John Deere's poor dealership decision making IMO.

[ovrszd]

Yes but that should be covered, at least as a business target, by the hideous high shop labor rate that is about 3 times what the mechanic is paid.

How much does it cost to build a shop? How much does it cost to equip it? How much does it cost to keep the lights, heat and air on? How much does it cost to produce a bill and then wait on the money? How much does a "non payer" cost?

 

[Industrial Toys]

That may in fact just be chicken sheit. Maybe they had to come up with many millions to buy up those dealerships and that debt has to be paid off before the lights get turned on in the morning. It's kind of like farm land being bought around here by investors and you can't make enough money farming it to pay even the interest on the land.


I have heard a lot of good things about CAT dealers and their customer service.

 

[RickB]

So is a mechanic that can only bill 8hrs a day.

I have never worked in a shop that billed on a flat rate basis. Unheard of in my part of the world. Automotive, yes, tractors and equipment, no.

 

[RickB]

Yes but that should be covered, at least as a business target, by the hideous high shop labor rate that is about 3 times what the mechanic is paid.

What the tech gets paid and what it costs to have him employed are two different numbers.
The payments made by a dealer to a major manufacturer simply to have access to software, technical info and special tools would shock you. These costs are NOT linear based on volume, but are more easily spread by larger dealerships and especially multi store dealers.
I have spent 100% of the last 25 years employed at small, single store dealerships with <20 employees. That is not a particularly attractive business model.

 

[orezok]

So is a mechanic that can only bill 8hrs a day.

Better than the legal world. I have a friend who works for a major law firm and she told me that she was expected to bill 80 hrs per week at $350 per hr.

 

[Lineman North Florida]

My local Deere dealer wouldn稚 look up to even speak to me when I visited there 20 yrs ago. So I never went back. Have bought 4 kubota痴 since. I don稚 see why Deere has the following they do.

Around here it's parts, you have 4 different JD dealers around here within a 1 hour drive, there is a better than average chance that one of them has the part that you need , when you are down in the field that can be the difference, I'm pretty confident that Red, Blue or Orange put out a great line of tractors but they don't have near as many dealers, so therefore not a huge supply of parts to be had today unless you are really lucky, also depends on the dealer, I tried to get a price on a Kubota years ago at the one local dealer and he didn't have time for me then not so much as a return phone call with a price quote, so I have never darkened his door since, kind of like you and the JD dealer.

 

[JWR]

How much does it cost to build a shop? How much does it cost to equip it? How much does it cost to keep the lights, heat and air on? How much does it cost to produce a bill and then wait on the money? How much does a "non payer" cost?

I don't know, or need to know, what his costs of doing business are. It is a reasonable assumption on my part/our part that whatever his costs of doing business he covers them in 3 primary ways: 1) income on sales and 2) Income in the shop on service and 3) Income on parts. I have to figure that as a business man he sets his pricing in all 3 areas to cover his costs and some profit. He owns the business, he sets the prices, I complain whenever it seems high to me. But that's a side issue which I probably erred in mentioning.

THE main point of this entire discussion is that JD shoving small individual dealers out of their dealership, as they obviously are and have been for years, is harmful to the customers, harmful to the remote rural areas and nasty for those hard working dealers. My point. That's where I came in at post #64.

 

[BoylermanCT]

Better than the legal world. I have a friend who works for a major law firm and she told me that she was expected to bill 80 hrs per week at $350 per hr.

And lawyers still make their daily tee time. They have learned those are billable hours too!

 

[Diggin It]

Around here it's parts, you have 4 different JD dealers around here within a 1 hour drive, there is a better than average chance that one of them has the part that you need , ....

I have two chrome and glass Green stores in that distance, but they're both the same company. They also have about 10 other locations If they don't have a part locally, they can get one from another store, but it won't be today and maybe not tomorrow.

And no, my Blue store an hour and a half away my not have major parts on hand, but they can be shipped to me.

 

[Lineman North Florida]

I have two chrome and glass Green stores in that distance, but they're both the same company. They also have about 10 other locations If they don't have a part locally, they can get one from another store, but it won't be today and maybe not tomorrow.

And no, my Blue store an hour and a half away my not have major parts on hand, but they can be shipped to me.

If you will notice in my first sentence I said "Around here" I was strictly speaking of my area, not anyone else's area, especially the Lower Uncton , wherever that might be.

 

[ovrszd]

I don't know, or need to know, what his costs of doing business are. It is a reasonable assumption on my part/our part that whatever his costs of doing business he covers them in 3 primary ways: 1) income on sales and 2) Income in the shop on service and 3) Income on parts. I have to figure that as a business man he sets his pricing in all 3 areas to cover his costs and some profit. He owns the business, he sets the prices, I complain whenever it seems high to me. But that's a side issue which I probably erred in mentioning.

THE main point of this entire discussion is that JD shoving small individual dealers out of their dealership, as they obviously are and have been for years, is harmful to the customers, harmful to the remote rural areas and nasty for those hard working dealers. My point. That's where I came in at post #64.

It's important for any purchaser of any product to take into account "operational" costs of producing and marketing that product.

In regards to a dealership. Sales has to be profitable. Service has to be profitable. Parts have to be profitable. Service has the highest operational costs. So the difference in the hourly rate paid by the customer will be large when compared to the wage paid to the mechanic.

In my particular case, Sales improved because of increased inventory, Service improved because of increased sales, Parts improved because of increased Sales/Service and resulted in improved stocked inventory.

