jd dealer markup?

[MinnesotaEric]

Answer to question no 2. Yes or no. Depends on the value as Coyote already stated. When I was looking for a tractor, I went to Kubota where an L 3400 had a $19,300 dollar price tag. I'm looking at this thing and I'm saying "no way" is this worth this much. I asked if he could sell it to me for 17.5 K. He turned away from me while laughing and said "its here when you become a real buyer"

Answer to question no. 1. This is not how to grow a business and even if he called me the next day to accept my offer, I would not have bought from this salesman. Whoever he was, he was not an asset to this business. What he did not realize was that "I WAS A BUYER". So you grow a business by being polite. helpful, accommodating, honest and respectful with solid service. Some of these things have little to do with pricing but have everything to do with "sales".

Now , lets play this with your scenario: Question no 1: He doesn't budge from over 19K. Nor does he accept my offer to the point of disdain. Would you care to "negotiate with this guy?

Question no 2. he accepts the offer of 17.5K. I already accepted this price because it matched my perceived value. I become a contented purchaser. Would you attempt to beat him down further?

I'm willing to pay more for salesmanship (cf. the link I dropped earlier in this thread about the lack of professionalism in tractor sales, and my thesis as to where the problem resides). To your example of a bad salesman, a good salesperson would not have thrown out a remark that burned your bridge and pissed you off, but rather he or she would have recognized their own need to educate you, the customer, about the true cost and true value of their product. The salesperson could have done this by auguring in about build quality, or features, serviceability, availability of spare parts, or whatever. If they reached an impasse, then they could ask you what it would take to get your business, and then worked on their own value add that is in their power to bring to the bargaining table. Also they can spell out the clear difference between what they are asking you what you are bidding and then frame that difference in terms of the overall cost of the machine or package, and then ask if, at the end of the day, what you're really looking for isn't necessarily the cheapest machine, but the machine that gives you the best value? At which time you'll frame your expectations for the salesperson right there for him or her.

I gave my sales people the autonomy to make their own deals so long as we made money.

FWIW, I have no idea what Coyote said as I have him on ignore since he made it clear to me that he cannot discuss anything without making personal attacks. Life is too short to talk to negative people.

 

[Threepoint]

This has been an interesting read as it directly applies to my situation of looking to buy an svl75. I agree with comments made by ETO and CM ... all while weeding out the sarcasm. As a SBO myself, I know first hand about people wanting to lowball negotiate as much as possible and that is fine because I'm the same way. I love to negotiate and while building my house, I save over 25k just by doing this. However, I did learn something that I never considered or heard of before. One contractor accused me of being disrespectful and didn't value him because I asked if he gave discounts for either cash or volume. He said that I should either accept his price without question or move on to someone else. I was never disrespectful but he just took it that way - have since learned that he pays whatever asking price is for car, truck, motorcycle, as he was raised that way (friend of a friend that knows his father).

Anyway, back to the point. Knowledge is power and can be used in proper ways to level the field a bit. I always do research before making a large purchase to make sure that it is equitable. If a business continually sells at dealer price knowing they don't get service/parts afterwards then that is not a good decision on their part. However, if a business makes it up on volume and that is their business model then it is ok. Story - I went to buy an RV and our local dealer who is known to have crazy high prices did have super high price. I shopped around and found someone else that was $15k cheaper. Dealer2 makes less profit but he sells hundreds and hundreds of units a year so volume is king.

There comes a point when the person has to know what their value vs $$ is for the piece of equipment and make a decision. If the OP feels the value is $20k but the dealer (for whatever reason) will only come down to $24k then he has a decision to make ... either pony up, walk away, go elsewhere, buy used, etc. There has to be some give/take on both sides.

Thanks for the time and appreciate all the info I've learned on here.

Some of us enjoy negotiating and some of us don't. Some are good at it, some aren't. I've observed over the years that those who aren't tend to resent those who are. Those who are should be grateful for those who aren't, because they'll keep RV Dealer No. 1 in business to pay his staff and feed his kids. Those who are will keep Dealer No. 2 in business to pay his staff and feed his kids. Each to his own. I prefer to be the guy who buys from Dealer No. 2. It's curious to me that in a free market economy, based on capitalistic principals and the law of supply and demand, some of us pass moral judgment on those who negotiate for the best deal. I said best deal, which is not always the best price, for reasons ably discussed in this thread. A contractor who considers a request for a cash or volume discount as disrespectful is taking himself way too seriously, and if he himself never makes such a request when he is the one shopping for goods or services, then he's leaving value on the table at the expense of those who depend on him as the breadwinner. The saying "You get what you pay for" is another curiosity to me, and all of us use it from time to time. In a free market economy where both the seller and the buyer are informed and free to say aye or nay to the deal, it is theoretically always true. But at the same time we now it's not really. A buyer who paid $15K more to Dealer No. 1 for the same RV that Buzzng bought from Dealer No. 2 got what he paid for. But he sure didn't get more value, say what you will about service after the sale, and the satisfaction of knowing he improved Dealer No. 1's bottom line. Yep, I've bought two RVs, and I know what Buzzng describes indeed happens. If a buyer is content to pay $2000 more for a $30,000 tractor because he didn't have to negotiate, he thinks he'll get better follow-up service, and he knows the dealer can pay his secretary who's son has leukemia (a scenario posed by one of the members), then good for him. But suggesting he's made the world a better place is a stretch. And casting smug personal insults at the folks who do enjoy getting a better "deal" by negotiating is silly.

