As a former retailer of fairly big ticket items, I started to compose a response to you at least 3 times, but couldn't find a way to say what I wanted to say without getting long-winded or sounding pompous. So I back-buttoned each time. Doesn't matter now...you figured out what I wanted to say. Good man, you.
A fax to my dealer
- Thread starter Henro
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gordon
Veteran Member
There is one thing that comes to light right off the bat. The manager is just a flunkie. He has to post profit numbers that the boss wants to see to keep his job and make his bonus checks. Reguardless of how much you have spent in the past year he doesnt care, he just wants you to spend more. --Not a smart long term manager--.
So with that being the situation I would ask to talk face to face with the owner and tell him what your feelings are. Afterall he is the one that dictates what happens at the dealership that you've dropped a bunch of cash in the past year.
Myself I like talking with a person face to face. Much easier than typing and body language plays a big part in what direction the conversation might take. When a fax or a letter is sent you really have no idea who ends up reading if, anyone at all.
Are you asking to much to get a decent price on stuff that you buy from this dealer ----heck no!
As someone else said---The printed word stays around for a long time--
my two cents
Gordon
So with that being the situation I would ask to talk face to face with the owner and tell him what your feelings are. Afterall he is the one that dictates what happens at the dealership that you've dropped a bunch of cash in the past year.
Myself I like talking with a person face to face. Much easier than typing and body language plays a big part in what direction the conversation might take. When a fax or a letter is sent you really have no idea who ends up reading if, anyone at all.
Are you asking to much to get a decent price on stuff that you buy from this dealer ----heck no!
As someone else said---The printed word stays around for a long time--
my two cents
Gordon
rambler
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An organic farmer with 100 acres needs to make $200 an acre to make a living, & that's pretty tight living.
A regular farmer with 1000 acres needs to net 20 an acre or better.
You may be comparing apples to oranges here. Your favorate dealer might be at his price point to be successful. After all, if _you_ get the rake for x dollars, other people will come and ask for the same deal.
In the above example, sure the organic farmer is better off getting $20 for an acre of produce than to get nothing: but you are totally upsetting his price stucture to do so to him. He is better off writing you off, and concentrating on ways to continue to make $200 or more per acre - no matter how loyal you are or how easy the sale is.
Word gets out, & you have bankrupted the organic farmer with your kindess of doing cut-throat business with him....
A big stretch, but food for thought.
Each transaction is a new one. Dealer needs to look at it as such anyhow.
--->Paul
A regular farmer with 1000 acres needs to net 20 an acre or better.
You may be comparing apples to oranges here. Your favorate dealer might be at his price point to be successful. After all, if _you_ get the rake for x dollars, other people will come and ask for the same deal.
In the above example, sure the organic farmer is better off getting $20 for an acre of produce than to get nothing: but you are totally upsetting his price stucture to do so to him. He is better off writing you off, and concentrating on ways to continue to make $200 or more per acre - no matter how loyal you are or how easy the sale is.
Word gets out, & you have bankrupted the organic farmer with your kindess of doing cut-throat business with him....
A big stretch, but food for thought.
Each transaction is a new one. Dealer needs to look at it as such anyhow.
--->Paul
755inNY
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Bill (Henro),
I'll throw my two cents in as your latest post states you are looking for advice.
Let me take the liberty of summarizing your "beef" with your tractor dealer. I apologize if I did not get this right from reading your fax.
<font color="red"> You've done a lot of buisine$$ with this dealer and you expect a competitive price on future business in return for being a loyal customer. You would prefer to continue giving this dealer all of your business in the future to help keep his business healthy as opposed to going somewhere else.
</font>
First, you got a competitive quote from your tractor dealer. It just wasn't the lowest quote. If it is really the lowest price you are looking for, then you should state it as such.
Second, your goal of developing a relationship with a single dealer is a good one provided the dealer has the same attitude. Let's face it, some dealers just don't share that same approach to doing business. You should determine if this dealer shares your customer/dealer expectations.
Third, assuming your dealer values you as a long term customer, he still may have given you the best price he feels he can give. Forget the notion of it's better to make a little profit than none at all. If the owner has his business set up on a set, minimum profit margin, accept it. Don't get mad at it.
Fourth, you may need to accept the fact that you will have a tractor dealer that you develop a long term relationship with and an implement dealer that you develop a long term relationship with if you want the lowest price for each. Do you really think your tractor dealer is going to go belly up because you don't buy implements from him?
