Posted by JD Seller on August 23, 2015 at 19:52:03 from (208.126.198.123):
In Reply to: John Deere posted by Spudm on August 23, 2015 at 11:56:04:
The issue with stocking new equipment is one of several things.
1) There is NO standard tractor/combine/planter anymore. There are literally hundreds of options on the equipment today. So other than round balers and Mo-Cos you rarely have exactly what the customer wants. The lower priced utility tractors and compacts are more standard so most dealers that sell many of them stock them. Do not expect an AG dealer that may sell 3-4 compacts each year to have any in inventory.
2) The cost of new equipment is sky high these days. On big ticket items like 100+ HP tractors and combines the sales margin is too small for the dealer to be able to afford to pay floor planning interest on the items and still make a profit.
3) The companies DO NOT want a large "NEW" inventory on their books. It makes no difference if it is at the factory or the dealers lot it is still showing on the companies inventory cost/total. All the majors got BURNT real bad in the early 1980s when they had LARGE inventories that took YEARS to sell.
4) The companies sales promotion programs are geared towards RETAIL SOLD equipment being ordered MONTHS before the use season. An example is corn planter programs are the best in JULY for the next planting season. Over 75% of the new planters are sold/ordered in that month.
As for you not getting a price from any dealer you go to. Well I do not like it but there are programs that are only for customers in the dealer's area of responsibility. An example of this would be an additional 5% cash discount. On a $150K tractor this is $7500. (This is not made up either that is a very common amount) For the dealer to be able to use that discount program the customer has to be in the dealer's area of responsibility or the dealer has to have sold a NEW piece of equipment to that customer in the last TEN years. On some items like skid steer loaders it is even more area related. If you sell out of your area the volume for the item will go the dealer where the retail customer's area of responsibility is. No ifs and or butts about it. That volume is 3-7% of the manufactures dealer price/ MDP.
The market and manufactures are driving many changes. The truth is that there are fewer farmers every single year. So there does not need to be as many dealerships to handle that shrinking market. Also the dollars of equipment each salesman needs to sell in order to make his living is getting larger. For a salesman to make a good living (50-75K) he will need to sell over 1 1/2 to 2 million dollars of equipment each year. So he has to chose who he spends his time with. It is just a fact of life. He can not make the commissions selling $10-15K compact tractors or $5000 used equipment.
As for parts; The antique equipment guys are one of the hardest groups to deal with as a whole. The systems at most dealerships are not setup to sell parts for a 50 year old tractor/equipment. So it takes more TIME and effort to find/locate those parts. Then you find the parts, look to see if they are available, and then price the parts only to have the person to tell you he can buy it for way less used/aftermarket/Ebay etc. A few times of this and most parts guys are through dealing with the entire GROUP!!!! So they do not go out of their way for this business. Once again it is a numbers game too. With fewer stores there are fewer parts people so their time is more limited than in the past. They have to SELL x number of dollars of parts for their store to stay open/viable. That can't be done with lots of small parts orders that take lots of time. So if you want better parts service than do what work you can yourself. I look up my own JD parts 90% of the time. Even the old stuff. I then price it so I KNOW if I want it or not. I then contact my local JD parts men and order the parts. The largest majority of the time I give them the part numbers I want and they order them. The only time they have to really dig is if there is a bunch of sub numbers or kits that the old numbers convert over too. So work with the parts guys and you usually will get pretty good service.
The over riding fact is that it takes more DOLLARS of business to keep a store/dealership open these days. So you have to target where the LARGEST amounts of dollars are made at. Unfortunately that will not be an antique collector, a part time weekender farmer, or a fellow with just one 50/60/70 year old piece of equipment. In most areas of the country even full time livestock guys fall into the small profit category.
I am NOT supporting these changes I am just wanting you to understand the forces at work in most dealerships today. I am most knowledgeable about JD dealerships but CNH and others are not much different. So you/me have to "work" differently at getting what we want, than we had to in the past.
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