 

[ljohnson778]

Right, so all you need do is write X up at X price and you get another sale! As part of the due-diligence you did before your purchase you puzzled out the margins you need in each department at given points of volume in order to eat, pay bills, throw the lights on every morning and smile all day. Anything above those margins is gravy. So if a cat rolls in wanting X ('cause he knows all about it through the internet and would order it through Amazon if he or she could) and wants to purchase something at or above the margin you need, you smile and write the deal up. Shoot, get the client to finance and catch an origination fee on top of it too. In fact, get the client on board with a master leasing product so you catch origination fees and the client has the freedom to swap in and out of equipment at his or her leisure without need for getting approved every time they turn around. Value add, value add.

You sure did add a lot to my post that I didn't say... Thanks, but I'll speak for myself.

What I said was, I am not the cheapest, because I won't cut corners when it comes to employees or customer service. That costs money, simple. It's a free market, customers are free to shop wherever they see fit. I'll never turn away warranty or service work because a customer bought at a competitor, I feel that would be wrong. I am in business to make a profit, but, as I said, I'll do it the right way or not at all.

 

[buickanddeere]

I agree with Coyote. Maybe Farmers should drop the price they are asking for corn ?

 

[MinnesotaEric]

You sure did add a lot to my post that I didn't say... Thanks, but I'll speak for myself.

What I said was, I am not the cheapest, because I won't cut corners when it comes to employees or customer service. That costs money, simple. It's a free market, customers are free to shop wherever they see fit. I'll never turn away warranty or service work because a customer bought at a competitor, I feel that would be wrong. I am in business to make a profit, but, as I said, I'll do it the right way or not at all.

Who claims that least-expensive, or best-value, or happy-cutomer-got-a-swell-deal means cutting corners? What corners in sales must be cut in order to write up a sale that meets a department's margin requirements? Unpack the corners that would be cut if you wrote up a sale at a lower price than you hoped to sell?

The dealer agreements you have with your OEMs should prevent you from turning away warrantee claims on equipment sold elsewhere, so that isn't a corner that would be cut. In fact, selling more equipment has the potential to increase volume in your service department, so that doesn't look like a corner that would be cut.

You could fail to deliver a machine with a topped off fuel tank. Do you do that anyway?

Unpack what corners would be cut by negotiating?

 

[ljohnson778]

Who claims that least-expensive, or best-value, or happy-cutomer-got-a-swell-deal means cutting corners? What corners in sales must be cut in order to write up a sale that meets a department's margin requirements? Unpack the corners that would be cut if you wrote up a sale at a lower price than you hoped to sell? The dealer agreements you have with your OEMs should prevent you from turning away warrantee claims on equipment sold elsewhere, so that isn't a corner that would be cut. In fact, selling more equipment has the potential to increase volume in your service department, so that doesn't look like a corner that would be cut. You could fail to deliver a machine with a topped off fuel tank. Do you do that anyway? Unpack what corners would be cut by negotiating?

You add your own spin to every reply. Truth can't compete with rhetoric. I'm done with this thread. I'll continue to do right by my customers. You do whatever compels you.

 

[MinnesotaEric]

You add your own spin to every reply. Truth can't compete with rhetoric. I'm done with this thread. I'll continue to do right by my customers. You do whatever compels you.

I wish your venture success.

 

[paulfun9]

Negotiate and comparison shop whenever possible!

If I took the advice here I would have paid more for my DK40 and loader than I did for the tractor/loader/backhoe extra remote and first service combined.

Those of you who want to pay the asking price and overpay feel free! I will always compare prices and look for the best deal I can find.

To address the no follow up sales with those of us who look for the best price, guess what I have been back to the dealer to purchase a few things since my initial purchase and will be back again tomorrow for some other things that I could get other places a little cheeper but as I said to the dealer when I first started negotiating that I wanted to give him a chance to earn my repeated business and that is what he gets. No I wont or cant afford to buy everything from him but what I can I will.

Also if you consider the fact that I have sent people to him who are looking for new machines with nothing more than I am pleased with his service and that he has treated me good and provided an excellent machine at a fair price ( I don't give specifics on what I paid) you must consider that as follow up business as well.

 

[Garandman]

...
What I said was, I am not the cheapest, because I won't cut corners when it comes to employees or customer service. That costs money, simple. It's a free market, customers are free to shop wherever they see fit. I'll never turn away warranty or service work because a customer bought at a competitor, I feel that would be wrong. I am in business to make a profit, but, as I said, I'll do it the right way or not at all.

I read about an auto dealer years ago who won many customer service awards. When they asked him how he did it, he said "I don't do low-bidder business. If someone is shopping around three to five dealers for another $100 off, you would think that they would leave a happy customer and would not expect a high level of service. But in fact we find those people are never happy with the deal, and are the first ones to bad mouth you."

I run a dealer of a different sort, and when we get people shopping around, we ask the question, "Are you just looking for the lowest price?" If they say yes, we just tell them honestly we are not interested in their business. That doesn't mean we try to be the highest: we've just learned that those kind of customers did not help us grow.

The RV industry isn't really a good example as they tend to have inflated MSRP's and then offer big discounts to close deals. Industrial equipment tends to have more realistic pricing and discounts of over 10% are rare. YMMV.

 

[Poopdeck Pappy]

Negotiate and comparison shop whenever possible!

If I took the advice here I would have paid more for my DK40 and loader than I did for the tractor/loader/backhoe extra remote and first service combined.

Those of you who want to pay the asking price and overpay feel free! I will always compare prices and look for the best deal I can find.

Nobody on this thread is advocating being stupid and just blindly paying whatever price is quoted.

I happen to think there's a middle ground between bending over and bringing your own jar of vaseline vs. thinking you have to shake all the loose change out of the seller's pockets before you make a deal.