Dealer dealer profits

[Anonymous Poster]

Ask yourself this question....Is it better to buy a tractor from a dealer who can be sucessful (via holding his profit margins) ..so he can have a Service, Parts and Sales Dept. that can address your needs promptly and professionally or a dealer who gives it away (profit margins) so you can feel the frustrations of having to deal with his lack of service,due to lack of profits??...as for me..Quality in the dealership is as important as the quality of the product......

 

[JoeR]

As a consumer I am unable to identify a dealer's profit margins. Yet, a resonable price and a strong reputation will persuade my decision making. I look for integrity, and a well informed dealer.

It is not my concern how much money a dealer makes. If he wants to sell, then he will be competitive. If he wants to stay in business, then he/she will put the customer first. If a dealer chooses lower profits and compensates with poor quality service, then he will not stay in business long.

Ask yourself this: How much is a dealer's reputation worth?


Joe R

 

[banjobj]

Profit is not a dirty word!!!!!!! /w3tcompact/icons/laugh.gif

 

[skipperbrown]

As I told my local dealer when negotiating my bx2200: "I want you to make a living, but I don't want you to get rich, off of me anyway!"

mark

 

[steveky]

I know they make a profit or they wouldn't be in business for long. I was talking with 4 different dealers before I purchased my tractor. One was only 6 miles from my home and is the only dealer for Stihl equipment. I've been to that dealer several times and left mad due to their arrogance and indifferent approach to helping their customers. At the dealership I purchased from the salesman offered to meet me after hours so I could drive any tractor they had and called to keep in touch. I'm not sure how good the service dept. is but the salesman did a great job of helping me decide on which tractor was right for my needs.

 

[Anonymous Poster]

Go for the price. Any dealer worth his salt is going to do warrenty work, they get paid directly from the maker and get paid at the book rate!! If you can get a good price and the people give you a warm and fuzzy jump on it. Be aware that their are alot of dealers that quote one price over the phone then forget that the rebate/shipping ect was incorrect. I recently dealt on line and got a price then made some changes two weeks later when I realized it really was a good price. The price jumped $900.00. Asked about the jump and dog gonned if the price didn't jump another $1000.00. 16 days and the price jumped $1900.00 and I am going to buy on line? Not any more with tractors, I am going to see exactly what I am buying.

 

[kyoders]

My Kubota dealer claims that the rate paid for warranty work isn't enough to be worthwhile. I overheard a conversation he was having with somebody on the phone (I was already in his office, so he knew I couldn't help but overhear), and the gist of it was, if you bought it from him, he would do your warranty work. If you didn't, he wouldn't. You would have to pay for the service, whether it was under warranty or not. He also claimed that the other dealers around us had the same policy. Since I bought it from him, I don't know how rigid the policy is. He could have been trying to get rid of a troublesome person, too. I don't know.

The "book" rate for servicing things is usually pretty close, on average. But there can always be things that make the actual time more or less. If you were consistently taking longer than the "book" time, I might be reluctant to do the work, too.

Kevin

 

[Mark_in_NH]

<font color=blue>"You would have to pay for the service, whether it was under warranty or not."</font color=blue>

In my opinion, that was a statement made by the dealer to invoke a reaction. Which it did !! You bought from him.
He can not Make you pay for warrenty work, irrelevent of where you bought the tractor. However, he can shift your repairs etc. to the back burner while he takes care of those that Did purchase from him. I find this to be a common and acceptable practice whether it is a tractor dealer or any other type vehicle dealer.

 

[skipperbrown]

In the auto industry, warranty work is considered lucative. I would imagine it is so in the tractor industry. Otherwise, it would be difficult to get dealers to do the work. Any authorized dealer will do your warranty work for you. However, you will probably have to wait in line behind the guy that bought from the shop (unless your warranty work pays more than the guy in front of you-see below).