Finally, I see no reason not to send the letter (not fax) directly to the owner BUT......
-Shorten it by at least half
-Work to take some of the emotion and hurt out of it
-Do not make it a complaint letter
-Make it a business letter stating your position and desires for the future. Do not tell him how he should be running his business. You value his dealership for your tractor equipment and will continue to use him for parts, service and new tractor needs but he is not the dealer for your implement needs due to his higher prices. If his prices were lower you would prefer to use him for both but as it stands that is not the case.
You are going to have to let the owner decide on what is important to him in the business relationship. You can't brow beat him into it. He may decide that supplying your tractor needs is enough and you will have the healthy relationship you are looking for.
Jeff
I'll throw my two cents in as your latest post states you are looking for advice.
Let me take the liberty of summarizing your "beef" with your tractor dealer. I apologize if I did not get this right from reading your fax.
<font color="red"> You've done a lot of buisine$$ with this dealer and you expect a competitive price on future business in return for being a loyal customer. You would prefer to continue giving this dealer all of your business in the future to help keep his business healthy as opposed to going somewhere else.
</font>
First, you got a competitive quote from your tractor dealer. It just wasn't the lowest quote. If it is really the lowest price you are looking for, then you should state it as such.
Second, your goal of developing a relationship with a single dealer is a good one provided the dealer has the same attitude. Let's face it, some dealers just don't share that same approach to doing business. You should determine if this dealer shares your customer/dealer expectations.
Third, assuming your dealer values you as a long term customer, he still may have given you the best price he feels he can give. Forget the notion of it's better to make a little profit than none at all. If the owner has his business set up on a set, minimum profit margin, accept it. Don't get mad at it.
Fourth, you may need to accept the fact that you will have a tractor dealer that you develop a long term relationship with and an implement dealer that you develop a long term relationship with if you want the lowest price for each. Do you really think your tractor dealer is going to go belly up because you don't buy implements from him?
Finally, I see no reason not to send the letter (not fax) directly to the owner BUT......
-Shorten it by at least half
-Work to take some of the emotion and hurt out of it
-Do not make it a complaint letter
-Make it a business letter stating your position and desires for the future. Do not tell him how he should be running his business. You value his dealership for your tractor equipment and will continue to use him for parts, service and new tractor needs but he is not the dealer for your implement needs due to his higher prices. If his prices were lower you would prefer to use him for both but as it stands that is not the case.
You are going to have to let the owner decide on what is important to him in the business relationship. You can't brow beat him into it. He may decide that supplying your tractor needs is enough and you will have the healthy relationship you are looking for.
Jeff
OP
Henro
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Jeff,
Thanks for taking the time to post your thougths.
I have sort of come to the conclusion that the issue is that I really believe in the economic theory of maximizing profits...and I hate to see someone I like miss a sale that would add something to his profit margin.
Anyway, after thinking about it, I won't waste much more of my time with this issue. I will stop at the dealer's when I am in the neighborhood and say hello as I always do. And I am going to ask the reasoning behind thier actions that resulted in my giving my money to the other dealer.
I don't think you are right about thier bid being competetive. They know the multiplier the other guy is using. They chose to use a higher multiplier that would result in them offering a non-competetive quote. I told them in advance I was going to buy from the person that offered the lowest price.
The week before they chose to sell me a Woods BB60CW rotary cutter at the same price the other dealer offered. AFter they quoted higher initially.
Anyway, I am not going to beg them to take my money. I'm going to let them know they missed a sale, ask nicely if this makes sense to them...and let it go at that.
The subject does still interest me though. Because in my gut I truly believe that a business should strive to maximize profit.
Like you say one sale to one person means little. Even the loss of possible future sales to others that original guy might refer to the dealer don't mean too much. But if enough people end up at the competition it can't help...
So I will reward the lower price dealer as I should have in the first place. Actually I feel kind of stupid for even taking the time to care about the dealer losing a sale. Can you imagine that? A concerned customer? Surprised me too...
In the end it probably makes little difference. Other dealers can service tractors too, should the need arise.
No big deal... /forums/images/graemlins/smile.gif
Thanks for taking the time to post your thougths.
I have sort of come to the conclusion that the issue is that I really believe in the economic theory of maximizing profits...and I hate to see someone I like miss a sale that would add something to his profit margin.
Anyway, after thinking about it, I won't waste much more of my time with this issue. I will stop at the dealer's when I am in the neighborhood and say hello as I always do. And I am going to ask the reasoning behind thier actions that resulted in my giving my money to the other dealer.
