Would you pay extra to have hauling included for "free"?

[Capricious]

"..They actually have to profit from hauling, we just try to stop the bleeding..."



You could go the other way; sell the trucks & trailers, layoff the drivers, and hopefully reduce your costs enough to sell tractors cheaper than the other guys.

Try to make your money on what you do best, and let the haulers try to make a buck doing what they do best.

Let buyers know that a bottom-dollar deal includes NO transport for any reason. Give them a list of the local haulers, if the buyers don't have a way to haul themselves.

 

[Walkin Horse]

I and my wife are suckers for extended warranties. I was disappointed when the NH dealer steared
us away from a warranty. I even ask the price and he said I don't know never sold one.

I could see some good money being made if a customer wanted to buy a hauling warranty. Administering mite be hard but I bet some would buy it. Maybe if the offer was made that if it was never used half the price could be used towards parts or maintenance items.

 

[DavesTractor]

"..They actually have to profit from hauling, we just try to stop the bleeding..."

You could go the other way; sell the trucks & trailers, layoff the drivers, and hopefully reduce your costs enough to sell tractors cheaper than the other guys.

Try to make your money on what you do best, and let the haulers try to make a buck doing what they do best.

Let buyers know that a bottom-dollar deal includes NO transport for any reason. Give them a list of the local haulers, if the buyers don't have a way to haul themselves.

That would be simple to sell the entire fleet of trucks and trailers and rollback, but I think there is an expectation that a volume dealer or any dealer can and will offer pickup and delivery. Local haulers are easily double what we charge, which makes it tough for customers.

I'm not so much looking for solutions that work for us as we already sell a ton of tractors and are profitable. It works now. I'm looking to lessen the customers disappointment when they call and need a tractor moved. Even though our policy is clear and given to them in writing when they purchase, nobody likes to pay for freight/delivery/pickup. People see it as a waste and sometimes insist that it should be free. A lot of us guys/gals have trailers and it isn't an issue, but a lot of folks have no trailer and maybe no pickup.

I am amazed at how many people buy extended warranties on cars or other big ticket items. They prefer to pay up front and minimize or spread the risks. Would folks feel the same way about a VIP service or transportation program?

 

[orezok]

This is a conundrum. First you tell the customer that this is the greatest tractor ever made on earth and is very reliable to sell it to him. The you turn around and tell him, well WHEN it breaks down, I have to charge you extra.

I don't know how to resolve this conflicting situation.

 

[DavesTractor]

This is a conundrum. First you tell the customer that this is the greatest tractor ever made on earth and is very reliable to sell it to him. The you turn around and tell him, well WHEN it breaks down, I have to charge you extra.

I don't know how to resolve this conflicting situation.

To which we respond, "it's not an extra charge, just bring it in and we will fix it free of charge". To which they respond, "we have no trailer". To which we respond "we can haul it for a minimal" charge. To which they respond...."what good is my warranty," and it goes downhill from there...

I'm thinking if we offer transportation coverage at the time of sale and folks decline it, at least that reinforces that transportation is not included.

Just for the record, folks that are patient can often get a free or really cheap haul because if we have a truck in the area and it has space, it costs us very little to pick up a tractor that is basically on our route.

 

[MinnesotaEric]

As a dealer, we clearly tell folks that the factory warranty does not include hauling the tractor nor onsite service calls. It covers parts and labor, but the customer must get the tractor to our shop, or pay us to haul it. If you think about it, most items you purchase are this way. But this causes customer frustration on a regular basis.

Let's first agree that nothing is free. It can be included in the purchase price or offered as an add-on, but if a dealer is hauling tractors for "free", someone has paid for it - and that someone is the end user whether you want to admit it or not.

If we wanted to offer "free" hauling for 3 years or 5 years, we could try to calculate the cost and add the cost to the price. But then if we found ourselves to be $500-$1500 higher than other dealers we would lose the sale. I can't see this working, nor is it fair to the guy with a trailer that plans to haul it himself.

We could offer an optional yearly care package for "free" hauling and maybe even "free" regular services. The actual cost would have to factor in customer proximity to the dealership, average hours of use, model, etc. It would need to be a discount off full rate if customers were basically paying in advance, yet the dealer would need to profit as well. It could be a little tricky to figure costs, but that could be done. Would folks be interested in this?

I'm just looking for some discussion on this, thanks.

