Pricing

[Anonymous Poster]

O.K. Guys I've been reading alot of stuff on this board and just thought I would post a few things about dealers in general that might interest some of you. Now I don't want to lump all dealers into one bunch, some of the things that I post may not pertain to ALL dealers. I only know from my own experiences.
First off just because one dealer can give you a good deal not all dealers of the same brand can give you the same deal.
If you have never been a dealer, don't tell a dealer "You can cut the price more than that, I'm going to XXXXXX's place!" YOU don't know that.
Some people think that dealers just pull inventory out of a hat. NOT SO!

Dealers have LOTS of overhead. (Some more than others) This is the reason for SOME pricing differences.

Insurance is a big one.
Shipping, the stuff don't come frieght free.
Employees (This opens up a BIG expense)Workers comp, etc
Parts Inventory(even if ya never sell it ya still gotta stock it just in case)
Tractor Inventory(the longer it sets the more it costs)If you want a tractor buy it just as soon as it hit's the lot. Chances are you'll get a better deal and the dealer will love ya for it.
Grounds maintanance
Shop equipment.
Delivery Vehicles.
Customer Service.

I could probably go on FOREVER.

I'm just trying to point out some things that some of the newer members to the board might not know.

I don't know everyones dealer so I can't say for sure about the dealer closest to you BUT
Your dealer is not out to screw you, he needs to get as much as he can out of the machine you want, so he can be ready for when times are lean.

In case y'all didn't know it , If the dealer don't make money what's his reason for doing it?
A dealer who only makes the bare minimum is usually the one that guys are talking about disappearing without a trace/w3tcompact/icons/sad.gif
No, I wouldn't expect anyone to pay list or above list.
Just remember the above when you beat your dealer out of the last bit of profit he was going to make on that tractor that's been on the lot for awhile.

When your dealer is higher than the other guy weigh your choices wisely. If your local dealer goes out of business, who are you gonna call for service, parts, etc.

The moral of this story................cut your dealer some slack!

Please don't be offended by this.
I am being very sincere about this subject.

Dealers who have other thoughts on this subject PLEASE post.

PEACE

 

[Golfgar4]

I'm certainly not a dealer, but I'm betting that you are (or were)/w3tcompact/icons/wink.gif. I can't speak for anyone else, but I can relate my experience in my area. I have the big 3 (green, blue, orange) within a 15 minute drive. The next closest for any of them is 45 minutes. I won't mention any colors, but 1 out of these 3 told me to my face (at least the sales person did!) when I asked why they were so much higher than anyone else that it was because they were the only dealer of that brand in the area and they could charge whatever they wanted./w3tcompact/icons/shocked.gif My reply - "that's true, but you won't be charging me that, cause I'm out of here!!

I agree that the dealers have costs that us "regular" guys don't probably realize. And I also agree that the dealers are entitled to make a decent profit because that's what they are in business for. But when a dealer blatantly claims that they can charge whatever they want, I don't think they really want to be in business. They just want to make the most $$ they can at the expense of anybody else. A TRUE businessman is going to be up front in dealing with the customers and is going to realize that returning business is what really makes him his money. He's going to provide the best possible product at a fair price with the best support service for that customers purchase.

Like I said, IMHO, I expect the dealer to make a profit. But I'm not going to accept being taken to the cleaners because they may have some costs I'm not familiar with.

 

[Anonymous Poster]

I'm not talking about dealers that are blatant ***holes. I would change brands over something like that. I know dealers all around that are like that. One of which got a well-known brands franchise yanked out of the store because of the Holier-than-thou-I-got-what-you-want attitude. Yes I AM a dealer and my customers get the best service I can possibly give them. I go out of my way to make them happy. In the same token alot of people that come in act like all dealers are just money grubbers that can (if they want) give them a tractor for wholesale price. The comments are aimed at OTHER dealers but you know where they are heading with the comments. I want them to buy my tractor BUT, I don't like hearing them bash ANY dealer. That was the purpose of the post. To make people aware that there's alot more to the business than just throwing the tractor out on the loat and put up an OPEN sign.

