Dealer markup on NH compact tractors?
- Thread starter Chuck_Lind
- Start date
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daTeacha
Veteran Member
Unless I'm mistaken, which has been known to happen now and then, tractors are not commodities. The dealer buys the tractor from the manufacturer at what he hopes is a good price, then tries to sell it for a profit.
The dealer cost of the tractor sitting on the lot is fixed, not floating like the price of fuel in a tank. The price you pay is a reflection of what the dealer paid or agreed to pay the manufacturer for the unit, which may vary from time to time.
The dealer cost of the tractor sitting on the lot is fixed, not floating like the price of fuel in a tank. The price you pay is a reflection of what the dealer paid or agreed to pay the manufacturer for the unit, which may vary from time to time.
daTeacha
Veteran Member
Unless I'm mistaken, which has been known to happen now and then, tractors are not commodities. The dealer buys the tractor from the manufacturer at what he hopes is a good price, then tries to sell it for a profit.
The dealer cost of the tractor sitting on the lot is fixed, not floating like the price of fuel in a tank. The price you pay is a reflection of what the dealer paid or agreed to pay the manufacturer for the unit, which may vary from time to time.
The dealer cost of the tractor sitting on the lot is fixed, not floating like the price of fuel in a tank. The price you pay is a reflection of what the dealer paid or agreed to pay the manufacturer for the unit, which may vary from time to time.
MessickFarmEqu
Super Member
thats not the case, manufacturer programs always apply to a new machine until its sold. They can cause the price to swing by a pretty wide margin.
MessickFarmEqu
Super Member
thats not the case, manufacturer programs always apply to a new machine until its sold. They can cause the price to swing by a pretty wide margin.
daTeacha
Veteran Member
So when you guys get a shipment of tractors in, you haven't already bought them?
There was a less than good car dealer around here who went to jail because he had mortgaged some of his inventory with 3 or 4 different banks at the same time. Don't ask me how he did it, but he got caught so it must not have worked.
There was a less than good car dealer around here who went to jail because he had mortgaged some of his inventory with 3 or 4 different banks at the same time. Don't ask me how he did it, but he got caught so it must not have worked.
daTeacha
Veteran Member
So when you guys get a shipment of tractors in, you haven't already bought them?
There was a less than good car dealer around here who went to jail because he had mortgaged some of his inventory with 3 or 4 different banks at the same time. Don't ask me how he did it, but he got caught so it must not have worked.
There was a less than good car dealer around here who went to jail because he had mortgaged some of his inventory with 3 or 4 different banks at the same time. Don't ask me how he did it, but he got caught so it must not have worked.
MessickFarmEqu
Super Member
</font><font color="blue" class="small">( So when you guys get a shipment of tractors in, you haven't already bought them?
)</font>
Nope. We have them on an agreement we dealers call "floorplan" where we have a set period of months before we start paying interest on the machines that we have on our lot. Some dealers do take some things into paid inventory to avoid interest charges, but this is pretty rare. We only do it with low cost implements and things we may have for awhile.
Inventory managment is extremely important. If you have old tractors sitting on your lot you can quickly get burried by the interest charges that they accumulate. Right now we are paying about 7% per year for our inventory thats over 9 months old.
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Nope. We have them on an agreement we dealers call "floorplan" where we have a set period of months before we start paying interest on the machines that we have on our lot. Some dealers do take some things into paid inventory to avoid interest charges, but this is pretty rare. We only do it with low cost implements and things we may have for awhile.
Inventory managment is extremely important. If you have old tractors sitting on your lot you can quickly get burried by the interest charges that they accumulate. Right now we are paying about 7% per year for our inventory thats over 9 months old.
MessickFarmEqu
Super Member
</font><font color="blue" class="small">( So when you guys get a shipment of tractors in, you haven't already bought them?
)</font>
Nope. We have them on an agreement we dealers call "floorplan" where we have a set period of months before we start paying interest on the machines that we have on our lot. Some dealers do take some things into paid inventory to avoid interest charges, but this is pretty rare. We only do it with low cost implements and things we may have for awhile.
Inventory managment is extremely important. If you have old tractors sitting on your lot you can quickly get burried by the interest charges that they accumulate. Right now we are paying about 7% per year for our inventory thats over 9 months old.
)</font>
Nope. We have them on an agreement we dealers call "floorplan" where we have a set period of months before we start paying interest on the machines that we have on our lot. Some dealers do take some things into paid inventory to avoid interest charges, but this is pretty rare. We only do it with low cost implements and things we may have for awhile.
Inventory managment is extremely important. If you have old tractors sitting on your lot you can quickly get burried by the interest charges that they accumulate. Right now we are paying about 7% per year for our inventory thats over 9 months old.
