New box blades and other small equipment

A buddy of mine wants to start selling new box blades and
other small equipment . What do you guys think would be the
best brand for him to sell? We do not have a dealer for the
smaller equipment except TSC and Gebos here in Texas we'll
at least the town we live in. He would like to sell equipment
cheaper than they do. He does not mind buying a truck load.

Well I wish him luck. HE will find out real quick that there is not the margin in equipment everyone thinks there is.

Him buying a semi load is not going to get him much of a "break" in price. Buy Maybe $100,000 and maybe get an extra 5% discount or maybe even just free freight.

So he more than likely will find out he will not be able to sell as cheap as the big outfits do. He may even have to give MORE than they can sell them for. They will buy a few million dollars worth and get may be a 10-15% discount.

So lets say he buys a truck load of box blades and rear blades. He gets 50 items on the truck. 50% each. So that would be 25 box blades and 25 rear blades. So the box blades sell for an average of $600 with a clear profit of 10% or $60. Then the blades sell for and average of $400 with the same profit 10% or $40.

So he would gross $15,000 on the box blades and $10000 on the rear blades. If he clears 10% then he would have made $2500 for selling fifty pieces of equipment. That will be real close on the items your talking about. They do not have high margins on the low end stuff.

Here is my question: How long would it take him to sell fifty items??? Remember your in a smaller town and will not get 100% market share. The TSC and others will set the high price so he will have to be lower if he is selling the same quality stuff.

Also would he be able to take a credit card???? If he does that can cost him an easy 3-4% of the gross sale. HE would have to handle sales tax too. He would pay the credit card handling fee on the tax amount too. How would he recoup the card fee??? I bet that TSC and Gebos don't pay that high of a fee and don't charge the customer anymore for using a card.

I am all for anyone trying to make a buck but I want you and him to think about all of the cost involved in selling equipment. The odds of being successful in the low end market going against the big retailers are very low. He might be better off to sell a little higher quality brand and make a little better margin. He could then up sell the product rather than just having a cheaper low end item that is the same quality as what TSC and Gebos sell.

Tell him to keep his day job.

The thing of it is that TSC and other box stores are selling brands that are about in the middle of the road in quality. So to really compete he would have to sell the same quality at lower prices. Going to be hard to do. So the next option is to sell junky stuff at lower prices. Well most of us know that's going to come back around and bite him in the butt. So the 3rd option is to sell better quality at higher prices. That's going to take advertising and salesman ship. Can he do it? Maybe. Can he make a living at it in your area is the real question. Can he afford to become a dealer for the better equipment? To be a dealer the company is going to require a store front as such with the ability to load and unload trucks. He might be better off trying to become a dealer for some brand of utility tractor like Kubota and sell implements too.

Rick

First just read JDs comments.. I have been a KUBOTA dealer for 22+ years and have had good short line companies for implments since Kubota does or for most part offers no implments. we have had Land Pride, Woods, TaylorWay and several what I call cheap lines. If he wants to get the real what I call service station or no brand box blades and graders he will find the quality will kill the sales and he can,t compete with a dealer that is selling/buying half million a year in products from the larger impmlment folks. Tell him to find something else to do with his money.

We have a local 1 man operation. He mostly buys and sells old tractors but has implements also. Before TSC came to town he was the only place around other than the big dealers.

He has a Howse 5 foot cutter by the fence right now. 55 hp gear box and 12 gauge deck. Sign says $795

Compare that to the TSC CountyLine cutter with 45hp gear box and 14 gauge deck for $899.

It is all about the price.
I bought a 5 foot box blade last year for $ 600, Woods brand. High quality, heavy duty. I bought it from a NH dealer. List price for that Woods box blade is $ 900 I believe.
The TSC box blade was $600 only lower quality. If your buddy can get a fabricator to make some of it then he could do even better.

(quoted from post at 01:55:27 01/20/14) A buddy of mine wants to start selling new box blades and
other small equipment . What do you guys think would be the
best brand for him to sell? We do not have a dealer for the
smaller equipment except TSC and Gebos here in Texas we'll
at least the town we live in. He would like to sell equipment
cheaper than they do. He does not mind buying a truck load.

Click to expand...

JD made some very valid points.
Here are a few more things to consider....Everyone in your area already knows TSC and Gebos sells that kind of stuff. How is your friend going to let everyone know he's selling equipment? Advertising costs money.
How is he going to sell at a lower price when he'll likely have to pay a higher price than his competitors?
Has he talked to his insurance agent, accountant and lawyer yet? He should talk to them before doing anything.
I see a problem with his plan. Seems he wants to go after the price shopper. The problem with that is those people have no loyalty to the dealers. They'll go wherever they can get the best price.

On top of what JD and jm said, just wait intil a weekend warrior stickes his finger in the angling hole to see if it is lined up and then moves it some more and cuts his finger off. That guy will own his house and all his future income.
This sounds stupid, but people are sue happy nowdays.
Loren, the Acg.

Even IF someone could make a go of this somebody has to be there all the time (almost no exceptions) to take care of sales opportunities and service/parts issues.
I agree with the others, there is no way to compete with TSC, etc. Even John Deere dealers have the Frontier line.