jd dealer markup?

[MinnesotaEric]

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?

I'm willing to pay more for salesmanship (cf. the link I dropped earlier in this thread about the lack of professionalism in tractor sales, and my thesis as to where the problem resides). To your example of a bad salesman, a good salesperson would not have thrown out a remark that burned your bridge and pissed you off, but rather he or she would have recognized their own need to educate you, the customer, about the true cost and true value of their product. The salesperson could have done this by auguring in about build quality, or features, serviceability, availability of spare parts, or whatever. If they reached an impasse, then they could ask you what it would take to get your business, and then worked on their own value add that is in their power to bring to the bargaining table. Also they can spell out the clear difference between what they are asking you what you are bidding and then frame that difference in terms of the overall cost of the machine or package, and then ask if, at the end of the day, what you're really looking for isn't necessarily the cheapest machine, but the machine that gives you the best value? At which time you'll frame your expectations for the salesperson right there for him or her.

I gave my sales people the autonomy to make their own deals so long as we made money.

FWIW, I have no idea what Coyote said as I have him on ignore since he made it clear to me that he cannot discuss anything without making personal attacks. Life is too short to talk to negative people.

 

[Threepoint]

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.

Some of us enjoy negotiating and some of us don't. Some are good at it, some aren't. I've observed over the years that those who aren't tend to resent those who are. Those who are should be grateful for those who aren't, because they'll keep RV Dealer No. 1 in business to pay his staff and feed his kids. Those who are will keep Dealer No. 2 in business to pay his staff and feed his kids. Each to his own. I prefer to be the guy who buys from Dealer No. 2. It's curious to me that in a free market economy, based on capitalistic principals and the law of supply and demand, some of us pass moral judgment on those who negotiate for the best deal. I said best deal, which is not always the best price, for reasons ably discussed in this thread. A contractor who considers a request for a cash or volume discount as disrespectful is taking himself way too seriously, and if he himself never makes such a request when he is the one shopping for goods or services, then he's leaving value on the table at the expense of those who depend on him as the breadwinner. The saying "You get what you pay for" is another curiosity to me, and all of us use it from time to time. In a free market economy where both the seller and the buyer are informed and free to say aye or nay to the deal, it is theoretically always true. But at the same time we now it's not really. A buyer who paid $15K more to Dealer No. 1 for the same RV that Buzzng bought from Dealer No. 2 got what he paid for. But he sure didn't get more value, say what you will about service after the sale, and the satisfaction of knowing he improved Dealer No. 1's bottom line. Yep, I've bought two RVs, and I know what Buzzng describes indeed happens. If a buyer is content to pay $2000 more for a $30,000 tractor because he didn't have to negotiate, he thinks he'll get better follow-up service, and he knows the dealer can pay his secretary who's son has leukemia (a scenario posed by one of the members), then good for him. But suggesting he's made the world a better place is a stretch. And casting smug personal insults at the folks who do enjoy getting a better "deal" by negotiating is silly.

 

[ljohnson778]

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.

You sure did add a lot to my post that I didn't say... Thanks, but I'll speak for myself.

What I said was, I am not the cheapest, because I won't cut corners when it comes to employees or customer service. That costs money, simple. It's a free market, customers are free to shop wherever they see fit. I'll never turn away warranty or service work because a customer bought at a competitor, I feel that would be wrong. I am in business to make a profit, but, as I said, I'll do it the right way or not at all.

 

[buickanddeere]

I agree with Coyote. Maybe Farmers should drop the price they are asking for corn ?

 

[MinnesotaEric]

You sure did add a lot to my post that I didn't say... Thanks, but I'll speak for myself.

What I said was, I am not the cheapest, because I won't cut corners when it comes to employees or customer service. That costs money, simple. It's a free market, customers are free to shop wherever they see fit. I'll never turn away warranty or service work because a customer bought at a competitor, I feel that would be wrong. I am in business to make a profit, but, as I said, I'll do it the right way or not at all.

Who claims that least-expensive, or best-value, or happy-cutomer-got-a-swell-deal means cutting corners? What corners in sales must be cut in order to write up a sale that meets a department's margin requirements? Unpack the corners that would be cut if you wrote up a sale at a lower price than you hoped to sell?

