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View Full Version : Equipment Prices rise in a BIG WAY....


tallimeca
10-10-2008, 10:53 AM
Just started seeing some of the 09' mower programs and i'm floored.........

Rumors were 6-8 percent........more like 10-15 percent ...

mcduff48
10-10-2008, 11:46 AM
Just started seeing some of the 09' mower programs and i'm floored.........

Rumors were 6-8 percent........more like 10-15 percent ...

You hit that nail right on the head!!!!!! It looks like we'll be buying equipment for the prices that we were selling it in the past! :usflag:

jkason
10-10-2008, 11:55 AM
What lines are we talking about, here?

And what are the new margins? (If you don't mind)

I was a dealer, so if you don't want to specifically say what your margins are, just say what percentage they dropped, or remained the same, if that's the case.

topsites
10-10-2008, 12:00 PM
I am not sure I get this thread's responses talking about prices dropping,
the title of the thread said they were rising?

lawnjocky
10-10-2008, 12:33 PM
Buy now and avoid the increases. There a lot of buy now pay later promotions going on. Depending on what you need this could save some serious money. I arranged with my dealer to buy in the spring but he's getting the equipment in now to save me the increases. Guarantied sale for him and saving's for me.

mcduff48
10-10-2008, 12:57 PM
What lines are we talking about, here?

And what are the new margins? (If you don't mind)

I was a dealer, so if you don't want to specifically say what your margins are, just say what percentage they dropped, or remained the same, if that's the case.

I'm a dealer for Grasshopper and Toro commercial equipment so, I can only speak for those two lines. Grasshopper has already raised costs twice....Toro had a big price jump in August and has already warned us of another in November. As far as margins go.....on paper, they remained the same to the dealer but the bottom line cost has sky rocketed. The OEM's margin never suffers....go figure:dizzy:

fool32696
10-10-2008, 02:40 PM
If prices are going up right now their sales will all drop dramatically. The used market is being flooded with anything being used by businesses right now. At first it was just construction equipment, now it's starting to be other industries.

coolluv
10-10-2008, 03:48 PM
Commodity prices have been on the rise for a long time and that is why prices are going up on everything. Because of the super heated economies both here and abroad, inflation has been on the rise. But, unless you have been in a cave the last 6 months and especially yesterday and today.

Markets across the globe have been falling like a rock because of the global slow down and the US housing bubble that has burst. There is going to be a huge slow down in the US economy and the global economy, which will bring commodity prices down. I say wait before you buy any new equipment, the price of everything is going in the other direction now.

It may take a year before prices on mowers come back down, but they will. Oil will be steadily going down,because of the lack of demand. Its going to get worse before it gets better. But it will get better.

I think mower prices are out of control the way it is. You can buy a nice car or truck for what we pay for mowers. $8000 to $13000 for a mower is nuts. Prices for our industry are going lower and lower because of the illegals and fly by night rednecks. Try raising prices to compensate for higher gas prices and equipment prices. Its crazy.

Manufacturers will have to lower prices or they will have more inventory than they know what to do with. This economy is headed south and its going to take a few years before it comes back. All you new guys thinking your going to get rich in this business better think again. Millions of people have lost jobs due to the housing bubble, construction companies down here are dropping like flies. Construction jobs are gone and won't be back for a few years.

That just means more illegals and hacks with mowers. Hold on to your Assets boys, its going to be a bumpy ride for a few years. Getting new customers and keeping the ones you have now is going to get really hard next year. I wouldn't be making any major purchases on equipment unless it was necessary. I don't really like Mcain, But God help us if Obama gets elected.

Just my 2 cents.
Dave...

tallimeca
10-10-2008, 05:04 PM
McCain nor Obama can't turn this thing around in 4 years.

Steel prices have trippled since the beginning of the year. Some manufacturers anticipated this and raised prices this year. Others held off and now are having big jumps in prices.

The reason for the post was just to give you guys a heads up that if you NEED equipment, and can swing it now or finance it now, do it.

whoopassonthebluegrass
10-10-2008, 05:14 PM
...There a lot of buy now pay later promotions going on. ...

Haha. Cuz that's helped the US out so much as of late, no? :laugh::laugh::laugh:

fool32696
10-10-2008, 05:17 PM
Regardless of what MSRP is doing, I wouldn't worry about prices going up. Dealers will be giving away equipment this winter. Don't go out and finance something with the belief that pricing will rise, it's just not going to happen.

JimQ
10-10-2008, 05:58 PM
uhhhhhhh... It's going to happen.

Prices are on the rise due to huge increases in direct material costs.

It's the simple fact that it costs more to build the same mower this year than it did last year. It's not just because someone wants a higher margin.

The industry trend seems to be anywhere from a 5% - 15% increase.

Because the economy is so slow right now, OEM's, distributors, and dealers have a lot of old inventory. There may be some deals to be had. Other than that, prices are on the way up.

Q

Turboguy
10-10-2008, 05:59 PM
I am a manufacturer of landscape equipment. I have to agree with everything that has been said here. This year I heard little talk about inflation from our wonderful leaders but every mail delivery had a sizable price increase from our suppliers. One mail would have battery boxes up by 25% the next would have a big steel increase.

We used to go year after year without a price increase. We would find a way to improve our efficiency enough to offset any component increases. On some items we went 18 years without a price increase. Now I have to print new higher price lists before the ink is dry on the last one. We had a price increase in October expecting to hold those prices. The day the price lists came back from the printer I got a price increase from one of my vendors with one component going up $ 400.00. Our October price is being superseded by a Nov price.

