Let me ask the question a different way..........

Steve_Miller · May 5, 2005

If Wal-Mart and Toy-R-Us both sell the identical toy, and one of them is selling at a higher price than the other, who is making a fair profit and who is taking advantage of the consumer? Or is it that both are making a fair profit? Now assume both are in the same town, in fact both are on the same street within 1 mile of each other, so we can assume the property taxes, labor costs, rent, etc are equivalent. And if the item is not on sale, but simply being sold at list, is that gouging? 

 Now I don't know about all brands of tractors, but I've had two dealers tell me that they can earn volume discounts and rebates or incentives. That may not apply to all brands, but it apparently does apply to some.


 Folks, these are tractors we are talking about, not Tiffany originals. 

Bob,
Are we comparing toy tractors to real tractors to Tiffany's? There is probably quite a difference between these items, not a real apples to apples comparison even from a business stand point when it comes to specific products. I'll admit I'm not a business person by any means, but its up to business how they conduct their own business and if the consumer doesn't buy it then guess what. That's my cents worth.

Steve /forums/images/graemlins/confused.gif /forums/images/graemlins/confused.gif /forums/images/graemlins/confused.gif

DrewL · May 5, 2005

Al Gore invented the internet? That is still funny...............

As a buyer of cars, trucks ect. I feel that if the dealer is willing to sell you a vehicle at an agreed upon price then I have left money on the table. If they are not willing to sell a vehicle at a particular price then I'm getting warm. No disrespect intended to the tractor dealers but when I'm doing my research and good faith pricing requests , I have to ask why when two dealers are , litterally, thousands apart. These are dealers within 100 miles of me. With exception of ONE dealer who seems to be upfront with me from the start, I have little confidence other dealers were in fact being honest with me. Nature of the game I suppose and I don't take it personal. Just trying to play the game which it seems that it is turning into

MessickFarmEqu · May 5, 2005

As for the pricing question, don't think that doing the % off list game or any kind of simple formula is going to get you close. It takes me all but a good 5 minutes to calculate all the costs involved in selling each tractor. Infact I can sell two identical tractors to two people and end up with a margin that varys by as much as $300. The best way that I can think of to get a real bargin is to find the tractor that you want sitting on the lot and ask to buy that particular one and haul it yourself the next day.

virgil · May 5, 2005

Mr. Drewl,

May I attempt offer ONE explanation for such a price differance of the same machine...

Lets say I have "rock bottom, no haggling prices" on the machines on the lot.

That has its advantages... When some one call me or stops by to check the price, I have a shot at the sale. No games, no tricks, no smoke and mirrors, no bad feelings.

That same "rock bottom price" also has its disadvantages...
The same costomer that is out trying to get the biggest bang for his hard earned money then informs me that he has a 50 year old tractor to trade in and he wants three grand for it. The poor machine is wore If I continue on with the sale (make the trade), I have just shot myself in the foot. I would have been better off giving the man a hundred doller bill and thanking him for his time.

My "rock bottom price" leaves me no room to do anything other than just sell / support the machine, But it gets the customer on the lot. It is also a double edge sword!

By the way, If I was the buyer, I would want 3 grand for my 50 year old, wore out machine also! I've been on both sides of that fence.

That is enough rambling on and on for now.......

depratt_equip · May 5, 2005

Sorry to those to think my post came off harsh. DrewL please don’t take offense as my thoughts were not directed toward you, they were just a collection of what I think. Also one of the biggest causes of price difference you might see would be freight. We pay a ton to get tractors up here, the more we can pack on a load the better the price would be on the tractor, but the same is true if we don’t get very many. Freight rates are always changing (usually up). All dealers work off the same numbers and all dealers deal though Kioti if that answers any of your questions.

( how are we consumers supposed to know unless we ask? And when something is quoted at list, or very near it, why should we accept it? In fact I don't care to know what you make, but I do care what I pay.)

I agree that list prices should be published by tractor mfgs. Never said they shouldn’t, nor did I ever say that you should accept list price out of someone. Consumers shouldn’t know what a dealers discount levels or incentive levels are. I think they should be given list price and I will get it to any customer who comes in and ask.

( And a follow up, what about the dealers who do not give a fair price the first time? You know the ones who make consumer haggle. Why sould we even have to endure that? Isn't that just a way of saying I'm going to charge you a high price and wear you down until finally cave in and pay me or until you get tired of my games and go to another dealer. Sorry, but I don't want to play games.)

Bob I have never figured out why some dealers do this, I agree with you 100% that I don’t like to play games either. That is why I always give the best price the first time, which doesn’t leave me much of any wiggle room on price. Some customers do not like this and take business else where… but what am I to do?? Many don’t even try to haggle, so I sure wouldn’t want to price things high to come down because it would turn them away. But I do agree, I don’t like the games. If you come to my lot you see list prices on all machines our selling prices, plain and clear for all to view. Dealers should cut out the games, just as my consumers should too.