The dealer agreements you have with your OEMs should prevent you from turning away warrantee claims on equipment sold elsewhere, so that isn't a corner that would be cut. In fact, selling more equipment has the potential to increase volume in your service department, so that doesn't look like a corner that would be cut.

You could fail to deliver a machine with a topped off fuel tank. Do you do that anyway?

Unpack what corners would be cut by negotiating?

 

[ljohnson778]

Who claims that least-expensive, or best-value, or happy-cutomer-got-a-swell-deal means cutting corners? What corners in sales must be cut in order to write up a sale that meets a department's margin requirements? Unpack the corners that would be cut if you wrote up a sale at a lower price than you hoped to sell? The dealer agreements you have with your OEMs should prevent you from turning away warrantee claims on equipment sold elsewhere, so that isn't a corner that would be cut. In fact, selling more equipment has the potential to increase volume in your service department, so that doesn't look like a corner that would be cut. You could fail to deliver a machine with a topped off fuel tank. Do you do that anyway? Unpack what corners would be cut by negotiating?

You add your own spin to every reply. Truth can't compete with rhetoric. I'm done with this thread. I'll continue to do right by my customers. You do whatever compels you.

 

[MinnesotaEric]

You add your own spin to every reply. Truth can't compete with rhetoric. I'm done with this thread. I'll continue to do right by my customers. You do whatever compels you.

I wish your venture success.

 

[paulfun9]

Negotiate and comparison shop whenever possible!

If I took the advice here I would have paid more for my DK40 and loader than I did for the tractor/loader/backhoe extra remote and first service combined.

Those of you who want to pay the asking price and overpay feel free! I will always compare prices and look for the best deal I can find.

To address the no follow up sales with those of us who look for the best price, guess what I have been back to the dealer to purchase a few things since my initial purchase and will be back again tomorrow for some other things that I could get other places a little cheeper but as I said to the dealer when I first started negotiating that I wanted to give him a chance to earn my repeated business and that is what he gets. No I wont or cant afford to buy everything from him but what I can I will.

Also if you consider the fact that I have sent people to him who are looking for new machines with nothing more than I am pleased with his service and that he has treated me good and provided an excellent machine at a fair price ( I don't give specifics on what I paid) you must consider that as follow up business as well.

 

[Garandman]

...
What I said was, I am not the cheapest, because I won't cut corners when it comes to employees or customer service. That costs money, simple. It's a free market, customers are free to shop wherever they see fit. I'll never turn away warranty or service work because a customer bought at a competitor, I feel that would be wrong. I am in business to make a profit, but, as I said, I'll do it the right way or not at all.

I read about an auto dealer years ago who won many customer service awards. When they asked him how he did it, he said "I don't do low-bidder business. If someone is shopping around three to five dealers for another $100 off, you would think that they would leave a happy customer and would not expect a high level of service. But in fact we find those people are never happy with the deal, and are the first ones to bad mouth you."

I run a dealer of a different sort, and when we get people shopping around, we ask the question, "Are you just looking for the lowest price?" If they say yes, we just tell them honestly we are not interested in their business. That doesn't mean we try to be the highest: we've just learned that those kind of customers did not help us grow.

The RV industry isn't really a good example as they tend to have inflated MSRP's and then offer big discounts to close deals. Industrial equipment tends to have more realistic pricing and discounts of over 10% are rare. YMMV.

 

[Poopdeck Pappy]

Negotiate and comparison shop whenever possible!

If I took the advice here I would have paid more for my DK40 and loader than I did for the tractor/loader/backhoe extra remote and first service combined.

Those of you who want to pay the asking price and overpay feel free! I will always compare prices and look for the best deal I can find.

Nobody on this thread is advocating being stupid and just blindly paying whatever price is quoted.

I happen to think there's a middle ground between bending over and bringing your own jar of vaseline vs. thinking you have to shake all the loose change out of the seller's pockets before you make a deal.

 

[Coyote machine]

You add your own spin to every reply. Truth can't compete with rhetoric. I'm done with this thread. I'll continue to do right by my customers. You do whatever compels you.