PEACE

 

[dummy]

Any suggestions on how to talk nicely with a dealer that is asking a price considerably OVER list ?

 

[Anonymous Poster]

Be upfront, ask why he is that much higher. If he feeds you an OBVIOUS line(it'll probably have something to do with him being the only dealer in the area). Now you have a choice to make. There TYPICALLY is no reason to ask a price over list. If a dealer HAS to do that then he's not managing something right. Or he's price gouging/w3tcompact/icons/sad.gif/w3tcompact/icons/mad.gif.

PEACE

 

[RoyJackson]

Any suggestions on how to talk nicely with a dealer that is asking a price considerably OVER list ?

Just be prepared to walk away...if he (or she) wants to deal, they'll call ya back!
Y'know, there's always another tractor....another dealer.

 

[dummy]

I did and would again walk away. This particular dealer swore that it was below cost, yet he needed a calculator to interpret the sales book numbers! Everyone wants a good deal, but it seems that most dealers (car, truck, tractor, etc.) are always saying that's the bottom line and they're losing money selling it for that price. Why should consumers have to pay "extra" for slow economic times, marble counter tops, fancy showrooms and the like? And what about the dealer that hasn't changed the paint in the last 10 years either? These are the types of things I notice. And neither type has any effect on my decison to purchase.

 

[Anonymous Poster]

Ain't Competition Great!!! Internet sites help tremendously also. All business is very competitive these days. Dealers either meet/beat the competition or they are gone. Sometimes bad management internally makes it hard to stay in business. Just my two cents worth.

 

[Ob1Kioti]

The internet will hurt alot of dealers. I hope it doesn't put my favorite dealer out of business. /w3tcompact/icons/sad.gif
Competition is great. It's why alot of other stores hate Wal-Mart. Come to think of it maybe competition is good to a point. At a certain point it becomes a monopoly.....

If I have enough money I can set up in an area...aquire the dealerships of all competing brands...then you will have to come to me for ANY brand /w3tcompact/icons/grin.gif/w3tcompact/icons/grin.gif/w3tcompact/icons/grin.gif. Some will drive to get better pricing alot will not. That will make me even more money then I can start buying the surrounding dealerships in a larger circle around me Hmmmm......Now where did I put that checkbook.................HEY, HONEY where's the checkbook! I'm going out to create a tractor empire. I'm gonna be as big as Microsoft!!!/w3tcompact/icons/grin.gif/w3tcompact/icons/grin.gif/w3tcompact/icons/grin.gif

Ob1

 

[Turfman]

Last year was my first as a small landscape contractor. We worked part-time while I hold down a full-time job, help with the kids, take a few college classes, etc. I priced things for customers so that I made a reasonable profit, I certainly didn't want to gouge people.

I went over my books at the end of the year for taxes. I added up my costs, insurance, licenses, taxes, tractor payment and vehicle mileage. I came to the conclusion that I was supporting my customers at the expense of my family. I certainly shop around when I buy something and try to find the best deal, but this end of year book review has really given me a new appreciation of the reason things cost what they do.

This year I'll price to make a profit....hopefully.

 

[Anonymous Poster]

Am I missing something....If the dealer can't lower his price he can't lower his price. As the consumers, we're not responsible for ensuring that he stays in business or even that he runs an efficient business. Our economy supports competition through information....we all know roughly what everything costs. We can even order a tractor on-line and have it delivered half-way across the country. The times are changing and the old-way dealers are slowly learning to adapt or move into another business.

I find plain old customer service to be worth a lot more than a few hundred bucks. A hot cup of coffee and a freindly conversation about my needs and what is available to support them is what its all about.

 

[Miklos]

When I was tractor shopping, mainly for JD and Kub, the main thing I noticed was the farther I went away from the big city, the better the prices were. I got prices that were in a $1800 spread on a Kubota 2910 with FEL & R4's. Maybe keeping that in mind can save some money. You can always have your warranty work done and get parts at the close dealership, even if you buy from a distant one. They usually make more money on service and parts than the orginal puchase.

