Dealer pricing....

[eeekster]

Has anyone ever ran across dealer costs???? The Automobile Protection Association provides members with dealer cost prices and then puts you in touch with a dealership that will sell at dealership costs plus $500 markup included cut costs on shipping and PDI etc. When are these dealerships going to wakeup and give the farm people a break?

 

[MikeInEburg]

Could be that a dealership can't survive with $500 profit. Funny thing is that the vast majority of folks here are not really "farm people", but rather hobbyists and folks that happen to own a tractor.

 

[Bluegill2]

Sounds like a government program to me.

 

[eeekster]

The APA is not a government program! It is informed people buying at a reasonable price. If the dealership makes a little on each sale and move inventory fast then at the end of the day the dearler makes more than if the inventory were to sit on the lot.

 

[seymojo536]

Probably as simple as there are 10M new cars sold each year in the U.S. There are < 5M tractors that exist. Sales of new tractors are in the 100s of thousands. Just no incentive to provide that service.

 

[MHarryE]

Farm equipment business has been notoriously cuthroat; consequently a major reduction in dealerships over the years. When I see vehicles delivered to car dealerships, they are almost ready to go out the door. Pictures here show the tractors arriving at dealerships as a kit. There must be a lot of extra pre-delivery - is that provided as a credit to the dealer by the supplier or must it be factored in by the dealer? I assume that there continue to be volume discounts. At Gleaner (20+ years ago) combines were invoiced to all dealers at list less 23% but then came volume discounts so larger dealerships were always at an advantage. Then there are the serious customers. Assume a farmer comes into their dealership and asks for 2 combines @ $400k each, 4 tractors at $175k each. Then he asks the dealer to throw in a 4720 as a freebee. Is that company marketing goodwill or does the dealer need to eat the charge as advertising expense for making the $1.5 million sale?

 

[phiferpharm]

I gotta think that Tractors are priced more by dealer volume than cars/trucks. I know when I worked for a different type of equipment dealer (not associated with vehicles) the pricing for the dealer was based on a set cost, but the dealer got various discounts from the manufacter based on size of the "master" order, willingness to take some items that were not top sellers, etc. Maybe it is the same with Tractors.

 

[MessickFarmEqu]

Could be that a dealership can't survive with $500 profit.

...or could it be that our average profit is not too far off from $500?

 

[jlsmith]

...or could it be that our average profit is not too far off from $500?

I think you just hit it with that quote. Most people think that dealers make a killing off a tractor sale but in fact they dont when you add in the cost of pdis and putting them together. Not to mention that 2 identical tractors may be $1000 diff in price depending on when you got them. And dont forget the added cost when you have to go pick the tractor up from another dealer.

 

[MessickFarmEqu]

I think you just hit it with that quote. Most people think that dealers make a killing off a tractor sale

some do. there are a surpring about of shops out there who get list price, however a competitive dealer is usually shooting for a few hundred bucks. Profitability in our business is based on a long term relationship for parts, service, implements, etc. Selling the base machine is a gateway to doing business with that customer. Its an industry thing called absorbtion.

 

[ctlguy]

Absorbtion rate is important in that your parts and service should be providing for 100% of the dealers overhead. That does not mean that the dealer has to accept low margin deals on tractors. The idea, combined with absorbtion, is that you (the dealer) are THE desired place to buy from and are deserving of the extra margin on the machine, but yes I do think folks believe dealers are makeing more margin than they really are. But I can't blame anyone for operating a profitable dealership with high margins, sometimes the other guy is just worth more money. The automotive comparison always makes me chukle a bit and want to ask what is the lifting capacity of a toyota corrola anyway, and how wide of a roto-tiller can it power