A fax to my dealer

OkeeDon · Jul 28, 2003

Now here comes the point,I can not figure out about them........everything that is delivered is paid for in full before it is unloaded,everything cars,trucks,tractors,equipment,parts,etc........So if their money is tied up,why not move the inventory? 

Like your example, everything I stocked was paid for - no floor plan. When I sold something, however, I had to replace it. After paying for the replacement at dealer cost, what was left had to cover the overhead - salaries, utilities, rent, etc. If I discounted something, I had to sell more things to cover the cost. That meant more costs - additional assembly, delivery, etc., additional space to keep the extra inventory, more hand-holding with more customers. The only way to cover those additional costs was to sell even more stuff. The problem is, there is such a thing as market saturation - there may only be so many customers in a given area willing and able to buy what is being sold. The other problem is diminishing returns. A dealer may end up just churning money and not making any extra for all the extra work.

I understand the comments about people wanting to keep as much of their money as possible, but as a dealer, I had a huge investment in expertise, facilities, tools, training, etc. From my perspective, why should I give away money that is needed to keep up the high standard of service?

I have a basically giving nature; my wife says I'm a soft touch. The hardest lesson I had to learn as a business owner was, "You're in business to make money, not friends."

I was willing to do whatever it took to get the green stuff from my customer's pocket to mine...stay open extra hours, do free troubleshooting, make sure the customer was satisfied in all respects. But, make no mistake, the green stuff did change hands.

Inspector507 · Jul 28, 2003

Henro,
I've hesitated posting a reply........but for those who know me, knows I can't hold out forever /forums/images/graemlins/grin.gif.
I wrote a similar (maybe even flaming) letter to my car dealer, only difference was it had to due with service problems, calling me 3 times to pick up my car only to find it was not finished either of the 3 times. I CC'd the manufacturers Rep when I wrote it. I got satisfaction when it was finally returned to me repaired correctly, or so I thought.
Now here comes the kicker to this whole thing. I needed a new truck 2 years later, after my Bro started working at that dealership (we have different last names....Half Bro). As soon as the "manager" was given the paperwork to approve the new sale, I was asked to leave the premises. They had my name in the computer somewhere and was more or less "black balled". Took my Bro 2 weeks to get that deal approved. They said if I paid sticker I could buy anything I wanted. I was trying to get it on one of his "D" plans. That was 10 years ago and he still gets grief when they see me pull in, even though in 10 years I have bought 8 more trucks there and he is the Sales Director now. Granted, I get them at a good price, but they do remember when you write a letter.

Jerry

Woodbeef · Jul 28, 2003

Well Henro ol chap,I sure do wish you luck with your low price always wins stance!!

I was not going to bring this up,but I guess now I will. When I was in highschool my dad bought a brand new 3/4 ton 4x4 pickup. Back then they were not as hot of a seller as they are today,so it had to be ordered. We had a dealer at the end of the street we had dealt with since way before my time,but the know it all teenager I was,said hey lets shop around for price. Dad conceeded to my wishes. So for the next month we toured S.E/S.C.Michigan. As we got closer to Motown the prices were cheaper than further out in the country(until this time local dealer was lowest price) Finally the lowest price(beat local dealer by about 7%)was about 20 miles away to the N.E. of us. I pushed for saving the $350.00,dad said no. For that little of a difference we'd stay home and do our business he said. So two years later I bought a new truck. I went for the lowest price,saved $400.00 over local guy who's son was now running the place. Well about 6 months later I had a few problems with the truck and it needed work. So I took it back to where I bought it. Well they kept it for almost two weeks before I got it back,and had no loaners either. Seems that they did not offer those,but if I wanted to I was more than welcome to rent a car from them. Man I'll tell you I about never lived that down with dad. The local dealer always had loaners,cars and trucks no matter how long you needed them. He really rubbed it in that yep,I sure saved a bunch of money on my truck,but had to borrow his while mine was being fixed!! It's what you get besides the actual item you buy that counts in my book!!