 

[TerryinMD]

<font color=blue>The internet will hurt alot of dealers. I hope it doesn't put my favorite dealer out of business. </font color=blue>

Huh... I have not seen many businesses "hurt" by Internet shopping!! Internet purchasing was thought to be a WalMart of sorts with all of the hoopla and Internet growth during the past few years. Take a look at the mortality rate of eBusinesses!! /w3tcompact/icons/shocked.gif Not a very nice picture.

If your dealer goes out of business, do not blame it on the Internet. There are probably many other factors involved. No one wishes any business to fail (unless the business is not consumer oriented or sells junk).

From what I understand from conversations I've had with dealers, their pricing structure is dependent upon the volume of equipment sold. The more they sell, the bigger a discount they get from the manufacturer. Think WalMart and the model they use for setting their prices. Volume purchasing, eleminating the middleman = lower prices to the consumer. Sounds pretty good to me.

There is competition and there is greed. I wouldn't try to equate the two. Usually, the greedy businessman looses out in the end and gets his just reward. Failure!!

My thoughts... only mine... it's Friday and time to call it a week. Now it's time to plan for some seat time this weekend!! Yee-haw... the smell of diesel in the morning./w3tcompact/icons/smile.gif

Terry

 

[Anonymous Poster]

I agree with you 100%. Everyone has to make a living. You have to make a profit. Tractors aren't like big car lots that may sell 20 cars a day. A dealer may only sell 1 or 2 new tractors a week. How many of you have bought new cars? Well guess what? Unless you're the man that owns the dealership, then you were taken for a ride. There are both good and bad dealers. If you're the kind of person who can't seem to find a good one, then you may be the problem. I know, I know, we all want good deals. But dealers have to stay in business. If you really want the best deal then look in the classifieds. Buy from an individual. Go to an auction. Do some work yourself.

 

[RanchMan]

I understand your points, and agree that you should cut your local dealer some slack, but at the same time, there's a difference between cutting a "nice dealer" some slack and throwing your money away.

I have always been willing to pay a premium to those located close to me for products and services, but there's a point to where this becomes unreasonable. In my recent quest to buy a tractor, the dealers close to me were running $2000 - $2400 higher than one that was about 5 times the distance. /w3tcompact/icons/shocked.gif (below list, but still much higher than the lowest quote I found)

I entered into negotiations with the "local" dealers, and although they were all very nice, they were unwilling to match (much less beat) the price I was offered elsewhere. /w3tcompact/icons/frown.gif I even offered $900 more than the lowest quote to the local dealers - and they still were unable to meet the higher price /w3tcompact/icons/shocked.gif.

Am I mad at them? No. Were they mad at me? No. (one even told me directly that he completely understood the economics of it).

Why did this happen? As alluded to by Obi1, the "Wal-Mart" model - e.g. the business of high volume/low margin vs. low volume/high margin. Both business models have their place, but let's be honest - any type of business has to choose where they fit in this continuum and adjust as necessary.

If a dealer's afraid that the "Internet will hurt my business" - then get on the Internet! /w3tcompact/icons/eyes.gif Web-site hosting is not that expensive and even if you don't post your prices on your web-site, responding to e-mail is pretty darn easy.

The further you live from metroplex type areas, it follows the harder it would be to get volume business, but, there is no reason for a dealer to stick their head in the sand and not take advantage of low cost marketing tools (such as the Internet).

By doing so, there is the very real chance that the sales volume will increase because of price competition, especially if they look at following a JIT business model for certain brands/models of tractor (e.g. have a "demo" on the lot and only order when a sale is made and $$$ in hand - not for every model, but for those that it makes sense). /w3tcompact/icons/hmm.gif

The beauty of the JIT model is that cost is incurred only after the sale - so a lot of the OH to stay in business simply doesn't apply. Additionally I bet a lot of customers would be willing to wait a week or 2 for a shiny new tractor "straight from the distributor" instead of taking possession of a "new" tractor that has sat on the lot for months exposed to elements/novice drivers/etc. On top of that, the more tractors sold, the more revenue can be generated from parts/supplies/accessories from the enlarged customer base.

