Price Check Food for thought on JD pricing

[cowboydoc]

I talked to my brother last night and he does some contract work for the city that he lives in. He was at the city shop the other day bidding a job and they had a new 5210 MFWD, power reverser with a loader and eight foot woods box blade that was being delivered. He asked the city admin. what they had to pay for that. The admin. told him they paid $21,500 as he saw it. If JD can sell to them for that price what does that say about what the real invoice price is? Just makes me wonder if these guys are laughing all the way to the bank even when they give us so called deals off of list.

 

[JATO_RaT]

Richard, I can't comment on the price since I'm not familiar with that series. I do think however, JD is in very tough competition with more manufactuers coming up with more competitive equipment all the time. To have the luxury of selling your product at any price and still have consumers buy it is very rare. Competion takes care of that. There is a point of diminshing returns and I should think that JD would know this as well as any manufactuer. Its the old idea of raising the price of a bus ticket. At some point, you will bring in less revenue since fewer and fewer will ride the bus. Anyway, I think JD's going through some big changes, hopefully they can work out the compact tractor market and be more competitive. Rat...

 

[Anonymous Poster]

Public utilities and school districts usually get 20-30 % off list price for equipment purchases. This keeps our tax dollars down.

 

[cowboydoc]

Nazman,
Yes I have heard and seen that. But if you look at the list price from deere this is more like 40% off. That tractor would list at about $35k with everything it had.

 

[Bird]

Richard, of course I don't know anything about Deere's pricing, but I do know that years ago, the car manufacturers gave the dealers a much bigger "fleet" discount to sell cars to some governmental agencies (and some private owners who were buying large numbers at once). They don't have the BIG discounts now like they used to, but you probably do get some more than an individual. And in Texas, at least, we have some regional "councils of governments" which write specs and solicit bids for different types of equipment and then various governmental or quasi-governmental organizations can buy on those bids. When I was on the board of directors for our community water company, we bought a new Deere TLB (410E) on one of those deals at a considerably better price than we could get from individual local dealers.

Bird

 

[Anonymous Poster]

All the major tractor and automobile manufacturers have government/municipal programs. In many cases the actual pricing is at or below normal dealer pricing. Most dealers will garner a setup/assembly/delivery fixed fee per unit from the manufacturer. The dealer’s are “convinced” by the factory, they will get all this future money making out-of-warranty work to make up for the short falls.

Over 75% of the time when you bring a unit in for “warranty service”, a dealer will find something that needs repair/or suggests it needs repair that is not covered under warranty… Doing warranty service is a commodity for the dealer, and a necessity for the manufacturer.

The bottom line, only use these government pricing schedules as a shoe-in guide…The actual street pricing will be higher for you and me.

 

[Chris in IN]

Also also has a program for private contractors that do business with government agencies.If you have at least a 12 month contract you can get a fairly large discount on equipment.

 

[cowboydoc]

John, Bird, and Chris,
Thanks for the info. That explains alot about how they could get that kind of a price on that unit.

 

[utahmule]

We bought a Deere TLB 310SE last year for 38% off of list. (Fed. Gov't)

Eric

 

[Anonymous Poster]

Yes but JD is still making a profit at that !