Warranty Work, Distribution, Better Understanding!

[Duckhnt]

I have been reading alot of posts regarding dealer support on warranty repair work and internet sales options...I know a lot of you guys are knowledgeable about tractors but I have not read one post on any thread which has indicated a true understanding of sales and distribution of product (tractors in this case). A few points

1) "Dealer where you bought your tractor must service it" Dealers are simply trying to protect their margins from out of state internet marketers. Your local distributor has NO leverage other than inciting a little fear about not getting your tractor fixed unless you buy local...And to be frank...if you buy your tractor out of state on price you should go to the back of your local dealers line!

2) Dealers make money on warranty work sure...But by and large service work is viewed as a necessary evil...they have to service the tractors they sell, and are hoping to get your business after the warranty runs out...Margins on warranty work is not as high as any other sales component in the company. People that buy over the internet and state lines should understand you can not have your cake and eat it too. Local Dealers must make margins on the sale of tractors in conjunction with service...They CAN NOT make it on warranty service work alone! If Kubota wanted to protect its distribution they would have a rule that stated you must have warranty work done where you bought the tractor!

3) The way Kubota has structured and given the ability to sell over the internet and state lines helps Kubota market share in the short term...Kubota frankly does not care if you buy the tractor for 50.00 over cost...They got you to buy Kubota and not JD or NH. The issue will arise when local dealers have an uprising over the fact that Kubota does not protect them on the sale margins on the tractor initially but require local dealer to fix warranty work at fixed margins on tractors they did not sell. What happens long term is that dealers are forced to explore distribution alternatives with manufacturers that may not be as popular as Kubota but offer protection at the sale.

Not every local dealer is good Granted...but when you buy a tractor out of state and then ask the local guy to support it ...it would be like bringing your McDonalds Combo meal into and sitting at a table in Ruths Chris Steakhouse, expecting the waitress to bring you more tea while you eat your Big Mac!!

 

[Henro]

Uh...

I guess you favor buying local, eh?

I did but personally don't...care which way one does it...

By the way, if you read the archives I think you will find the same points made time and time again... /forums/images/graemlins/smile.gif

in the end...to each his own....

 

[DCRC]

As a small business owner I think every local business deserves a chance at your business as a consumer. It's up to them to loose it. If we don't support our local small business and buy soly on the internet, mail order etc... Who's going to be there when you need that small specialty part in a pinch?

I consider myself to be an informed shopper. I usally don't need a sales reps help except for placing the order, or filling out the paper work. So why would a business or dealer turn down a smaller than normal profit on an easy sale to compete or prevent a sale from from going out of town? As a business owner I know I wouldn't. I'd try to come up with a price that both I and the customer could live with.

When I recently purchase my tractor I looked at just about every Kubota dealer in my area and some a little farther. I end up finding a better price by about $500 bucks than one of my local dealers. As a compromise I ask my local dealer to split the difference and meet me halfway ,which he did. I was happy with the price, and happy I didn't have to drive hours out of town to go pick a tractor up.

 

[Tom_H]

Just curious duckhnt, are you a dealer? From your point of view, it just sounds like maybe you are.

Assuming you are, it also sounds like you are unhappy with both Kubota and with customers who buy elsewhere but come to you for service.

As for buying over the internet, people may use it for information, but I have not heard of any tractor purchases except those where the tractor actually goes from an authorized dealer's brick and mortar location to the customer. Last time I checked, I couldn't get a BX mail order from Amazon.com. The internet simply enables free market competition. Isn't that what capitalism is supposed to be all about? Businesses want freedom from regulation when it helps them, but when competition gets tough, then they want a protected market. You can't have it both ways. Fortunately we live in a nation founded on principles of freedom; if a customer wants to buy a tractor from another state, AMERICA GIVES HIM THE LIBERTY TO DO SO!!!!! If you want to make a sale, be competetitive. That guy who undercuts your price has signed the same contract with Kubota that you have. He has to offer warranty service to everyone who comes to him.