I guess my point is that yes, I want the local small-time/good relationship dealer to be around tomorrow, and I'm even willing to pay a premium for this proximity to service to a degree.

Margins may be thin for the dealer (regardless of business model), but at the same time, margins are awful thin on the other side of the equation (e.g. for farmers/ranchers). Personally, I am unwilling to subsidize a failing business model for those dealers who refuse to adjust their approach because "that's the way we always did it". Selling tractors (or cars, or trucks or <insert item here>) is a business, and business owners have to adjust their approach to stay in business - like it or not.

I'm really not trying to get preachy or "dealer bash" by any means, I'm simply trying to point out that while times may be "lean" for dealers, times are "lean" for consumers as well and it may be necessary for the dealer to change their approach to ensure they can stay in business.

 

[ecard]

It's about time we had a heated thread!

We (the consumer) don't owe dealers a [censored] thing - including slack. I like my dealer and I drove 50 minutes to buy from him because he was the lowest in my area - but others on this board got a better deal than me so he still made money. But even if he would have sold it to me under his cost wouldn't make me want to donate to his relief fund. If a dealer or any business person is that stupid then they deserve to go out of business because they are going to anyway.

My feeling is that it is a game and the dealers hold all the cards - unless you can fab a compact in your garage.

Power to the consumer!!!!!!!!!!!!!!!/w3tcompact/icons/king.gif

 

[RanchMan]

Let the contest begin!!! /w3tcompact/icons/smile.gif

With that being said, I actually agree with you in that you don't owe the dealer anything, but at the same time I (and some others) are willing to pay some sort of premium for the relationship/proximity aspect.

What one believes as "reasonable" is their own opinion, and we all have different "pain" points with regards to how much $$$ to shell out.

For me, my personal opinion was I was willing to go $900 higher to go "local" (my costs in gas/hotel/food/etc. added up to about $400 to make the trip to pick up my new tractor, so really the "extra" I was willing to pay the local dealer was $500)

That was my pain point based on what I value my personal time at and what I felt was "reasonable" - others would have done it for less or more based on their opinions.

I guess my perspective is somewhat divided since I play "both sides of the fence" - sometimes as a businessman, sometimes as a consumer. I don't think it's unreasonable to pay a bit more by understanding that a "mom & pop" shop simply can't compete as aggressively as a "Wal-Mart" if they do offer things such as proximity/service.

At the same time, I, like you, am unwilling to pay unreasonable prices to "subsidize" a business that refuses to change and stay competitive. I guess I'm saying, for me, there is a balancing point between cost & convenience.

 

[Anonymous Poster]

<font color=blue>...there is a balancing point between cost & convenience... </font color=blue>

Nicely said... /w3tcompact/icons/smile.gif

{... but on the other side of the coin... you will always have people driving 30 miles to save $2.../w3tcompact/icons/crazy.gif}

 

[Anonymous Poster]

Dealers will charge you what they can convince you it's worth, unfortunately there it an inherant distrust in sales that the dealers/sales people can only blame themselves for- they created this system of buissness and now they have to" lie" in it. No, I don't think I owe dealers anything except my honesty, which I fully expect in return./w3tcompact/icons/smile.gif The things I have learned is that I choose where my money goes ,and I see a lot of owners who become "Kings" and want to be treated accordingly; work one hour a day, pay their employees bare minimum and keep the ransome for themselves ,and if you don't like it you can "walk "and I will get someone else in here that the costomer does'nt recognize. I try to do buissness with fair hardworking consistant and familiar faces. I did pay more for my L3000 than I would have at CARVER, but it's my hometown dealer./w3tcompact/icons/smile.gif ( No offense Mr. CARVER ,I just don't know you or your employees)

 

[Anonymous Poster]

none taken ... i agree totally...