In the auto industry, all labor work is based on standard times. Generally the guys w/ seniority get to chose from the work available for that day first. They pick the jobs w/ the standard times that they can beat. So a worker may work 8 hours but get paid for 10 std hours. I bet it is the same for tractors.

mark

 

[kyoders]

Mark,

No, he can't make you pay for the work, but is he obligated to work on it at all? I don't know what kind of agreements the dealers have with Kubota. My experience with warranties on other items suggests that an authorized warranty service provider can't refuse to do legitimate warranty work. I know I've had warranty work done on my car by dealers other than the one I bought from. But then, those were American car companies, and I've heard the "book" times are generous enough that the provider is not likely to ever lose money on the warranty work (actually, they should make at least a reasonable profit). I just don't know if Japanese tractor companies are as generous. My dealer suggests otherwise. In either event, the dealer ended up doing a pretty good deal for me, so I saw no reason to try to go anywhere else. They are only 5 miles from my house.

Kevin

 

[kbarrett]

I willingly pay for excellent service if it in fact is excellent service. In my field (technology services), how can I possibly expect my customers to pay a premium for excellent service if I'm not willing to do the same in return?

A good dealer needs to make a decent profit in order to maintain a quality experience for the customer. It's a fact of business. If you think otherwise, you're ignorant in this area.

Price is not an issue if the value is there. If I demand a premium price for mediocre service, the market will go elsewhere. If I lose money, or try to cut margins to the bone and try to provide you with the best sales and service experience, I will not be around very long.


Can I get Lexus service at a Daewoo price? If by chance it does happen, it can't be maintained for the long-term.

"Hey, I don't mind you make you making a living at this, but don't get rich on me!"

What's wrong with getting rich while serving your customers? If the dealer provides me with stellar customer service, and is able to deliver a valuable solution, I hope he does get rich! He'll be around tomorrow when I need him.

 

[Anonymous Poster]

Well Kevin I have to disagree with you. When dealers bait and switch and I have had my share of them do this to me, I get ticked, and no matter what price they are willing to sell for I don't want anything to do with them. I am on a fixed income and therefore do not have the funds to fatten a dealers checkbook on the initial sale. I do however agree with you on taking care of the dealer. If in fact you do get excellent service continue to purchase from him!! The tractor is only the foot in the door for the dealer and he should be willing to give a break when you purchase it. Then when you need a mower, BH, plow, PHD reach into the wallet and pay his price. When the tractor needs servicing belly up to the bar and take it to him. I owned my own business until health reasons forced me to quit and every time something went out the door I made money. Sometimes not a bunch but if I had the option of selling an item for a dollar more then I paid for it when I knew that person was going to the next town to price check, I felt like I got over. Not only did I make a buck but the customer left happy and hopefully told his friends and neighbors. You would be surprised when a customer feels like he got over how much the word is spread. With only a few exceptions I have not met many unpleasant salesmen. Just about every last one of them was peaches and cream until I needed them to go above and beyond. In short get the best price then evaluate your dealer of choice to see if he stands up to your expectations. If he does reward him if not move on. I think its the same in your field. The customer first goes for the price unless the "salesman" convinces him to do otherwise. For you to get repeat business the customer must be happy after the sale. If I found out the dealer made $2000.00 on my back, I personally would never again step in his place of business. The saying still holds true "Buyer Beware". Having said all this I think we are thinking alike except I feel you should not "reward" the dealer with a bonus up front, wait and see how you are treated after the sale.

 

[kbarrett]

As you mentioned, we're probably not that far apart in our opinions. However, you raised the issue of dealer "ethics" which is a differen't conversation than dealer profits.

Making a healthy profit while delivering value for that dollar is ethical. Trying to exact an excessive profit on merchandise without value, or doing the proverbial bait and switch is un-ethical in my opinion.

I would hope that we would shop dealers as much as we shop tractors. Do a little research and ask for a couple customer references in the process. Hopefully, this will minimize surprises after the sale.

Cheers!