As far as contracts go, a signed contract is a legal document. My local service manager just plain out lied to me about his contractual obligations. When I came back to him (politely) with Kubota's contractual language, he angrily chewed me out. Now I'm a public employee. All the time I'm hearing this stuff about how public entities should be run like private ones. I gotta' tell you, if I lied to and angrily chewed out the people whom I serve, my supervisors would fire me faster than I could spit. From my point of view, more businesses need to practice the kind of honesty and courtesy that my public agency gives.

If you can't stand the heat, then git outta da' kitchin. If you don't like what Kubota asks you to do, then be a dealer for someone else, but my gosh, I didn't appreciate that anger being directed at me through lies and vulgar lectures from my local svc. mgr. My local dealer used to sell New Holland and Kubota. He got peeved with NH, so he dropped them and now only carries Kubota. There's no NH dealer close by any more. From him, sounds like Kubota treats him a whole lot better than NH did. If you don't like Kubota's contract, don't sign it; but if you sign it, be a man of honor and integrity by complying with the contract you signed. And be man enough to do it with common courtesy and decency. Some parts of my job are not my favorite but I still have to do them. The fact that they're not my favorite doesn't give me license to lie and be rude to the customer. If you don't like sellin' tractors, don't take it out on the customers, find some other line of work. People do it every day, some by choice, some by necessity.

 

[DannyD]

The first tractor I bought came from a dealer 75 miles away, the close ones were to expensive on the price, or I would not do business with them because of their attitude and demeanor. I take my tractor back where I bought it, but in a pinch I would use a local guy, but would not expect to be put first in line, but would expect to be told when I could pick it back up. First in, First out.

One of my local guys was a bit upset that I bought out of my region, but I will be green if Kubota ever tells me I have to buy from my local guy, and he can price it as he wants. If they make you buy local, then EVERYONE should have EXACTLY the same price.

Now my dealer had not even met me first time I bought, I called him, told him what I wanted, got his price and paid him the deposit to order it..............all on the phone with one call.

My second from him will be the same way. Monday I am placing my order for a new BX 23 and trading my 2200, IF his numbers stay the same as today......if not, I aint buying. I will finance it with him, since he has 0% thru Monday, but otherwise would write the delivery guy a check and be done iwth it.

2 sales, both took about 30 total, and I would bet he is happy with me.................bet I get on his card list for Christmas this year.

Warranty, yeah it goes back to the dealer, unless I am in a pinch. My dealer will put in the schedule, then let me know when to be there with it, if the service is not major. That way I can drop it off, spend sometime in his town, and take it back with me same day in most cases.

 

[gsxr1100]

A dealer does not have to do any thing if he wants. If he wants happy customers and customers to come back to his business, he will be nice. If he was to get PAID they will do the work no matter what.

The local tractor sale people need to be more competitive with there prices. Since the internet people realize that the local guy needs to come down to earth. Peope can now shop around easier. Same thing with cars now.

I sell guns and have had people tell me they can buy a Desert Eagle, Glock cheaper from someone else. I say I will try to do my best to meet that price; however, if I can't I would buy it down the road or online. I tell them that since I would do the same thing if I was i there spot. If they buy it from me instead on online I would give them a few boxes ofd ammo or make up the delta in price another way. You do not
see my local Kubota dealer doing that. He just gives he the price and says take it or leave it. Or the "You do not buy it hear line"....


I do not mind supporting my local guys for a small delta in price (ie 2 or 3%). But my local moronic dealers where 13.8% on avg without taxes; so, either they want my business or not. I work hard for my money and not going to give it to high priced dealer no matter how close.

Dealers make money yes on warranty items. If they fix the item correctly and within a certain time limit I would go back. If they give me more aggravation, long-lead times, original problem not fixed or made another problem, see ya later local dealer.

