John Deere Inventory

[aesanders]

Why is it that John Deere Dealers seldom have a large inventory on hand. Even large dealers may have one or two 2000, 3000, 4000, 5000 series models at any given time. Then you goto a Kubota dealer or New Holland dealer and they usually have many of each size. It seems like John Deere works on the build to order idea and does not want to stock many models.

Is this everyone's opionion or are the dealers I've visited (and I've been to a bunch up and down the east coast) unique in this aspect.

 

[dgl24087]

Deere limits what the dealer can stock from what I understand. The only way to acquire another tractor is customer order or to replace something sold off the lot.

 

[dmp437]

Overhead, or trying to keep overhead down. Deere is trying to use Dell's business model and not build so far ahead that discounts are required to move stock at some point. This is part of the "Maximum Profit" strategy that was implemented roughly when the TWENTY Series was introduced. Compare the price of a TEN to a comparable TWENTY Series and you'll see a sizable increase. That's for us shareholders.

 

[timb]

It may also be a bit of a regional thing. When I was shopping for my tractor a few years ago - most of the Deere dealers that carried CUTs had at most 15 or 16 *total* CUTs, and that included all sizes of 4000-Tens, along with any 790s and 990s. However - the local NH dealers had (at best) the same count, the local Case dealer (also dealt with Mahindra) had NO Cases, only Mahindra's actually on the lot (maybe a baker's dozen) - and the largest local Kubota dealer seems to have a few more - maybe 20 - CUTs on the lot at any given time - although that includes the TLBs like the L48. Their stock looks larger as they also have the various excavators and other Kubota equipment parked in the same rows as the CUTs.

 

[lgcivttu]

Profit margins in the equipment business are way down. The dealerships that are struggling are also the ones with the most and oldest inventory. 3000/4000 series can arrive from the factory in about a week if ordered sold. So why stock more than a couple of each series? Some off-brand manufacturers will offer dealer discounts on tractors if they make a large pre-season order, but not Deere. A Deere dealer can order whatever he wants to stock, but ultimately it is up to Deere to decide when that order will actually get filled.

 

[ridgerunnerinwv]

It may also be a bit of a regional thing. When I was shopping for my tractor a few years ago - most of the Deere dealers that carried CUTs had at most 15 or 16 *total* CUTs, and that included all sizes of 4000-Tens, along with any 790s and 990s. However - the local NH dealers had (at best) the same count, the local Case dealer (also dealt with Mahindra) had NO Cases, only Mahindra's actually on the lot (maybe a baker's dozen) - and the largest local Kubota dealer seems to have a few more - maybe 20 - CUTs on the lot at any given time - although that includes the TLBs like the L48. Their stock looks larger as they also have the various excavators and other Kubota equipment parked in the same rows as the CUTs.

I was up at Hayhurst equipment in WV probably 2 months ago and they had hardly any green on the lot,but they had lots of New Hollands and Mahindras, I honestly thought they were getting out of the John Deere business then I thought no, it was something to do with supply.

 

[NewHollandDLR]

At my dealership...Deere has put limits on the Dollar amount of inventory to be held by us...It is $800,000 at dealer cost. Depending on what the dealer carries such as Ag or CCE or Construction and forestry this number I am sure changes...but how much can you really put on your lot with only 800k to work with...we have targeted the small and mid size CUTS...we keep aprox 6-8 2000 series and 10 or so 3000 series with 2 4020 series tractors and then keep aprox 4 110TLBs in stock and then some commercial mowing. With JD having a great response time on getting a retail sold piece to the dealership you really don't need to keep much more than a sampling of the target market tractors you want to sell.

Now with Kubota.....

I am also a Kubota dealer...we place an order once a year and we end up getting a ton of inventory to deplete over the year...being that they come from so far out...in Japan its not like you can order from the factory and just get it in a week or two unless the tractor happens to be instock at the closest distribution point. We have at least 3 if not more times the Kubotas onhand than we do the Deeres.

Now with New Holland....

I am also a NH Construction dealer....well with NHC you have to order ahead of time....be accurate on your projections for what you will sell...but you do have to order your large expensive pieces or if you get a sale of non inventory items then you have a 45 to 120 day wait or more in some cases to get from factory or beg and borrow from other dealers which ends up costing more once you account for extra freight and the like.

In regards to the old inventory......God I wish I had some...those get the biggest retail bonuses...better for the sale and better cost for the customer...we move em to quick to have old stuff on the lot...

I would have to agree with dmp437 regarding Maximum Profit

JD DLR

 

[aesanders]

That is very interesting JohnDeereDLR

To some it might seem like yu sell the most Kubota's (mybe you do) because you stock more, but it might be the opposite. I could tell soemthing like this was happening. When looking at he various tractor sizes, the Kubota dealers usually had several instock with different tires etc. John Deere dealers maybe had one in stock of any given model.

Only question I have is that since many John Deere CUTS are imported from Japan how is inventory held for these models? Seems JD would have the same restraints that Kubota has.

 

[MessickFarmEqu]

Only question I have is that since many John Deere CUTS are imported from Japan how is inventory held for these models? Seems JD would have the same restraints that Kubota has.

For both companies its going to depend on the distribution chain. Tractors like BX's are done domesticly in high volume, its easy to get more. A machine like an M-Series or a TLB takes alot more scheduling to build, so your really tied into the venders build schedules. Its not usually a big deal, you can always transfer inventory around. Kubota is shifting the way this works as we speak. Starting in January we're not getting the lump shipments like we have in the past. There is no volume limit, but both Kubota and the dealer will be making more projections as to whats needed and having it arrive at that time instead of in advance.

 

[radman1]

That is very interesting JohnDeereDLR

To some it might seem like yu sell the most Kubota's (mybe you do) because you stock more, but it might be the opposite. I could tell soemthing like this was happening. When looking at he various tractor sizes, the Kubota dealers usually had several instock with different tires etc. John Deere dealers maybe had one in stock of any given model.

Only question I have is that since many John Deere CUTS are imported from Japan how is inventory held for these models? Seems JD would have the same restraints that Kubota has.

My understanding is only the 790 and 990 are made in Japan. The rest are made/assembled in USA.