jd dealer markup?

[Coyote machine]

What arrow just said, AND I can guarantee the 'Mr. negotiators' out there will get service on their equipment that reflects just how much they beat down their local dealer. What goes around comes around, and dealers are humans with families, etc. too let's not forget. They know when one is trying to bare bones them and will act accordingly. Oh, but don't forget to give them your business card, that will seal the deal of the century every time.

 

[Dutch445]

thread is a week old,
OP has not revisited site since he posted
another 1 and done

coyote, totally agree with your post.
as one of those guys in the business, we quickly learn that the bargain hunters rarely
use the dealership for after sale purchases, be it parts or service. A few years down
the road they begin their quest seeking the lowest price again when they are ready to trade, usually low bidder wins.
so in reality it doesn't make much sense to give equipment away at little or low profit because
it isn't going to be a long term relationship anyhow. if someone seeks hard enough there is always
somebody willing to sell something cheaper, but i'm not that guy and my customers know that.
there is still something to be said for providing good service and support during and after the sale.

 

[MinnesotaEric]

thread is a week old,
OP has not revisited site since he posted
another 1 and done

coyote, totally agree with your post.
as one of those guys in the business, we quickly learn that the bargain hunters rarely
use the dealership for after sale purchases, be it parts or service. A few years down
the road they begin their quest seeking the lowest price again when they are ready to trade, usually low bidder wins.
so in reality it doesn't make much sense to give equipment away at little or low profit because
it isn't going to be a long term relationship anyhow. if someone seeks hard enough there is always
somebody willing to sell something cheaper, but i'm not that guy and my customers know that.
there is still something to be said for providing good service and support during and after the sale.

Shoot, I sold something. ******, now I must order more of that thing and get the factory to build more.

In other words, for deal-seekers, all one need do is start saying, "yes," to them in order to get yet another sale.

After all: the factory will build more.

When you don't sell, does your sales manager come over an pin a "Didn't Deal" medal on you, slap your back, and say, "Adda boy: stick-it-to-'em!" to the applause of your fellow employees?

 

[buzzyng]

This has been an interesting read as it directly applies to my situation of looking to buy an svl75. I agree with comments made by ETO and CM ... all while weeding out the sarcasm. As a SBO myself, I know first hand about people wanting to lowball negotiate as much as possible and that is fine because I'm the same way. I love to negotiate and while building my house, I save over 25k just by doing this. However, I did learn something that I never considered or heard of before. One contractor accused me of being disrespectful and didn't value him because I asked if he gave discounts for either cash or volume. He said that I should either accept his price without question or move on to someone else. I was never disrespectful but he just took it that way - have since learned that he pays whatever asking price is for car, truck, motorcycle, as he was raised that way (friend of a friend that knows his father).

Anyway, back to the point. Knowledge is power and can be used in proper ways to level the field a bit. I always do research before making a large purchase to make sure that it is equitable. If a business continually sells at dealer price knowing they don't get service/parts afterwards then that is not a good decision on their part. However, if a business makes it up on volume and that is their business model then it is ok. Story - I went to buy an RV and our local dealer who is known to have crazy high prices did have super high price. I shopped around and found someone else that was $15k cheaper. Dealer2 makes less profit but he sells hundreds and hundreds of units a year so volume is king.

There comes a point when the person has to know what their value vs $$ is for the piece of equipment and make a decision. If the OP feels the value is $20k but the dealer (for whatever reason) will only come down to $24k then he has a decision to make ... either pony up, walk away, go elsewhere, buy used, etc. There has to be some give/take on both sides.

Thanks for the time and appreciate all the info I've learned on here.

 

[arrow]

In other words, for deal-seekers, all one need do is start saying, "yes," to them in order to get yet another sale.



?

This can be flipped around. All you have to do is say "yes" to the dealer and all the stuff you state happens as a result of a sale, happens. If it's all "good" after the "yes", why wouldn't you want to contribute to that as well? Your statements make it seem it's the dealers fault if the customer walks away for say 50 bucks because the dealer didn't eat the 50. I've seen it happen when a person spending 25 K on a truck, walks away for 50 bucks????. To me, that buyer is operating with another agenda that has little to do with buying. One of the troubles with sales is that you can't select your customers. And just like there are crazies amongst us, that just is not limited to people shooting people. Crazies also come into public forums such as dealerships. Reasonableness works both ways. You may "love" to negotiate for the game, the dealer however is attempting to keep people employed, meet his pay roll, pay his taxes, deal with the personal problems of his staff, meet the demands of the public and stay in business. If you knew one of the dealer's secretaries' 3 year old child was fighting leukemia and her health plan wasn't covering it to the tune of 30K, would you be so quick to want to play the "negotiators" game as if that is all there is to you? You don't know what may be happening behind the scenes of that dealership but I can guarantee you, it isn't as much fun as you're having "negotiating"

 

[MinnesotaEric]

This can be flipped around. All you have to do is say "yes" to the dealer and all the stuff you state happens as a result of a sale, happens. If it's all "good" after the "yes", why wouldn't you want to contribute to that as well? Your statements make it seem it's the dealers fault if the customer walks away for say 50 bucks because the dealer didn't eat the 50. I've seen it happen when a person spending 25 K on a truck, walks away for 50 bucks????. To me, that buyer is operating with another agenda that has little to do with buying. One of the troubles with sales is that you can't select your customers. And just like there are crazies amongst us, that just is not limited to people shooting people. Crazies also come into public forums such as dealerships. Reasonableness works both ways. You may "love" to negotiate for the game, the dealer however is attempting to keep people employed, meet his pay roll, pay his taxes, deal with the personal problems of his staff, meet the demands of the public and stay in business. If you knew one of the dealer's secretaries' 3 year old child was fighting leukemia and her health plan wasn't covering it to the tune of 30K, would you be so quick to want to play the "negotiators" game as if that is all there is to you? You don't know what may be happening behind the scenes of that dealership but I can guarantee you, it isn't as much fun as you're having "negotiating"

I've both bought and sold millions of dollars of kit, primarily business to business. I took a sleepy business doing $800K a year to over $10M a year while preserving margin selling very technical products and services into a competitive market. I love low-ballers because they know what they want, don't waste my time, and I get yet another sale. If you want to pay more, please let us know.