Our current corporate JD dealership better serves the community than the previous family owned small dealership. I saw Randy (previous family owner) the other day. Visited with him briefly about selling the dealership. With a big smile said "best thing I ever did".

In his case he wasn't forced out. He was dictated by JD to grow or they would not support him as a JD dealership. He wisely sold.

 

[JWR]

Which is being forced out.

 

[Kyle_in_Tex]

My dealership had been in business since 1937 IIRC....and they themselves bought a 2nd dealership, to stave off the demands of corporate.

Talking with the family, I don't believe they were very happy having to give up the ship.

 

[ovrszd]

Which is being forced out.

Not at all. He had a choice. Today he could own the 6 dealerships around me.

 

[Gator6x4]

Better than the legal world. I have a friend who works for a major law firm and she told me that she was expected to bill 80 hrs per week at $350 per hr.

"Laws. Overbilling clients can constitute an example of breach of contract and result in fines, lawsuits, or prison time. ... Some individuals that have been convicted of overbilling were done so under the charge of mail fraud, or under the False Claims Act in the United States."

 

[two_bit_score]

I think a John Deere Corp has a good dealer philosophy. I’ve seen threads in the past complaining about various long time, established, branded dealers who were complacent and obviously ‘had it made’. The perception was that these local single yard dealers had everything locked up in their town and had lost the customer service aspect if you weren’t a long time customer.

This complaint was usually from someone who had just recently bought a couple/ few acres and wanted a small tractor. They were excited and expected the dealer to fall all over themselves to ‘earn their business’. But those same people would complain if the steering wheel wasn’t always centered so the logo was exactly right and would go 100 miles to save $10.

Well, now all brands have bigger dealerships owning several locations with more people and larger sales teams, service teams, and all with one thing in mind - making money. Customer service is exceptional at most of these bigger dealerships now. Product selection is better, just about everything is better. But it does come at a price.

The companies are responding to consumer demand. And John Deere? Their stock is up to $191.75 which is just below their all time high of $195.85.



.

 

[ovrszd]

Well stated.

 

[beenthere]

It's important for any purchaser of any product to take into account "operational" costs of producing and marketing that product.

In regards to a dealership. Sales has to be profitable. Service has to be profitable. Parts have to be profitable. Service has the highest operational costs. So the difference in the hourly rate paid by the customer will be large when compared to the wage paid to the mechanic.

In my particular case, Sales improved because of increased inventory, Service improved because of increased sales, Parts improved because of increased Sales/Service and resulted in improved stocked inventory.

Our current corporate JD dealership better serves the community than the previous family owned small dealership. I saw Randy (previous family owner) the other day. Visited with him briefly about selling the dealership. With a big smile said "best thing I ever did".

In his case he wasn't forced out. He was dictated by JD to grow or they would not support him as a JD dealership. He wisely sold.

Well said, IMO.
Personnaly knew our last independent Deere dealer, and learned of the pressure Deere had on him to move more product. He put customers first, and helped them out in every way possible.. down machine, he provided one for them to use until the down was fixed, sold new at his cost just to satisfy the Deere pressure, and many more good stories.. but over a beer he once handed me his keys and said "take them, you can have it".
He soon sold to an area dealer with 7 dealerships. Took his talents and started his own business in seed corn, and services related to producing crops. Has grown his business and is having more fun and also appears to be doing much better servicing those farmers he grew to know and love through the Deere dealership. And he is smiling much more.

But Deere has to sell machines, and depends on the dealerships to do that for them.

Not how we like it, and I can whine just as well as so many others here.
Now whining is our modern liberal way. If we don't like something, someone owes us or needs to fix it for us.
My :2cents:

 

[RustyA]

My opinion is that is why tym ls kioti and Mahindra are getting a good foothold in the compact tractor market here in the Midwest. Not everybody wants to buy from a megadealer. These brands around here are sold by smaller dealers and you usually deal with one of the owners for sales and service. JD dealers for a three hour radius are all owned by the same holding company. Prices for sales and service are fixed so unless you change brands there is no competition.

 

[ultrarunner]

I think a John Deere Corp has a good dealer philosophy. I’ve seen threads in the past complaining about various long time, established, branded dealers who were complacent and obviously ‘had it made’. The perception was that these local single yard dealers had everything locked up in their town and had lost the customer service aspect if you weren’t a long time customer.

This complaint was usually from someone who had just recently bought a couple/ few acres and wanted a small tractor. They were excited and expected the dealer to fall all over themselves to ‘earn their business’. But those same people would complain if the steering wheel wasn’t always centered so the logo was exactly right and would go 100 miles to save $10.

Well, now all brands have bigger dealerships owning several locations with more people and larger sales teams, service teams, and all with one thing in mind - making money. Customer service is exceptional at most of these bigger dealerships now. Product selection is better, just about everything is better. But it does come at a price.

The companies are responding to consumer demand. And John Deere? Their stock is up to $191.75 which is just below their all time high of $195.85.



.

My experience is limited but Deere never had a salesperson in and was not taking appointments for the next 6 weeks due to fall harvest.

I left my business card and got did get a call back in December saying it was a great time to buy at year end... by then I had bought my KUBOTA three months prior.

The sales person said they are very busy certain times of the year and really don't do much in the hobby market...

In all fairness... the person that referred me is third generation and the family farms thousands of Central Valley acreage and said the Dealer has been great... even has customer appreciation at the owners home by invitation...

Kubota line is/was more in line with small acreage users so probably why tractor I wanted was in stock ready to go... Deere would have to order with no Demo...