondered if a dealer could set up a two-tiered customer system. One would be VIP and would include free delivery, free pickup and delivery for services and warranty and maybe free scheduled services for the first 5 years. Next day air on parts, front of the line on service. Free loaner. Something like that, really over the top. The other we could call the parsimonious program. The price is rock bottom, but no free delivery, no warranty favors (where a dealer covers something out of his pocket-happens all the time), no free clips, pins, hats, toplinks, service calls, etc. No talking on the phone for two hours for free because you ran it out of fuel and can't figure out how to start it, or your radiator screen is filled with chaff or your battery cables are dirty. Read your manual. No sponsoring your child for his club, no wash job after a service, no full tank of diesel. Got a little weatherchecking on your tires, talk to Titan, it's not my problem...etc.

I'm not sure how you would administer such a program. I think, as a full service dealer, we just always strive for the VIP treatment. I think it would be almost impossible to pull this off. It's almost an attitude thing, and if a dealer were to do this succesfully, it could not be an attitude thing. That is why most dealers come down on basically one side or the other of the service spectrum. One is a discounter, the other is super customer oriented.

Just some random thoughts on service vs price. I tend to want price on simple things, click a button on the internet and it comes on the brown truck. If it is wrong, toss it and try again. On larger items or more complex items, I want outstanding service.

By the way, you bargain hunters out there, don't take any of this wrong. I don't blame you one bit for saving some $$ in this economy. You have a family to feed and must be careful. I'm just giving you a little dealer's perspective.

 

[MtnViewRanch]

Dave, I have to agree with you, it would be almost impossible to pull off. Just as you said, it seems like it's either one way or the other and that's fine. People just need to know and accept that. Pretty foolish to even think that someone is going to pay a rock bottom price and then expect to receive that VIP treatment. If someone is lucky enough for that to happen to them, then that is GREAT, but it certainly is not the norm.

I have seen it happen with other things, cars, trucks, boats, racing. Usually after some time they are out of business and someone is in jail. You know what they say, "If it's to good to be true, it probably is". It costs $$$$ to provide that VIP service, and if you happen to stumble upon it and are not having to pay for it in one way or another, then most likely someone is doing something illegally and it is going to be short lived.

Just what I have seen many times over the years.

 

[EFC]

EFC,

Maybe I should have been a little more clear. Sorry, if my comment was misleading.

As for the warranty work. It's his job as a dealer to perform it. It's none of my business if he is losing money doing it.

It is the moral responsibility of a dealer to accept your warranty work for sure but it is not always a contractual obligation. Top of the warranty contract has the MFG's name on it not the dealers. We are independent business owners not franchises and we can refuse service. Most warranties on tractors (which are not like auto warranties) say the customer is required to take it to the selling dealer to perform warranty work. Of course I have never turned away any warranty customer and I never will. How can I show you how great my service is if I dont let you in the door? But there is no way I can eat the little things the warranty doesnt pay for like Dave mentioned. No matter the brand, what the warranty doesnt cover is almost always larger than what it does cover. MFG's have people working full time to find a way around paying warranty claims to the dealer. My customers have never known that. For example if Mahindra doesnt reimburse me and it really should have been covered I take care of it out of pocket. What I have covered this year alone for my customers out of pocket would buy a new car. So yes I would work on your tractor and you would be treated the same as any other customer whose business is important to us and we are always trying to earn, but... What the MFG doesnt cover will be out of pocket from you. This is not punishment just mathematical reality. I dont know if that puts me in the "tool" category or not but like you said its none of your business if the dealer makes money and that is fair. But it is my business that it does. I am not trying to be confrontational and I hope your not taking it that way I'm just trying to show that it is more complex than ones and zeros and sometimes any future service or support disappointments are self inflicted wounds.

These days it is almost impossible to buy a bad tractor. Price is important, product is important and support is important. I think a comfortable feel in your gut on all three would be the winner for me.

Good point on the written quotes Dave. Sure helps when you know when your comparing apples to apples. I see a lot of numbers from other dealers scribbled (emphasized scribble) on business cards. I think that is really unprofessional and lazy. Really hard to explain the value behind your price on a two by three card. Tiered customer support and service just doesnt work you have to have one level for everybody. Quality customer service and support has a price though and low margin sales just cant pay for it.

Buck

 

[MtnViewRanch]

Buck, part of running your business the way that you run it is part of doing business. In my book you are not giving anything away, the FREEBEE stuff IS PART of doing business. It's just harder in the LEAN years. I've been in business for myself for a little over 35 years and never gotten rich, but I'm still in business and I still do warranty work for free.

The guy that works on 10% and does nothing else is out of business in a short amount of time.:thumbsup:The problem with those guys is that no sooner than one of them is gone, another one pops up that we have to deal with. Such is life, the world keeps turning, the sun comes up and goes down and we keep plugging along.

 

[buck12]

Everyone seems to make a huge deal of dealer support. I bought my tractor used and have been to both local dealers for filters and parts. Both dealers gave good service. I doubt the parts counter guy has a clue if the tractor was bought at their dealership. The only service repair I go to dealers for on cars, trucks, ATV, lawnmowers, etc is warranty work. After the warranty is over I prefer independent repair shops. If it were my purchase I would go with the cheaper price.

 

[brain55]

Everyone seems to make a huge deal of dealer support. I bought my tractor used and have been to both local dealers for filters and parts. Both dealers gave good service. I doubt the parts counter guy has a clue if the tractor was bought at their dealership. The only service repair I go to dealers for on cars, trucks, ATV, lawnmowers, etc is warranty work. After the warranty is over I prefer independent repair shops. If it were my purchase I would go with the cheaper price.

How many independent tractor repair shops are there in your area? They are all gone around here. There are a couple of guys with service trucks and me with my mobile shop and that is about it. Then again, there are no CUT dealers in either of the 2 local counties either.

When I worked at the first Kubota dealer I worked at, we probably sold 50-100 units a year and knew whether you bought from us or not. I was head mechanic and ran the parts counter most of the time. Believe me, if I had 5 machines I was working on in the back, and had to pick priorities, the customer that bought from us got higher priority, as did paying work, over warranty work. All of the work got done, but priorities have to be set with some kind of criteria, and it is not always first come, first served.

Brian

 

[buck12]

How many independent tractor repair shops are there in your area? They are all gone around here. There are a couple of guys with service trucks and me with my mobile shop and that is about it. Then again, there are no CUT dealers in either of the 2 local counties either.

When I worked at the first Kubota dealer I worked at, we probably sold 50-100 units a year and knew whether you bought from us or not. I was head mechanic and ran the parts counter most of the time. Believe me, if I had 5 machines I was working on in the back, and had to pick priorities, the customer that bought from us got higher priority, as did paying work, over warranty work. All of the work got done, but priorities have to be set with some kind of criteria, and it is not always first come, first served.

Brian

I use a friend that works for a dealer. His dealer allows him to do side work as long as it is not on the brand the dealer sells. In addition to this friend I know of least two more guys that do the same thing.