A fax to my dealer

Woodbeef · Jul 28, 2003

Henro,

There are more things for the dealer to consider when selling you that piece of equipment than just making $100 more than they paid for it. Besides preping it,they also have to build a fixed cost into warranty work if the need arises. Your dealer might be hedging this where the other dealer is not. Plus does your dealer deliver for free,or a reduced cost vs the other dealer?

My closest dealer is a Dodge/MF/Landini/Hesston one. I've given them a chance on everyting I've bought since I've been here. Never have they even been close(I consider within 5% or so to be close enough)on anything. Often times they have had what I wanted sitting on the lot,and still been as much as 25% out. 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? Not very many locals buy there.....but people have been coming for generations to buy from up to 300+ miles away.

Henro · Jul 28, 2003

Woodbeef and all,

For the rest of my life I am going to revert to my former "true consumer" personalty. /forums/images/graemlins/cool.gif

In the end it is the easiest anyway.

With all the smoke and mirrors it is so hard to really evaluate the true situation.

I suffered a moment of weakness, but from here on out... PRICE RULES!

/forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif

PondKeeper · Jul 28, 2003

When I owned my restaurants I learned a great deal about customers, mine and my competitors; "they were all our customers". Some days mine and other days theirs.

I know big ticket finished products are different but in the end as an owner of any business you have a business plan and while there are deviations they can't be every day exceptions or you won't make it in the long run.

I knew it wasn't pratical to expect a customer to spend every dollar in his pocket at my restaurant so I never felt threatened when they were eating elsewhere. When I would encounter a customer while at another restaurant I would always greet them and carry on a conversation without the slightest feeling that they should be back at my place, I was glad that they were my customer too and I wanted them to feel it wasn't just their money I valued. I always felt I had to earn their loyalty with every visit. I tried to always convey that to my staff as well; but that is where things would get shakey.

As for my tractor purchases, I don't feel that a businessman is any different to any specific product, save for mass merchandisers, if I want to buy any item I would think the dealer would appreciate your giving him a chance to sell it to you. If you buy elsewhere I would hope as an owner it would only be because my price was wrong and not my attitude, service or staff, because if it was one of those reasons then I would be worried that you might not consider my business for your next purchase.

Last restaurant example; you can't imagine how many times a waitstaff person would tell a good customer, "no you can't have that item, it is only available after 3:00pm". The customer knowing they ordered it countless times before but from different employees. That wasn't my policy, but it was my problem, poor training of the new employee. A year from now maybe the new clerk at your dealer will be the same person you tell a friend he must see because he is great to work with. Experience is learned, most difficult task in employee development, only time can usher that along, especially if the owner is in another location.

This year my orange dealer gave me a price that was four hundred dollars higher on a trailer. There will come a day when I know I will have to tow my tractor in for a repair, I don't have any problem with him seeing "his" tractor on another dealers trailer. I gave him a chance, and in fact he was the favored seller, but I have a household to manage and kids in college too, and this tractor disease is darn expensive to keep treating. I have to mind my $'s too or I won't be able to keep consuming.

Mike

PondKeeper · Jul 28, 2003

Henro.

You are right there.

I saw your last post after my long winded one went up.

I feel price should be the rule along with good service, both at the time of the sale and during the life of the product. I will continue to buy for price and always keep all my dealer options open. Why burn any bridge.

We all seem to think that lower prices equate to lesser service. I don't think that is always true. I can't buy enough to insure a dealers security, if he isn't a good businessman he will disappear with or without my business.

Unless you are in a market with only one dealer every couple hundred miles. A nasty dealer or one with poor service just can't sell any item that much cheaper to make it worth giving him your money.

Mike

Richard · Jul 28, 2003

( When I would encounter a customer while at another restaurant )

Hmm.... and just what were YOU doing eating at a competitors?

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PondKeeper · Jul 28, 2003

Eh...Prospecting! while there I would buy drinks and sometimes even pick up an entire dinner check for my best coutomers, the PR went a long way.

Funny how some people think... if I bought them a drink at my restaurants they thought it was free or cost nothing but if I bought it at another restaurant while I was a customer too they thought I was really spending cash.

It all went into the marketing mix, I was successful and respected, that I'm proud of.

