What is the average markup for distributors?

[MessickFarmEqu]

Kubota has a mark-up of 20% on tractors, later in the forum, it says that the markup needs to be at least 7% for the dealer to breakeven.

Not true. It varies by product line, but none of them are 20%.

Its very safe to say that on a competitive deal you pay more money in sales tax than we make in gross profit. Anyone thinking they are going to get in this business with a new dealership and turn a good profit is insane.

 

[sudh]

Not true. It varies by product line, but none of them are 20%.

Its very safe to say that on a competitive deal you pay more money in sales tax than we make in gross profit. Anyone thinking they are going to get in this business with a new dealership and turn a good profit is insane.

YIKES

So how do you keep afloat??? I think in tractors (because of shipment costs) there arent the same threats from online competitors as smaller farm equipment, unless MAYBE the person has a flatbed and is willing to drive someplace to pick it up. Even then it seems like it would be impractical.

What an interesting business you guys are in -- sounds tough....

 

[Scooby074]

YIKES

So how do you keep afloat??? I think in tractors (because of shipment costs) there arent the same threats from online competitors as smaller farm equipment, unless MAYBE the person has a flatbed and is willing to drive someplace to pick it up. Even then it seems like it would be impractical.

What an interesting business you guys are in -- sounds tough....

Actually most of the dealers posting on on this forum have a excellent online presence and have some of the lowest prices around. Its not uncommon to have people from several states over buy from these dealers. Even after shipping the price is still much lower.

I only wish we'd get some internet mega dealers up here. In canada id say were about 10 years behind the US when it comes to internet shopping for both small and large items. Alot of the blame goes to Canada Post and Couriers. Shipping rates up here are killers compared to the free shipping offered at alot of US retailers.

For a laugh, check out Amazon.ca's selection compared to the mighty Amazon.com. Same company, just 2 different countries.