Well on JD Ag equipment the dealer average cost is 77% of list buttttttt the actual cost depends on what program is in effect at the time.
Example: Corn Planter sales programs end at July for the next spring. So you have several choices. Lets say A) 7% cash discount B) 24 months financing at 1.5 % C) 36 months financing at 2.5%
These are just made up deals but this is how they look. The cost or savings of any of the options is usually real close to what the cash discount is.
The sales programs are what drive sales. The only things ever sold at "list" are attachments sold alone. These can have install cost that are high so the item has to sell for close to list.
Believe it or not the net profit on most dealers total sales volume, this is parts and whole goods sold is usually around 4-5%. This is with all of the overhead cost covered.
Parts usually average around 25% margin. The shop usually just breaks even on it labor cost and other over head but makes the store money on the parts sold through the department. The whole goods sales are not the profit center in most mainline dealerships. The "new" equipment sales over a long period of time usually are the least profitable of all of the things a dealerships sells. The parts department carries the whole store in bad times.
The sticker shock many are getting on the smaller tractors is the cost of the tier 4 engines. It can easily be $5K. Which on a $100K tractor is not as noticed as on a $20K tractor.
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