Absolutely right. I too am done dealing with the soothsayer who hides from my posts because he's unable to argue his way through my logic and 'win' his POV through obfuscation and clear lack of knowledge of the subject matter at hand. To clear the air; I'm not against negotiation being used to get a good/fair price. What is infuriating about the all or nothing bottom liners, me first and everyone else can kiss my grass mentality; so aptly displayed for all to see by the all knowing one, is the fact that in reality most dealers react to this type of ploy by turning away from this sort of business because they don't want or need it. This was very succinctly stated by Garandman, (post #49), who clearly deals in the reality of today's business world, rather than the over inflated egos of those who from all evidence demonstrate they might have been in charge of a 'sales force' but likely have never owned a business.
The reason I mention ownership of a business is without this experience, and insight, it is impossible to know what the grass on the side of the owner's fence needs to keep growing.
Smug personal insults, no, sarcasm, yes. Read through any or all E the O's threads and you'll come to understand why I choose to interject large levels of disbelief into his rants because they are so incredibly off base it's hard to even believe he actually believes in the things he goes on about. Thesis, unpack the corners? Diagnostic questions?

Personal example: I went with my building contractor to select and order a system/kit for my bath reno. The lumber company had offered me a 2013 sales catalog with retail prices and I selected what I thought I would need to complete the job. I sat down with the store manager and he placed a call to his vendor. I asked if I could speak directly to the rep to clarify some questions I had about the project's specifics. The manager told the rep I'd like to speak to him and we did so. The conversation helped me discern what I would need, and though the store manager had the prior week said if I ordered by Monday this week I could have the product at the store the next day, it changed to a week to 10 days out.
I asked for an alternative to the timeframe and was told $150 plus 10% of total order for guaranteed next day delivery to store or home.
I agreed and the mgr. wrote up the order and when I saw the bottom line I said those are all retail prices from the catalog. He said, 2013 prices. I asked if he might consider a slightly lower price considering the delay factor from what he'd originally stated the prior week, and I had planned my work around that delivery date? And the fact that this was his first sojourn into this product; that my builder and I would take pics of the installation and share them and our review of the product with him and any potential customers.
He explained some of the pricing structure on the product and how the shipping fees were structured regarding his costs, etc.
He gave me a reduced overall cost to accommodate me and billed my card the full amount instead of a deposit. I mentioned this to him and he said he should have mentioned it beforehand. I said it was OK and we concluded the transaction. No busting balls, no demands for cutting to his cost, just a reasonable exchange of goods for a price the dealer and the customer could agree on. One stop shopping. Satisfied customer; no running around or extra time spent calling around, driving around to get the absolute rock bottom price. Product delivered on time, as agreed to and paid for. No Advil needed. Respect shown by both parties......
Can I get some corn for below wholesale?

 

[mred]

Just to add my two cents. I am a little older now and maybe a bit wiser but I look for a fair deal. A deal where I may not be getting the best price but one where I can sleep at night thinking I was treated fairly and so was the dealer. I have had my dealer quote me price that was way out of line. When I researched it I simply went back and said this is not right (actually presented a disappointment argument ) and been given a good deal. I use to just walk away and go somewhere else, time has proven that is not the best tactic. I honestly believe there needs to be some give and take to build a good relationship with a dealer. I do go out of my way to support this dealer now and I do buy some things at a higher price especially when I know business is down. I have noticed if I need help with something I seem to get it and it is nice to go to the dealership feeling good about the relationship. Others may feel differently.

 

[GManBart]

There sure seem to be some dealers puffing their chest out in this thread...funny how that happens. Even funnier, to me anyway, is that sometimes the dealers with the best prices for hundreds of miles in any direction are ALSO the dealers with the best reputation for service after the sale, etc.

If you read the comments of the dealers posting in this thread, one has to wonder how it could be possible to offer both the best prices AND the best service.....must be magic!

 

[arrow]

This thread took a bit of a spin. No where in this thread did anyone say "not to negotiate". I believe what people here were trying to say that it isn't necessary to "grind down" the business owner or the type of "grinding negotiation" after the seller has capitulated to a certain price point. Somehow I believe that the word "negotiate" or the term "love to negotiate" got misconstrued to "love to grind down". I myself managed to gather this with the remark of having the business man always having to say "yes". I personally will not involve myself with this type of buying technique and in some instances, this method can have further ramifications unknowing to the buyer. People got rubbed the wrong way here and brought the flavor of this thread down. Now after this dust up is settled down, I hope we can still be " all in this together"

 

[arrow]

. But suggesting he's made the world a better place is a stretch. .

Not the world but perhaps the little community.