66gladiator can you tell us the particulars of this portion of the dealer agreement....does it simply prevent another Kubota dealership within a certain distance of an established dealership or does it prevent a Kubota dealership from sales outside of a certain territory? I have trouble believing that Kubota would insist on the latter.
Nothing of the kind, there are 5 kubota dealers within 60 miles of us. The policy is to prevent internet only dealing. I can sell a new tractor to anyone, & ship it anywhere, you just have to meet me or one of our employees face to face at some point in the deal. The way I understand it, Carver Equipment delivers his tractors on his own trucks driven by his employees, thereby complying with the terms.
I even lost a deal to Carver last fall from a customer that lives about 4 miles from my dealership. The customer had even gone so far as committing to buy the tractor from me, and only backed out after I had transferrred in a FEL that I did not have in stock. Do I have any hard feelings about this? Nope, I even have the tractor in my shop as I type this undergoing it's 50 hour service.
I would be MUCH more upset as a corporation (Kubota) to hear that some dealers are hiding behind these "Policies" to jack up their prices in certain areas. Moreover, it would seem on the surface that some of the dealers discussed in this thread HAVE DISCUSSED their prices and keep them SIMILARLY HIGH to give the perception to area customers that they are "fair". Some informed authorities call that price fixing, and it is discouraged, and ILLEGAL, in about every arena of business
I can't speak for all dealers, but I have never approached or been approched by another dealer in regards to pricing. We set our own prices dictated
ONLY by our expenses.
I am not positive but I think what 66 is refering to is MAP ( Minimum advertised price) pricing policies which would be found in alot of dealer contracts. Hence the word "advertised". That type of policy dictates that you can not advertise any prices lower that that set by the manufacturer. However, it does not dictate how you sell, close deals, or give discounted prices on directly to the customer. That is actually illeagal. No manufacturer can tell a dealer how much to sell said product for... only advertise.
None of our manufacturers stipulate how we price our product. I doubt they would care much if I gave the product away as long as I paid for it.
Now as far as a "quality" dealer battling a lesser dealer selling lower than "dealer A's" profitable markup percentage. That is simple, keep rolling the way you are and keep your mark ups profitable, focus on service and customer support and you will succeed and outlast "dealer B" that feels like he needs to give it away. If a customer pins you with the question " Dealer B" said he would sell it to me for this much, why cant you match it". It is easy enough to point to the dealership, service center ect and say... " In order for us to provide you with the best service possible for the life that you own this tractor, it has to be profitable enough to keeps the lights on" .
This is what I keep telling our sales force when I hear about complaints about XXXXXXX's low prices. I have lost deals to other dealers 30 miles away over a few hundred dollars simply because I couldn't justify selling the tractor that low and not covering my costs.
To adress the specific instance here, I would imagine that the cost of doing business farther north in the winter would be much higher. I don't have to keep my lot free from snow and ice. I don't have the costs associated with running trucks in the snow & ice. I would imagine that those costs would dictate that the prices be higher.
Fire ants are all I have to worry about on our lot.