I know exactly what is happening behind the scenes.

 

[Poopdeck Pappy]

Everything you say is true. Mark-up is based on dealer overheads whether it be paying for utilities, the son's drug addiction, the guy suing him, etc, etc. If indeed the op is looking for a "list" price to govern an offer, then he can only get so far based on the wishes of the dealership as they are the one's holding the product. They can only say "yes or no" to an offer. Once one (the buyer) starts "asking" , he has lost control of the purchase. People seem to put all the cards on "did I get the best price" instead of "boy I'm really happy I have this equipment and don't give too craps what others have payed". So I would say this: If an item such as a mower costs $8000 or has a tag saying "$7999". The "worth" of the mower to me is not the just the price but how does this enhance my life. So in my mind, I'm happy to have offered $7500 and get my equipment that has just saved me 2 hrs of cutting time and can only feel happy for the guy if I find out who got the same equipment for $7K. Other than that I could care less who payed what for what and that includes the dealer. Why invent more stress.

Well said.

I think most of us just want a "fair" deal. For example, I don't want to pay $30,000 for a tractor and find out the next guy paid $27,000 for the identical tractor. But if I pay $30,000, and the next guy pays $29,500, I really don't care. My time is worth more to me than fretting endlessly about whether I got the absolute bottom dollar.

For some people this is a game. It's about control, competition and always feeling like they have to "win."

 

[ljohnson778]

I have a New Holland and a Kubota dealership. I have recently acquired these dealerships. A few thoughts here...

First, I have a great staff, who are committed to 100% customer satisfaction.
Second, I pay them a fair wage, eliminating turnover, thus ensuring the same smiling faces for our customers.
Third, I provide quality healthcare, thereby not forcing them into obamacare.
Fourth, I have the best Techs in the industry, and pay and train them accordingly.

For those who think we make a mythical 20% markup, you couldn't be more wrong. I'm new at this, but I'm not out to get rich. I want a quality work environment for my employees, and a quality product and fair price for my customers.

I'm not the cheapest, because I won't cut costs on employee training or employee benefits. If a dealer can undercut me by mistreating his employees or customers, I guess I can't compete with that, and wouldn't want to.

I'll do this the right way, or I won't do this at all.

 

[MinnesotaEric]

I have a New Holland and a Kubota dealership. I have recently acquired these dealerships. A few thoughts here...

First, I have a great staff, who are committed to 100% customer satisfaction.
Second, I pay them a fair wage, eliminating turnover, thus ensuring the same smiling faces for our customers.
Third, I provide quality healthcare, thereby not forcing them into obamacare.
Fourth, I have the best Techs in the industry, and pay and train them accordingly.

For those who think we make a mythical 20% markup, you couldn't be more wrong. I'm new at this, but I'm not out to get rich. I want a quality work environment for my employees, and a quality product and fair price for my customers.

I'm not the cheapest, because I won't cut costs on employee training or employee benefits. If a dealer can undercut me by mistreating his employees or customers, I guess I can't compete with that, and wouldn't want to.

I'll do this the right way, or I won't do this at all.

Right, so all you need do is write X up at X price and you get another sale!

As part of the due-diligence you did before your purchase you puzzled out the margins you need in each department at given points of volume in order to eat, pay bills, throw the lights on every morning and smile all day. Anything above those margins is gravy. So if a cat rolls in wanting X ('cause he knows all about it through the internet and would order it through Amazon if he or she could) and wants to purchase something at or above the margin you need, you smile and write the deal up. Shoot, get the client to finance and catch an origination fee on top of it too.

In fact, get the client on board with a master leasing product so you catch origination fees and the client has the freedom to swap in and out of equipment at his or her leisure without need for getting approved every time they turn around.

Value add, value add.

 

[AchingBack]

When negotiating price, always remember the seven golden words: Is that the best you can do?

Simplify Haggling by Asking "Is That the Best You Can Do?"

Negotiating is a skill that comes naturally to some and is incredibly uncomfortable to others. Regardless of where you land on the spectrum, though, finance blog Financial Ramblings suggests you can get better prices with one simple question.

While you probably shouldn't try this with the cashier at Wal-Mart, asking "Is that the best you can do?" or some variation is a simple way to demonstrate that you're seriously considering the product, but still inquire about price flexibility. It can also prompt sales people to mention deals or packages they might not otherwise pitch right off the bat. As Financial Ramblings puts it:

More often than not, those seven magical words will score you a better deal sometimes a significantly better deal. And even if they don't there´s almost zero chance that you'll scuttle the deal.

The beauty of this strategy, aside from the fact that it hardly even feels like you're negotiating, is that it can be used in nearly any circumstance. Think yard sales, major purchases, salary negotiations, etc.

There are certain situations where it's always worth your time to haggle, regardless of how you feel about it. It's also worth pointing out that tone and context can help a great deal ("Is that the best you can do?" can sound accusatory if said with the wrong inflection). However, if you're new to negotiating or just uncomfortable with it in general, this is a great place to start.