I don't think you are right about thier bid being competetive. They know the multiplier the other guy is using. They chose to use a higher multiplier that would result in them offering a non-competetive quote. I told them in advance I was going to buy from the person that offered the lowest price.
The week before they chose to sell me a Woods BB60CW rotary cutter at the same price the other dealer offered. AFter they quoted higher initially.
Anyway, I am not going to beg them to take my money. I'm going to let them know they missed a sale, ask nicely if this makes sense to them...and let it go at that.
The subject does still interest me though. Because in my gut I truly believe that a business should strive to maximize profit.
Like you say one sale to one person means little. Even the loss of possible future sales to others that original guy might refer to the dealer don't mean too much. But if enough people end up at the competition it can't help...
So I will reward the lower price dealer as I should have in the first place. Actually I feel kind of stupid for even taking the time to care about the dealer losing a sale. Can you imagine that? A concerned customer? Surprised me too...
In the end it probably makes little difference. Other dealers can service tractors too, should the need arise.
No big deal... /forums/images/graemlins/smile.gif
<font color="blue"> I truly believe that a business should strive to maximize profit </font>
There's more than one way to do that. When I first went in business, a successful, experienced businessman told me, "Work on your price point. Once you have worked out what you need to maximise your profit, do not deviate. No matter how badly you need some cash to pay the electric bill, do not cut your profit. The moment you do, someone else will hear about it and you will be known as a cut rate dealer. Once that happens, you can never lower your price enough to satisfy some customers."
I followed that advice. My competitor lowered his prices because that was the only way he could take business from me. When customers like you asked, with good intentions, why we did not match the price of a competitor, we explained that the competitor had cut his prices to beat us because he couldn't match our expertise or service. We refused to play the price war "game".
We also explained that as much as we wanted the customers business, we would earn it, not buy it. If all they wanted was a lower price, that was what the other dealer was for.
There's more than one way to do that. When I first went in business, a successful, experienced businessman told me, "Work on your price point. Once you have worked out what you need to maximise your profit, do not deviate. No matter how badly you need some cash to pay the electric bill, do not cut your profit. The moment you do, someone else will hear about it and you will be known as a cut rate dealer. Once that happens, you can never lower your price enough to satisfy some customers."
I followed that advice. My competitor lowered his prices because that was the only way he could take business from me. When customers like you asked, with good intentions, why we did not match the price of a competitor, we explained that the competitor had cut his prices to beat us because he couldn't match our expertise or service. We refused to play the price war "game".
We also explained that as much as we wanted the customers business, we would earn it, not buy it. If all they wanted was a lower price, that was what the other dealer was for.
HayDR
Veteran Member, Approved Advertiser
If a customer does not ask me for a lower price I wonder. Everyone likes to think that they are getting a special deal. Ask away but don't send the fax.
Don-
Good post. You're the type of businessman/dealer that I like to look for. Like everybody else, I like to get the cheapest price, but I also put some stock in the type of person I'm buying from. I particularly like the no-haggle approach to buying. When I bought my new tractor, I checked prices all over the internet and at other dealers and found out that the Kioti dealer I was buying from already had the cheapest prices (wonder if he did some research too). He did drop a few bucks on the implements and accessories that I bought from him at the time I purchased the tractor, and when my dad went to him to buy a bushhog, he gave him the same price he gave me when I bought my tractor (about $50 off normal pricing). However, if I hadn't bought my bushhog when I bought my tractor and went back a year later, I would have expected to pay full price, not $50 off, because his prices are what is prices are - and that's good enough for me.
Even with two or more dealers carrying the exact same equipment and charging different prices, it is impossible to know what their profit is, as they almost certainly have different expenses. I don't feel like a dealer owes it to me to match prices, but like Don said I like for them to earn my business by impressing me personally.
Good post. You're the type of businessman/dealer that I like to look for. Like everybody else, I like to get the cheapest price, but I also put some stock in the type of person I'm buying from. I particularly like the no-haggle approach to buying. When I bought my new tractor, I checked prices all over the internet and at other dealers and found out that the Kioti dealer I was buying from already had the cheapest prices (wonder if he did some research too). He did drop a few bucks on the implements and accessories that I bought from him at the time I purchased the tractor, and when my dad went to him to buy a bushhog, he gave him the same price he gave me when I bought my tractor (about $50 off normal pricing). However, if I hadn't bought my bushhog when I bought my tractor and went back a year later, I would have expected to pay full price, not $50 off, because his prices are what is prices are - and that's good enough for me.