Spencer · Jul 29, 2003

( I was assuming that because he matched the price on the brush hog I ordered [dropped his price $75 to get the sale] that he had room to work in.
)

Henro, hindsight is 20/20, and by know I am sure you are wishing you had just bit the bullet and ordered all the implements you wanted at the same time you bought the tractor. As most of us know, the dealers always seem to be able to give us better prices on the implements when they are on the same invoice as the tractor. It is also nice to be able add the price of the implements in with the tractor financing.

( When it is all over at the end of the day, and he is counting his money, that is $100 extra he could have in his pocket but doesn't... we are talking for an ordered item , not one he has in stock and if he sold cheaper would lose the opportunity to sell at a higher price to someone who happened to walk in. )

I had purchased a 3-point cement mixer from my dealer. It didn't really work well on my tractor because I couldn't get it up high enough to dump out all the contents. On top of that the second time I went to use it a bolt holding the flywheel on broke off. It took some doing but I finally talked my dealer into taking it back. He was nice enough to ask me if I wanted a refund or if store credit would be fine. I was very appreciative of him taking it back so I told him store credit would work for me. I wanted to get a Bush Hog LLR 72" landscape rake with gauge wheels. He did not have any in stock, he could order me one right away but I would have to pay the freight. He said that they were going to get a big shipment in about 6 to 8 weeks and if I could wait that long I would not have to pay freight. It seems that twice a year they get big shipments in of Bush Hog equipment. I am assuming that they either get quite a deal on freight when they buy a whole semi-trailer load or maybe they even get free freight. Not only with the landscape rake, but when I wanted a 18" auger for my Bush Hog PHD he was very reluctant to make a special order for it. So I waited until the shipment came in and then went and picked up my new landscape rake. The price I got on the Bush Hog 72" LLR was $530 plus $205 for the gauge wheels. They credited me the $700 that I had paid for the cement mixer so I only had to pay the $35 difference plus $2.10 tax on the difference. Was that a great price on the rake? Probably not, especially after seeing the quotes you got. I did check with another dealer who also did not have one in stock and he was only a little less. I was already happy with my dealer before he took back the mixer. He sure did go the extra mile for me and I won't forget that.

If you haven't already, I would not send the fax. You sound like you went to them in the first place because they were the better dealership. You will be needing parts and services in the future. If you send the fax now, every time you go in for service you will be wondering if they are screwing you because they are holding a grudge. I would continue to get quotes from them on any implements you want in the future. If the guy down the street can sell it to you for a cheaper price then go ahead and buy it. Your dealer can't hold it against you if you gave him an opportunity to get your business and he refused to beat or match the price. You may also find yourself with an implement or a tractor that doesn't suit your needs in the future. It would be nice to have a relationship like I have with my dealer and be able work out some sort of trade or return.

By the way, I use to work for a lawn and garden equipment dealer. There is a huge difference between the mark-up of the equipment and the parts and accessories. A new riding mower would have no more than 18% markup and it was generally much less. All parts and accessories were around 40%. The dealership did not, and could not survive on just selling the equipment. They made all their money on the parts, service, and accessories.

kemartin3 · Jul 29, 2003

Bill,

You said
 
"I am also a bit idealistic as a natural trait, and think it would be nice if people could work together and so on, in a win-win way."
 

PLEASE, don't lose your idealism. Pragmatism is a nasty pill that we all learn to swallow to function is this world.

Kevin

Henro · Jul 29, 2003

Woodbeef,

I guess what I meant was "All things being equal" price would rule. For example, I could have bought my tractors from an out of state dealership and maybe saved a couple thousand dollars when it was all over...but bought local for reasons similar to what you stated. Glad you posted that...may help other's who read this thread.

Spencer, I did not and will not send that fax...if I buy that landscape rake I will let my dealer know in a soft and friendly manner that I did and was sorry I could not give the business to him in that case...

kemartin3, This old dog probably won't change much...just the way we old dogs are... /forums/images/graemlins/grin.gif We just bark a little now and then... /forums/images/graemlins/blush.gif