Tractor News Cabelas has tractors!!??

[MinnesotaEric]

FYI. 24 units is an epic failure. No dealer could survive on that, and a retailer like Cabela's who looks at $$ per sq\ft is going to quickly find that its not worth the floor space.

Cabelas has been selling tractors for how long? Less than a year?

The Cabelas in Rogers has way too much floor space and extensive, unused parking. Flooring isn't a problem for them and $700,000 or more in sales isn't a bad start considering all they sell is compact tractors.

 

[GManBart]

Cabelas has been selling tractors for how long? Less than a year?

The Cabelas in Rogers has way too much floor space and extensive, unused parking. Flooring isn't a problem for them and $700,000 or more in sales isn't a bad start considering all they sell is compact tractors.

That $700K has to pay for the training, salary, benefits, etc for the people they hire to service them, and for the facility used (assuming it's not collocated with something else like boat repairs/service). $700K won't go very far when you factor in all those other things. I'd have to go back and look, but I think it was around this time last year the first time I saw tractors at the local store.

 

[MinnesotaEric]

That $700K has to pay for the training, salary, benefits, etc for the people they hire to service them, and for the facility used (assuming it's not collocated with something else like boat repairs/service). $700K won't go very far when you factor in all those other things. I'd have to go back and look, but I think it was around this time last year the first time I saw tractors at the local store.

If in house, the same techs are fixing other stuff as well, except now a few of them got sent to school--or even better they picked up some out-of-work auto techs who can take anything apart. Boat motors, ATVs, tractors and so forth. Also, Cabelas has likely scheduled a division loss for a number of years and can write the loss off against gains in others areas minimizing their risk.

 

[GManBart]

If in house, the same techs are fixing other stuff as well, except now a few of them got sent to school--or even better they picked up some out-of-work auto techs who can take anything apart. Boat motors, ATVs, tractors and so forth. Also, Cabelas has likely scheduled a division loss for a number of years and can write the loss off against gains in others areas minimizing their risk.

In following the other thread(s) on this topic, they actually hired new employees with background in heavy equipment repair. There might have been some current employees who were trained, but they definitely hired a number of new folks. Some of the stores didn't already have a repair facility for other machines, so they bought/built new space for servicing tractors.

It's a safe bet Cabela's is going to be losing money on them for a while...once you hire people, and build new space, it gets expensive quickly.

One of the job postings:
https://sjobs.brassring.com/tgwebhost/jobdetails.aspx?partnerid=25405&siteid=5454&jobid=1169002

 

[MinnesotaEric]

In following the other thread(s) on this topic, they actually hired new employees with background in heavy equipment repair. There might have been some current employees who were trained, but they definitely hired a number of new folks. Some of the stores didn't already have a repair facility for other machines, so they bought/built new space for servicing tractors.

It's a safe bet Cabela's is going to be losing money on them for a while...once you hire people, and build new space, it gets expensive quickly.

One of the job postings:
https://sjobs.brassring.com/tgwebhost/jobdetails.aspx?partnerid=25405&siteid=5454&jobid=1169002

Sweet, then through the new hires Cabelas is showing us a deeper level of commitment than most retailers who simply add a line card to their show floors.

Cabelas is doubtlessly looking at demographic trends where there is a massive shift of wealth and home location taking place at an increasing velocity from cities to rural settings and seeks to supply the consumerism that comes with that shift.

I guess the bottom-line is that any kind of buildout or expansion assumes risk and since we don't know the top or bottom-lines (I threw out $700k on a sub $30K average), all we're both doing is guessing.

 

[MessickFarmEqu]

more things here make this conversation interesting. Any dealer will tell you that the road to profitability comes from parts and service. Cabalas would have a very limited chance at being able to provide much of either of those things at this point. Industry average net profitability for a dealership is 2-3% of your gross sales, and that's with all departments humming away. The only way I can see this makes a lick of sense for them is if they where able to cut a deal with TYM that their cost on the units and profit on their sales is much better than industry averages. I'm not sure they have leverage to do that though with 50 stores. There are dealer bodies much larger than that selling far more tractors and none have struck out to brand their own product line.

 

[kneedeep]

Perhaps Cabelas is willing to have a loss in that Division to get their name attached to the market for the food plot implement sales?? Love to have one of the Woods Drills they sell!
You got to admit, the Cabela tractor is slick looking, lots of bells and whistles. Some of the people around here would buy it and equipment for that reason only to park in the garage at Hunting Camp next to the Cab UTV, Duck Boat and 4WD truck.

 

[dusty3030]

Bass Pro shops did it with boats, who knows.

 

[MinnesotaEric]

more things here make this conversation interesting. Any dealer will tell you that the road to profitability comes from parts and service. Cabalas would have a very limited chance at being able to provide much of either of those things at this point. Industry average net profitability for a dealership is 2-3% of your gross sales, and that's with all departments humming away. The only way I can see this makes a lick of sense for them is if they where able to cut a deal with TYM that their cost on the units and profit on their sales is much better than industry averages. I'm not sure they have leverage to do that though with 50 stores. There are dealer bodies much larger than that selling far more tractors and none have struck out to brand their own product line.

My Kioti dealer explained to me that tractors don't really have a whole lot of after sale service as the people that tend to buy them are pretty handy and the tractors themselves are pretty reliable. For the most part that has played out true with my limited experience as the parts I'vve ordered are replacement for something that I damaged.

 

[Jim Timber]

I'm not sure they have leverage to do that though with 50 stores. There are dealer bodies much larger than that selling far more tractors and none have struck out to brand their own product line.

NorTrac? I think the Cabela's family could probably buy Northern Tool, and somehow they've been selling tractors under their own name for years.

I don't know of a single person who owns a Nortrac either - certainly there has to be a couple out there though.