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.

 

[Deere Dude]

To me it doesn't matter what the dealer markup is. If I want a certain product and check 3 or 4 dealers and they all claim a certain price and I think it is to high, I will check a few more dealers. If all or to high, maybe my expectations are unrealistic in this market. Then I either buy the cheapest, check the net or forget it for awhile.

If you check enough dealers, someone will give you a better deal sooner or later. You just have to be patient.
For instance, I wanted to trade in a 4 year old garden tractor with 250 hours for a new one of the same style. Four dealers told me the cost would be $6000 to boot on a trade. I considered that ridiculous and I would keep it for that.

On the way home from a town 30 miles away I had spare time so I stopped into yet another dealer. $2500 to boot from him, so he got the deal. He was paying his help good wages and insurance and had all the lights on, but he figured he could sell mine fairly easy, supposedly.

Why the big difference? I think most of the dealers just saw me as an easy mark, have their little black book and don't stray from it. Maybe $2500 was to much also, but it was something I could live with.

 

[MinnesotaEric]

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ｴ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.

This is great advice!

To me it doesn't matter what the dealer markup is. If I want a certain product and check 3 or 4 dealers and they all claim a certain price and I think it is to high, I will check a few more dealers. If all or to high, maybe my expectations are unrealistic in this market. Then I either buy the cheapest, check the net or forget it for awhile.

If you check enough dealers, someone will give you a better deal sooner or later. You just have to be patient.
For instance, I wanted to trade in a 4 year old garden tractor with 250 hours for a new one of the same style. Four dealers told me the cost would be $6000 to boot on a trade. I considered that ridiculous and I would keep it for that.

On the way home from a town 30 miles away I had spare time so I stopped into yet another dealer. $2500 to boot from him, so he got the deal. He was paying his help good wages and insurance and had all the lights on, but he figured he could sell mine fairly easy, supposedly.

Why the big difference? I think most of the dealers just saw me as an easy mark, have their little black book and don't stray from it. Maybe $2500 was to much also, but it was something I could live with.

And your story is why negotiating and patience matter.

 

[arrow]

.

I know exactly what is happening behind the scenes.

Behind the scenes of what? A small mom and pop dealership or nearly anonymous, over the phone, "business to business" once in a while face to face deal? My "behind the scenes" remark goes beyond , margins, quotas, sales and all business dealings as it relates to revenue. My remark pertains to a guy or gal running a business that is providing employment to the surrounding area where his/her 15 -20 employees become a surrogate family with all the trappings, foibles and delights associated to a "family". "If I want to pay more" becomes a fair statement that in some instances I would say "yes" to. If I thought the deal was fair, I'd wanna pay more than you. My scope goes beyond "me" as I put more value in the "bigger picture".

 

[Coyote machine]

I applaud the dealer's who realize dealing with the absolute bottom line negotiators and giving away their store merely to have made that extra sale for next to nothing is sheer foolishness. As a country and as local businessmen all across it there needs to be a sense of working as a community. This concept is completely missed by those who only look to the bottom line on any purchase. Their myopic mentality is all about the world being there to serve them.

Wish it were so that they could all go to Amazon or fleaBay for all their needs; including the cheapest brain surgeon, or heart specialist, as needed.
For the negotiators, call round, visit ever dealer within 500 miles and get the deal of the century. We're proud to support your endless quest in seeking the deal you can brag about to your like minded friends.

Scavenger birds picking at the roadkill carcass on the side of the road is what comes to mind when hearing the ludicrous rationalizations of the all seeing, all knowing one, among TBN's members.

For clarity here is a definition of what we're dealing with:

or·a·cle
ˈôrəkəl/
noun
1.
a priest or priestess acting as a medium through whom advice or prophecy was sought from the gods in classical antiquity.
synonyms: prophet, prophetess, sibyl, seer, augur, prognosticator, diviner, soothsayer, fortune teller, sage
More
a person or thing regarded as an infallible authority or guide on something.
"casting the attorney general as the oracle for and guardian of the public interest is simply impossible"
synonyms: authority, expert, specialist, pundit, mentor, adviser, guru More
2.
a response or message given by an oracle, typically one that is ambiguous or obscure.