Mike

Slamfire · Jul 28, 2003

Every now and then the dealer or in this case the manager, needs a little wake up. My dad bought all his cars from the local Ford dealer. At the end of WWII when auto production resumed he was told that they needed to sell their allotment of new cars to returning veterans. Since dad had an essential job and a couple of kids during the war he didn't qualify. One veteran that did, sold his car to a local used car dealer and dad bought it at a substantial markup. The town was pretty small and everybody in town knew what happened. Twenty years, and several "Used" cars and trucks later, Dad bought a new Bronco from this dealer. The dealer had turned the business over to his son, who I went to school with. When the Bronco got center punched, dad got the replacement Bronco at this dealership. One day he took it in for service and mentioned that he was having trouble with tire wear on the front. The dealer tryed to sell him a bill of goods about what needed to be done, knowing full well that dad was a master mechanic at the local steel mill. Dad told him, "Do you want to wait another 20 years before you sell me another vehicle"? Well they wouldn't budge, and a week later Mom was driving a brand new Volkswagen. That was the end of trying to pull the wool over Dad's eyes, the Bronco was fixed "tout suite", as the French say.

icat · Jul 28, 2003

( Often times they have had what I wanted sitting on the lot,and still been as much as 25% out. 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? )

This dealer may be different, but the "paid for in full" doesn't always apply. I would venture to guess that most dealers have a floor plan with their bank. This allows them to hold inventory for a period of time and only pay for the complete cost once the item is sold. Of course, they pay interest for this - but many dealers would be unable to stock any big ticket items (tractors - not impliments) if they had to pay for them as soon as they arrived.

I don't know about Kubota, but GM has an in house floor plan as do Chrysler and Ford. I'd expect something similar every where else.

OkeeDon · Jul 28, 2003

But you were selling two different things. You were selling your talents to produce a good product. The other guy was selling his talents...


Bill, not in this case. When it came to the custom outdoor kitchens I fabricated, I had no competition - for a variety of reasons, no one else was willing to do what I did. And, I charged accordingly - full boat list prices for the inventory items and a good price for our custom work.

We also sold free-standing, upscale bbq grills - the lowest price grill I sold was $400, the typical grill was between $2K and $3K. I had a strong competitor in another independent grill store, and some upscale stores like Expo (the Home Depot upscale store) also sold these stainless steel beauties. We were all at a street price of about 10% off list price, except for the nearby competitor, who was 20 to 25% off list price. Frankly, I though he was nuts. He was leaving too much money on the table. He only had to go a little under the rest of us to beat our prices, and none of us (me and the more establishment stores) were willing to enter a price war. I have no idea why he sold so cheap, but there was no way on earth I was even going to try to match him. He could have all that business he wanted.

I will say that people who bought from him came to me for service, and obviously, they did not get the benefit of the courtesy calls and extra effort towards troubleshooting that my own customers got. They ended up paying what they would have paid me in the first place, because while fair, I charged for every minute of service. And, I made more money than the cheapie dealer, because I got the service profit.

He also sold some cheaper lines of grills, and I absolutely loved it when people bought those. In a year or two, I got their business - at my price - for the better quality grills, because I wouldn't have let them buy that junk in the first place, and they figured that out.

We had our standards - and our price - and we stuck to them. There are enough people who want that reliability who are willing to pay for it.

"When the boss is away, the employees will..." Every once in a while, someone would blarney one of my people into giving them a better price. Invariably, those same people became the most demanding and troublesome customers. Give them an inch...the lessons my people learned from that were worth the occasional problems.

A diiferent perspective on the situation from a former retailer...

Gary_in_Indiana · Jul 28, 2003

Mike,

I agree with you totally about the way people perceive values. If you simply don't charge for something there is a perception it really had little or no cost or value. When I "throw in" something for a customer I always make certain I list it at its retail pricing and then either do the extension on the invoice at $0.00 or do the extension at the full price and add another line crediting that amount right below it entitled 'Good Customer Discount' or something like that just to make sure there is a value place on that item.

I was on the other side of something like that a winter ago at an auction at which I do a lot of business and have for well over twenty years. I was in their parking lot and slid on the ice just barely clipping the quater panel and bumper of one of their service trucks passing by. Granted, it was a parking lot with no real right of way but I knew I was in the wrong and immediately called the auction manager from my cell phone and told him what had happened and that I was not likely to turn it in to my insurance carrier so to just send me the bill and I'd pay for it. Of course, of their dozen or more service trucks, I hit the new one with under 1,000 miles on it.

Two or three weeks later I get the computer generated estimate from their on-site body shop. With the bumper and quarter panel replacement and all it was well into four figures and as I looked at it I was reconsidering an insurance claim when I got to the last page. It read

PAY THIS AMOUNT..... $0.00

Had I never gotten the bill I probably would have only 'valued' what they did at somewhere near a quarter of what it truly was. This way I knew and appreciated it even more in a couple of ways. One was, of course, being cut such a break. The other was getting to see what this is like from the other side.