Even with two or more dealers carrying the exact same equipment and charging different prices, it is impossible to know what their profit is, as they almost certainly have different expenses. I don't feel like a dealer owes it to me to match prices, but like Don said I like for them to earn my business by impressing me personally.
OP
Henro
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Hi Don,
I follow you completely. But you were selling two different things. You were selling your talents to produce a good product. The other guy was selling his talents...
Now I am assuming you and the other guy wern't selling the exact same washing machines at the time, but rather doing something that involved skills that could differ from one business man to another...if you both were selling Matag machines...that would be a different thing in my mind... /forums/images/graemlins/smile.gif More like two dealers selling the same brush hogs... /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
Like two roofers...they may use the same shingles, but that is just part of the whole project! Many people around here will not take the lowest bid, fearing shoddy workmanship.
Just for the sake of discussion, I think a dealer could give a good price to a guy like me and still hold his price up for the guy walking in off the street. All he would need to say something like:
"I'm giving you a special good customer discount. I'll give the same discount to anyone who buys two new tractors off of me in a 12 month period. Couldn't stay in business if I sold to everyone for this price..."
By doing this he would put an extra hundred bucks [or a little more?] in his pocket and not damage his price structure...or so it seems to me...
At this point it is intelectual curiosity driving my interest in this, if you know what I mean...
The other dealer will get the money IF I decide to buy a landscape rake... /forums/images/graemlins/smile.gif
I follow you completely. But you were selling two different things. You were selling your talents to produce a good product. The other guy was selling his talents...
Now I am assuming you and the other guy wern't selling the exact same washing machines at the time, but rather doing something that involved skills that could differ from one business man to another...if you both were selling Matag machines...that would be a different thing in my mind... /forums/images/graemlins/smile.gif More like two dealers selling the same brush hogs... /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
Like two roofers...they may use the same shingles, but that is just part of the whole project! Many people around here will not take the lowest bid, fearing shoddy workmanship.
Just for the sake of discussion, I think a dealer could give a good price to a guy like me and still hold his price up for the guy walking in off the street. All he would need to say something like:
"I'm giving you a special good customer discount. I'll give the same discount to anyone who buys two new tractors off of me in a 12 month period. Couldn't stay in business if I sold to everyone for this price..."
By doing this he would put an extra hundred bucks [or a little more?] in his pocket and not damage his price structure...or so it seems to me...
At this point it is intelectual curiosity driving my interest in this, if you know what I mean...
The other dealer will get the money IF I decide to buy a landscape rake... /forums/images/graemlins/smile.gif
OP
Henro
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Just thought of something else...
It is possible that my dealer, for whatever reason, has costs so much higher than the other guy that he can't compete.
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.
There is no way to know one way or the other.
If he does not sell for more than the cost of the item plus more, to cover his overhead costs, then he is losing money.
BUT... I keep coming back to the basic fact that while this is true in all cases...in any one specific case, if he loses a sale, and could have sold something for say $100 more than he paid, he actually lost that $100 in real terms...
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.
This reminds me of a friend I had way back when...his father had a used car dealership up in Mass...if they bought a car at auction for $2,000 [was a good bit of money back then] and thougth they could sell it for $2,600 [or more], they were losing money anytime the discussion of a sale for less than $2,600 came up. If they bought it in the morning and sold it in the evening...for $2,500...they lost a hundred bucks on the deal...matter of perspective! Maybe they did lose that $100...once that car was gone...it was not there to sell to the next guy anymore.
It is possible that my dealer, for whatever reason, has costs so much higher than the other guy that he can't compete.
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.
There is no way to know one way or the other.
If he does not sell for more than the cost of the item plus more, to cover his overhead costs, then he is losing money.
BUT... I keep coming back to the basic fact that while this is true in all cases...in any one specific case, if he loses a sale, and could have sold something for say $100 more than he paid, he actually lost that $100 in real terms...
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.
This reminds me of a friend I had way back when...his father had a used car dealership up in Mass...if they bought a car at auction for $2,000 [was a good bit of money back then] and thougth they could sell it for $2,600 [or more], they were losing money anytime the discussion of a sale for less than $2,600 came up. If they bought it in the morning and sold it in the evening...for $2,500...they lost a hundred bucks on the deal...matter of perspective! Maybe they did lose that $100...once that car was gone...it was not there to sell to the next guy anymore.
