Buying Advice Cabela's Tractor Help PLEASE

[AxleHub]

It might not matter but could this be why prices are low?
http://www.omaha.com/money/prospect...cle_17c99d8e-a9f3-524b-971c-0642bbd9d56e.html
DevilDog

This is old news. Bass Pro and Dick's or Gander - none of them have the financial capacity to accomplish it according to numerous articles by wall street analysts. In fact Dick's csncelled all of their new store plans about 18 months or so ago and Gander is just coming out of chapter 11. Bass Pro isn't setting the world on fire and they'd love to have cabelas credit card business. The point is . . 5 years ago or less cabelas was 15.00 a share and rumored to be failing . . . Obviously at 40 to 45.00 a sre now . . they proved them wrong.

They lost money on tractors because of upfront development costs and marketing costs right at exactly when the tractor business in general was slowing down everywhere but scuts and the very small cuts.

Like many retailers from Macy's to Penny's to Walmart to sears or 50 others that are closing stores etc. Etc. . . the economy isn't what the government wants you to tbink. Cabelas like any good business realised they made a mistake anf are cleaning it up.

 

[Jim Timber]

Retail margins are anywhere from 20-400%. What's the margin on a tractor? Well, a realistic priced tractor, not the 30% over-market attempted price they were going for before the blow out. Maybe a couple grand on a $20,000 sale - 10%?

So I have $18,000 tied up in a tractor that will make me $2K. Or I could put that $18K into fishing accessories which would produce $18K+ in profit and turn over in a couple months. Hmmm, I wonder which one I want to sell?

 

[tman1020]

I believe the price will continue to drop even if they sell at a loss unless they sell out before that.
They didn't have that many tractors to begin with so shouldn't be that hard to move them all. But if they do have a hard time I would imagine The deals will be phenomenal. Especially if there's only a handful left.

 

[Handloader109]

They're not getting out of them to make selling the company easier, they're getting out of them because they're not selling fast enough to justify the volume of marketing they consume to attract the buyers they've seduced in the last 3 years. Big ticket items are slow movers. At least with boats there's enough market slosh that people want to upgrade every few years. When you sell a tractor that meets the customers needs, they're not going to get rid of it on the same cycle as a boat and thus your cost of acquisition isn't amortized over multiple purchases for the life of that customer - it's one and done for the next 20-30 years (unless the machine is crap).

The long and short of it is that them selling tractors isn't profitable enough to keep doing it. They're discounting them to get them gone! That's cash tied up in dead weight they can't put towards buying inventory they can turn over and make money on. Simple business economics. You only get paid when it leaves.

Absolutely right. They weren't being sold fast enough to pay their own way. A nich market to start with.

 

[AuburnAlum]

They're not getting out of them to make selling the company easier, they're getting out of them because they're not selling fast enough to justify the volume of marketing they consume to attract the buyers they've seduced in the last 3 years. Big ticket items are slow movers. At least with boats there's enough market slosh that people want to upgrade every few years. When you sell a tractor that meets the customers needs, they're not going to get rid of it on the same cycle as a boat and thus your cost of acquisition isn't amortized over multiple purchases for the life of that customer - it's one and done for the next 20-30 years (unless the machine is crap).

The long and short of it is that them selling tractors isn't profitable enough to keep doing it. They're discounting them to get them gone! That's cash tied up in dead weight they can't put towards buying inventory they can turn over and make money on. Simple business economics. You only get paid when it leaves.

Well said. As someone that worked in the retail space for many years stores are judged on sales per square foot. Granted the Cabela's stores with tractors are large but it does matter. Im sure they were a drag on the square foot sales ratio.

Also to note that only stores with Wildlife Management departments are selling and will service the tractors. This is noted on the web page and if you call the 1800 number.

 

[Jim Timber]

I think they were betting on holding inventory in the front yard, and could move a decent amount of product with minimal square footage on the sales floor. The Rogers store had 2 tractors inside which had a snowthrower on one and a bucket on the other. Nothing on the back. They had A salesman who was fluent in the products, and he wasn't very good at promoting the line; everybody else did boats.

I think what they hoped for was that tractors would be a fall boon and would make up some of the slow season when boats don't sell at all here (September to March). The problem is that food plotters are as active in the Spring as boaters, but we don't buy as much stuff at retail - too much used farm equipment that farming has grown out of; it's hard to sell the weekend warrior on a 50K package to plant seeds when a 20K used tractor and some used implements will get the job done just as well. I have some very wealthy friends who even pause when they think about how much money they throw at the pursuit of deer, and they've got it to burn - but they're not buying Cabela's line either, they're out looking at used drills, etc.

Someone really screwed the pooch on the experiment, but you have to give them credit for trying. Takes some big stones to put that much money into a line with low profit potential hoping it'd cash out in subsequent ancillary sales.

 

[daugen]

I think Kate and her husband will be delighted with their purchase.
I'm also glad she went larger vs smaller. Wish I did as my L loader won't lift what I wished it would
and I should have bought an M. I was a total newbie to new tractors too, though I grew up with a JD B and owned a little
Case IH 255 at the time. And desperately needed a cab for field mowing due to allergies.

It's not like the dealer allows you to take the tractor home and go try it out. So if the physical size works,
I'd go for the most hp/capacity your budget
will allow. Most of us only do this once, particularly as we get older.

Lastly, my local Kubota dealer in PA was so friendly and helpful there was no way I wanted to buy from anyone else. And what I read in here was that tractor markup was about 30% and if you got half off that was a good starting point. So the dealer has a 15% margin on say a $40k product. Maybe half of that $6k goes to the dealer's bottom line. Not a lot of money for a big ticket item that may have incurred floorplan costs. And as has been well said, the buyer isn't usually going to come back in two years for the latest model. So that one time profit has to be used for customer satisfaction for years to come. Very different approach than the auto dealers and I bet tractor dealers eat a lot more repair expense for their customers than car dealers do.

The South Korean tractor market seems very competitive so I think we will see a steady increase in quality and technology from their products as they try to meet the standards set by Deere and Kubota. And we all know if we can spend ten grand less on the tractor, that will buy some very good implements to use. The tractor is just the beginning...the fact that Cabella's implements are made by Woods is super. That was a good choice for them and for their customers.

 

[whizdbiz2]

I have to admit I have NO experience with TYM at all. It's possible they are a great tractor for the money. Any long time TYM owners that can comment on their overall quality?

My small Mahindra is TYM built and I've had it almost 2 yrs (engine is Daedong). No issues with it at all.

 

[Jim Timber]

TYM makes some of the larger tractors for Deere in the Asian market. I have no questions about their quality, I only question parts availability and service I'm not able to handle, as we have Zero TYM dealers other than Cabela's in MN.

 

[TomSeller]

Anyone hear if TYM has a plan to boost dealerships or did the Cabelas thing come up too quick? Personally I think they should go with their own brand and not rebadge, I think the consumer is better served. In the car world it seems more common for a dealer to sell multiple brands than in the tractor world. They could go after the single LS/Kioti/Branson/Massey/Mahindra dealers and try to get them to double up. Might not be ideal for those brands, but the dealers should like it.