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Re: Tractor dealers and old tractors

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JD Seller

01-04-2013 07:46:10

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John T where are you located??? Just about every salesman that I know around here in Iowa would love to make "tens of thousands in profit" in profit on those 200 K tractors. The truth here, is that they are not making that kind of profit. The margins have been steadily shrinking for years. The volume on the back end has been cut way down too.

Just talked to a good friend that just sold a new JD 8295R straight out, no trade. He made $3500 on the front side and will get 1.5% on the back side(that is on dealer invoice not sales or list price) So that will be about $2750 in volume. So he made $6250 or about 3.5% on the deal.

There was a time when the dealers made $3000 dollars on selling a JD 4430 new for $15,000. Those days did not last very long.

It is getting harder to make much on the front side with the larger guys taking bids from all over a state for their new stuff and then wanting the local dealer to handle all of the warranty work. Which is usually a break even for the shop at the best.

As for the dealer asking high prices for old tractors. Well I see it and usually they will get that from someone. There are any number of guys that want a tractor that have zero knowledge of anything about them but can write a check for one that is over priced easier than messing with it him self.

I had one guy that wanted a old tractor collection. He had less than zero mechanical knowledge. He would pay the dealership to come and change his oil on his old JD two cylinders. If they needed a set of points he would have them come and haul it to the dealership an have the shop do the work then haul it back. I saw one of the shop tickets where he had almost $600 in an oil change and tune up.

I asked him about it one time. We are pretty good friends. He told me he was very good at his job. He was not good with the mechanical stuff. Plus he did not like getting greasy/dirty doing it. So he said he could go and earn his SEVEN figure income doing what he liked an was good at and hire guys that where good at what they did. It just is a whole different world for some of these guys.

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Robert major

01-04-2013 21:53:52

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 Re: Tractor dealers and old tractors in reply to JD Seller, 01-04-2013 07:46:10  
I used to be A Belarus tractor dealer back in the 90's we made more selling those new than JD dealers did on their new ones. I know that was fact because A good friend that ran a green dealership told me.
Regards Robert

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John T

01-04-2013 07:53:38

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 Re: Tractor dealers and old tractors in reply to JD Seller, 01-04-2013 07:46:10  
Im in southern Indiana, BUT what I was talking about was indeed years ago when I was a used dealer........

John T

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