( This is not called 'the information age' for no reason. We all are using the internet for the purpose of gaining and sharing information. But even before Al Gore invented the internet, consumer magazines and periodicals began publishing pricing and comparitive information about many different market segments from cars to washing machines. And now that compact tractors are becoming so very popular, it only makes sense that we share that information. . . and you don't have to like it, but it is a reality of business and if your business model does not embrace it, then I suspect that you will be fighting all the way to the poorhouse at some point in the future.)

Don’t quite follow all what you say here…. Why would not sharing my pricing information lead me to the poorhouse??? If anything people who know what i pay for it or have an idea of what my price is will have there own profit figure in mind that I should make, but they don't know what it cost to do business so there number is mostlikey off. I don’t believe this practice will lead me to the poorhouse…. My business model is to provide the best possible service before and after the sale and give my customers the best possible prices I can, while still allowing me to have my doors open to service them down the road. I don’t think not sharing my buying and pricing info has anything to do with fighting my way to the poorhouse…

MessickFarmEqu · May 5, 2005

While I am not a proponent of open books, it might remove some frustration for those of us who price more competitivly. If customers knew that often times they pay more in sales tax than I make in profit, than maybe they would not be so fussy.

70boss1 · May 5, 2005

"Dealers should cut out the games, just as my consumers should too"

Bingo! We as customers think it's the dealers playing all the games. As a former large auto dealer executive, I can tell you first hand many consumers do not even know when they are getting a good deal....these are the chislers....they will often get the best price yet they still are not happy. A dealer could lose money to get that last unit out at the end of the month, and the chisler gets the "Best Price" and they still are never happy.

The customer who sees value and buys, and pays a little profit have ALWAYS been the happiest.

As far as Kioti, I think all dealers work on the same formula. When I looked into the franchise there were extra incentives if a dealer bought his inventory outright as opposed to flooring the unit with the finance company. These discounts as I remember were 4-8%.

Bob_Skurka · May 5, 2005

Are we comparing toy tractors to real tractors to Tiffany's? There is probably quite a difference between these items, not a real apples to apples comparison even from a business stand point when it comes to specific products.


Steve, it is actually amazing who similar business issues really are across some very diverse industries. Each industry has multiple business models, and each industry actually ends up sharing almost all of the same concerns from material costs to labor to transportation. While each may be different, each comes back to fundimentals that are suprizingly similar.


Don’t quite follow all what you say here…. Why would not sharing my pricing information lead me to the poorhouse? 

Jon, my comment was meant to be a more "collective" form of comment for the tractor industry as a whole and how dealerships and manufacturers are apparently trying to squelch the information. This seems to be true at both dealer level and manufacturer level . . . and is NOT just limited to pricing issues. New Holland cracked down hard on internet sales of its dealers as did Kioti. John Deere's website, in another way squelches information about feature comparison by comparing a modern 4310 32hp tractor to New Hollands capable but old TC30. Regardless of the techinque used by the manufacture, whether it being to hide prices, or to mismatch machines for comparision purposes, the manufacturers are guilty of ATTEMPTING to hide information. If tractors comprised a larger customer base, like cars do, then I strongly suspect that Consumer Reports and many other magazines would be publishing far more information. However unit that time, the internet seems to be the place were people gravitate for information sharing. In this day and age it still amazes me that many dealers don't have websites, that many dealers are ignorant of competitive brands, or dismiss brands as non-competitive or poor quality because they are outside of the big 3.


Al Gore invented the internet? That is still funny............... 

DrewL . . . are you implying that he didn't? Do you mean to say that a politician lied?

Maka · May 5, 2005

I agree Jon. A dealer has to make a fair margin and no one knows what he has into his expenses nor should they. I won't get to deeply embroiled in this issue but when the customer gets a fair price (not cut rate give away) on a good machine & good service, the dealer makes a fair margin and can continue to operate then there should be no problem and everyone should be happy.

Of course the customer can shop and maybe get a cheap deal but they will usually pay somewhere down the line. I try and buy locally and if a bit more expensive that is OK as I can walk into the store or location I deal with and know pretty much I will get the service I need.

I will step out of this one for now.

Thanks,
Maka

elemint · May 5, 2005

[quote

As far as Kioti, I think all dealers work on the same formula. When I looked into the franchise there were extra incentives if a dealer bought his inventory outright as opposed to flooring the unit with the finance company. These discounts as I remember were 4-8%. )

What else did you learn about being a kioti dealer? Why didnt you do it? Thanks