People who buy online can have their cake. The customer has a lot more options then the local dealer. If the dealer wants to give me crap for saving over $3K then so be it and I can move down the road, he can't. He would have done the same thing if he was in my position when saving money.

No, no dealer can't make it on warranty work alone, but it is a baseline to get people in the door. They, the dealer, can't have their cake and it too. We, the customer have more options then them. In today's world it comes to numbers and profit. If the customer does not feel ok about their local dealer, chances are there is one within a small radius. They are not the only game in down.

You hit it right on the head. Kubota does not care, as the same goes for any sales online or not. It is up to the dealer to set the price. Same with tire shops, car sales, anything that involves the middle man or not. Everyone has a markup and most are a 100% or more markup. If they [dealers] wants to move product and get more people in, he will have lower prices. In the end again, it comes down to dollars.

If the local guy does not service my BX22 because I bought it out of state, it is his loss. I tell people do not waste your time with my local dealer. He is a joke for what he did when I walked in and asked a few questions. So I bought it out of state and saved a little of $3,000 and since then recommend my out of state dealer to over 6 people and 3 have purchased BX22 or 23's from him. Tough luck for my arrogant and rude local guy. So, because he was a moron he lost sales and all the people I say do not go there. A little known fact that the customer is always right and in this case the customer pays his lease etc;

As you can tell if is VERY hard to push the local dealer stuff on me. I have been there and done that and so far my local guys are, well I can't post it since I would be off this board.

 

[familyman]

Hey, Duckhnt!

I believe you're absolutely right when you say we should support our local retailers, of any kind. While most of us have shopped at WalMart at one time or another none of us is blind to what happens to local retail when a WalMart comes to town. I'd rather buy a washer/dryer from my local guy -- it's probably a family business (a purchase would therefore be supporting at least one local family) and he should know and service his merchandise better than a big chain store. However, we all must draw the line -- when a dealer acts like a jerk, or is more than say, $500 over a competitors price, the consumer has every right to move on.
I usually order my decoys from Herters, BUT if a local dealer has them at the same or better price, he has my business!

Charley

 

[Inspector507]

Isn't the Wal-Mart down the road a <font color="blue"> local retail </font> ? They are also a huge employer for the local work force and they pay taxes into the local governments tax base.

Just my thoughts. I hate going there myself.

 

[Duckhnt]

No I am not a dealer....Free market is what makes the world go round, I agree with that for sure...The only way for Kubota to keep distribution happy LONG TERM, would be to set the pricing at the end user level. Anyone caught selling a tractor for less would potentially loose their distribution right to the line. Take any line sold at Wal-Mart or Lowes, a shovel for example...The manufacturer gets their shovel product accepted by a big box store..Woo everyone at corporate is dancing and partying, they had to undercut other manufacturers and are only making 9 percent...but they will sell Millions. That shovel company has 1000 distributors nation wide say...What are they going to do? The only choice they have is to sell a DIFFERENT line that will not compete on price!! One day they wake up and Wal-Mart wants them to sell to them at 7% and the shovel company realizes they have put all their business into one or two baskets and have no leverage any longer.

The point is with more cross selling going on into different geographic markets Kubota, and any manufacturer for that matter, needs to take a long hard look at protecting distribution margins some how for their own long term growth potential.

Look at it this way..Why don't you see a Kubota dealer every 10 miles? Because the market will not support it. I am sure their is a ratio of how many people within a radius before it will support a new dealer...With dealers aggressively expanding their realm of sales geographically, but not service, and overlapping into other markets, what will give?? It is equivalent to having a dealer within that market. The dealer with higher margins will fail, leaving only the guy further away to support the territory. Leaving ultimately unhappy customers on the SERVICE side.

That's all I am saying...With the path Kubota is going down it is SERVICE to the Customer that will ultimately fail...

 

[familyman]

Poor choice of words on my part, I guess. I agree with Duckhnts' follow-up. It's in the nature of how WalMart does business (and Home Depot, etc.) that will ultimately change the face of retail.