Beware of false prophets, eh?!:shocked:

The no service after the sale is an important point also missed by the delusionally obsessed bottom liners. The whole mentality of outsourcing everything imaginable to some third world country that treats it's workforce like slaves or uses child labor and deplorable conditions to gain the most profit plays right into the Wally world nation of consumers of cheap disposable junk, and perpetuates the problems we have here at home attempting to keep the wheels from falling off the wagon known as the labor force of the USA.
Repeat business is valuable to the consumer and dealer.
How many times have we read here about tractor buyers fearing buying a particular brand because of not enough local dealers to choose from for service after the sale? Or their local dealership going away because of not enough business to keep them viable? We have the bottom line or nothing mentality contributing to this situation unfortunately for all buyers/owners.
And I guarantee if any of the negotiators were in business for themselves their perspective would not be what it is currently. Working for big corps is nowhere near the same animal as the small business owner day to day.

 

[murphy1244]

Waiting 2 weeks saved me 1748.00$!! Darn right I deal. I bought many things from my Tractor dealer including Saws.

 

[Coyote machine]

Him who Murph?

 

[murphy1244]

Him who Murph?

Ahh So Sorry?

 

[MinnesotaEric]

Behind the scenes of what? A small mom and pop dealership or nearly anonymous, over the phone, "business to business" once in a while face to face deal? My "behind the scenes" remark goes beyond , margins, quotas, sales and all business dealings as it relates to revenue. My remark pertains to a guy or gal running a business that is providing employment to the surrounding area where his/her 15 -20 employees become a surrogate family with all the trappings, foibles and delights associated to a "family". "If I want to pay more" becomes a fair statement that in some instances I would say "yes" to. If I thought the deal was fair, I'd wanna pay more than you. My scope goes beyond "me" as I put more value in the "bigger picture".

Everybody has a backstory, both buyers and sellers. And while everybody faces challenges, I know what goes on in the back insofar as what it takes to run a business and in particular, the business of selling.

Here is a diagnostic question for non-negotiators: how do they grow to expand their business?

And a diagnostic question for people defending non-negotiators: is suggested retail pricing a fair deal?

 

[Coyote machine]

ALL business is selling something.

How does a business grow? Something called reputation, along with having earned respect for treating customers fairly, in a timely fashion, and being available to help solve problems, if any arise. Among other things too.

MSRP is just what it says: SUGGESTED retail price. A place the MANUFACTURER sets as the base line for the RETAIL customer wanting to buy their product through a franchised dealer of the product, be it car, tractor, airplane, etc.

Is MSRP fair? That depends on the buyer's perception of whether he is getting what he/she wants for the price point they are buying at. Many times something valued as must have is sold for OVER MSRP.

For someone who claims to have so much behind the scenes experience in the business of selling, here's a field leveling question: have you EVER actually owned a business? If so what type? For how long?
My guess would be no.

 

[arrow]

how do they grow to expand their business?

And a diagnostic question for people defending non-negotiators: is suggested retail pricing a fair deal?

Answer to question no 2. Yes or no. Depends on the value as Coyote already stated. When I was looking for a tractor, I went to Kubota where an L 3400 had a $19,300 dollar price tag. I'm looking at this thing and I'm saying "no way" is this worth this much. I asked if he could sell it to me for 17.5 K. He turned away from me while laughing and said "its here when you become a real buyer"

Answer to question no. 1. This is not how to grow a business and even if he called me the next day to accept my offer, I would not have bought from this salesman. Whoever he was, he was not an asset to this business. What he did not realize was that "I WAS A BUYER". So you grow a business by being polite. helpful, accommodating, honest and respectful with solid service. Some of these things have little to do with pricing but have everything to do with "sales".

Now , lets play this with your scenario: Question no 1: He doesn't budge from over 19K. Nor does he accept my offer to the point of disdain. Would you care to "negotiate with this guy?

Question no 2. he accepts the offer of 17.5K. I already accepted this price because it matched my perceived value. I become a contented purchaser. Would you attempt to beat him down further?