Sell the free hauling like an insurance product by looking at past sales, determining the mean average service calls, the cost of those service calls, the total number of miles driven, the average cost per mile (total equipment cost, expected fuel cost, expected insurance cost, employee cost to drive, divided by expected service life gives a mean use cost multiplied by the number of miles or hours to cover the service calls given your operating costs per contract) in a given time period, and aggregate a risk pool. Multiply the mean average by the profit margin you hope to earn, and that number becomes the ask on your sales price while the mean average becomes your cost. At the end of the day: somebody will cost you money but most will earn your shop money. Best of all, the customer gives you money upfront for the service, which means that you can assign a portion of that money in an interest bearing account and earn even more.

 

[Tractorrr]

I think I would just want to pay for the hauling as needed rather than paying for it up front and not really knowing if I was going to use it or not. People might not want to pay that added cost up front because some people decide to change tractors after a year, wind up moving and selling the tractor, find someone else to service it or do the service themselves, or eventually buy a trailer to haul the tractor themselves

Maybe, the price of transportation is just one of the risks you take when you buy a tractor and don't have a trailer to haul it in to get it fixed if there are issues.

What I think would be pretty cool though is to be able to watch and learn from the mechanics while they are working on the tractor. You could learn more about your tractor, how to properly service it, and actually see the work being done. I might be willing to pay a little extra for that.

 

[Capricious]

'..I am amazed at how many people buy extended warranties on cars or other big ticket items..."


I agree many buy, but i don't. Never have. Always figured that the money i saved by never buying an extended warranty would more than offset any losses not covered by the standard warranty. Was first offered an extended warranty in 1988, and i think i am ahead of the game although I sure don't have the numbers on paper.

But extended warranties are major profit generators for those that sell stuff.

When I was looking at buying a tractor, what I could haul with my existing truck was a major factor, but then i really did not have the option of buying something I could not haul, as the land where the tractor will be worked is 200 miles from home, there is no way to safety store the tractor on-site, and I did not want to spend the limited amount of time that I can spend on-site, doing main. and repairs that i could do in odd free moments at home. So my situation is a bit different than most.





"..To which we respond, "it's not an extra charge, just bring it in and we will fix it free of charge". To which they respond, "we have no trailer". To which we respond "we can haul it for a minimal" charge. To which they respond...."what good is my warranty," and it goes downhill from there..."

I think this is a communication issue. It has to be explicitedly stated @ the time of sale who is responsible for what.





"..It works now..."

When you mentioned "..stop the bleeding.." I assumed there was a income statement problem.

 

[newbury]

<snip>We even have a loaner trailer. The loader trailer helps as it at least allows a guy with a pickup to haul his own, although not 1 in 20 customers take us up on the offer. You see, they also see their time as valuable.

If we picked up and delivered for each service and warranty for 5 years and could do that for $500-$1500 at cost, I'd be thrilled. My average customer is about 35 miles away as I sell in a 5 county area, and it is a huge territory. 70 miles round trip for pickup and then another 70 miles to deliver back so 140 miles. 20 gallons of diesel if the driver is being gentle with the big pedal. $80 for that. 4 hours minimum time for the driver to do the pickup and deliveries, $120 for that if you just figure hourly and workers comp, etc. Wear and tear on a $80k truck, insurance for the same truck, etc., for 140 miles cost $0.50/mile (wild guess on that). So a bare cost of $270 if there are no issues, the truck does not get stopped in road construction, the customer does not want to chat for an hour, the scales don't want to pull you around for an inspection, etc. So with zero profit we are at nearly $300.<snip>

Do you charge for the loaner trailer?
I would imagine if you didn't people would be borrowing it all the time. But if you only loaned it for people hauling a tractor back and forth for repair and the charge was minimal more people might use it.

If the two trips took 4 hours out of my workweek BEFORE I retired that would have been about $300 of my time plus vehicle expenses. I don't know what the average wage is of the owners that you sell tractors to but I bet it's about the same or more.

You should post in big letters what you charge and why you charge it and make sure everybody you sell a tractor to understands the charges. Perhaps work up a general "zone chart" showing average costs for 20 miles, 40 mile, 60 miles etc. And also provide the loaner trailer at low cost, I could envision many people who.

It's "unfair" for the John Thomas's who live a few miles away to have to pay a built in cost for free transportation based on an average of a 35 mile trip. As it is unfair for the Newbury's (people like me) who live 50 miles from the dealer to only have to pay a built in cost for free transportation based on an average of a 35 mile trip.

If I had known it was going to cost me $300 to get the tractor to a dealer after I retired I would have bought a trailer. Oh wait, I did And when I was working I paid them to haul it.

 

[KiotiKowboy]

Toyota offered a plan that we actually bought. We paid $4K up-front for a broad coverage 5 year warranty on a new Prius. Normally I scoff at these things but ... IF the warranty is not used, you get a full refund at the end of the term.

We bought this as a safety net and had no plans to ever use it except in the event of a significant repair.