I do agree with some of the things that have been said. I think a lot of the higher prices were tied to the oil prices. Plastics for example are made using a petrochemical. Everything gets freighted and usually in and out. Making steel requires a lot of high priced energy. If the oil prices continue to moderate and if the general economy continues to slow which looks likely then costs will come down and as times get tougher, people looking to do more business will sharpen their pencils. Look at some of the deals right now on trucks as an example. The prices on trucks are low because they need the business and will cut thier margins to get a sale. The same will happen in other industries.

fool32696
10-10-2008, 06:25 PM
To clarify, I didn't say that is doesn't cost more to make something. I'm just saying dealers will be giving equipment away like the auto dealers are doing with trucks. Equipment manufacturers may offer specials to move some inventory and/or dealers will cut their margins. There is no way that any manufacturer in the landscape industry will increase prices AND maintain their current level of sales. I'm just trying to say that MSRP doesn't mean much right now. In my area, businesses are already starting to lay people off and companies are selling excess company trucks for cheap. Everything sells based on economic theory. Fewer buyers means something will sell for less money. I'm just saying there will be fewer buyers for a while. Anyone that wants to go blow some money on equipment to avoid paying more later, be my guest, just don't list it in the marketplace on this site and wonder why people make lowball offers.

mcduff48
10-10-2008, 06:36 PM
Regardless of what MSRP is doing, I wouldn't worry about prices going up. Dealers will be giving away equipment this winter. Don't go out and finance something with the belief that pricing will rise, it's just not going to happen.

It already has happened! We aren't trying to use scare tactics here guys and ladies. We are just stating facts. I wouldn't hold your breath waiting for dealers to give equipment away. What you will see is that we will be much more selective in our ordering. That means that when you need something, you will need to wait for it. Just like ordering that special 4x4 truck.......waiting.....waiting. The numbers just won't let us keep everything on hand for you to choose from until something changes in the economy. In short, put up your deposit and order anything you want! Just the facts. :usflag:

J.A.G LAWNCARE
10-10-2008, 06:50 PM
when we stop buying the prices will come down or you can keep your over priced mowers in the warehouse.................................

J.A.G LAWNCARE
10-10-2008, 06:51 PM
dont need new we can work on what we have................................

Lawnut101
10-10-2008, 07:01 PM
when we stop buying the prices will come down or you can keep your over priced mowers in the warehouse.................................

Exactly. That's what happened with trucks

J.A.G LAWNCARE
10-10-2008, 07:09 PM
how do they think that a mower is worth $10,000 in the first place ?
I bought a new truck for $8900 out the door in 1994 ..

topsites
10-10-2008, 07:21 PM
I wasn't going to say it but all this is the same old year to year come on now, buy from me
because Oh nose the prices are going UP, like this is the first time I done heard this one. :p

So as far as this marketing tactic goes, if you're going to pull some BS, at the very least get your story straight,
not only is it getting old but the thread has been inconsistent since the start, folks talking in two separate directions at once...

Here's a nice one:

I'm a dealer, As far as margins go.....on paper, they remained the same to the dealer but the bottom line cost has sky rocketed. The OEM's margin never suffers....go figure:dizzy:

Does anyone see the inconsistency, or the irony in this?

Talk about the OEM's margin not suffering in the VERY sentence past the one
just got done admitting dealer margins aren't suffering either.
Granted, only on paper, you did say that.
What's the difference here, OEM's never suffer, dealers do sometimes?
But, where does this leave us again?

Besides, if Lco's aren't buying then you're not ordering, right?
Right, and what happens to the OEM prices when they receive no more orders?

when we stop buying the prices will come down or you can keep your over priced mowers in the warehouse.................................

That's right.

The flipside of the coin is we got ourselves a bunch of Lco's who know all too well the entire pricing scheme, too...
I too can set my prices as high as I want, but if the customer isn't spending the money,
if the customers keep turning me down, what happens eventually?
(three guesses, first two don't count)

Say guys, looks like we might not be the only ones freezing a little bit this winter hehe

HOOLIE
10-10-2008, 08:22 PM
Some of you are getting all worked up over this, as if you buy a mower a week or something. For as much use as I get out of a machine, paying a few hundred bucks more is not a huge deal at all.

ed2hess
10-10-2008, 08:27 PM
It already has happened! We aren't trying to use scare tactics here guys and ladies. We are just stating facts. I wouldn't hold your breath waiting for dealers to give equipment away. What you will see is that we will be much more selective in our ordering. That means that when you need something, you will need to wait for it. Just like ordering that special 4x4 truck.......waiting.....waiting. The numbers just won't let us keep everything on hand for you to choose from until something changes in the economy. In short, put up your deposit and order anything you want! Just the facts. :usflag:

Sorry it may be patriotic to buy now but I am betting that prices of mowers will come down just like I am betting that the price of gas will do the same.
Would not want to be a dealer now, if I had to buy inventory for next year.

nosparkplugs
10-10-2008, 09:31 PM
Their is very little money or credit out their to lend out, the World banks do not trust each other it's a ripple effect across the world now. Unfortantly our industry is going to bet hit hard also, in that banks that traditionaly would be willing to lend money for our equipment purchases are now taking larger risks. A good credit score, more than ever, will determine what you can get in the years to come, no more free handouts. IMO regardless of a price increase on equipment, this is not a time to be increaseing your debt, unless you must have that new mower. Yep! their are some good deals out their on equipment; however I have resistent the impulse to buy right now.

More Banks are going to fail, more homes forclosed, before this is over. I would be focusin on survival, and advertise more since many business's will be folding. Then get that new ZTR in the spring, come out with new blades a spinning.

newz7151
10-10-2008, 11:20 PM
Besides, if Lco's aren't buying then you're not ordering, right?
Right, and what happens to the OEM prices when they receive no more orders?

Nothing happens to the OEM prices. When they stop receiving qualifying orders from dealers, they start pulling the lines from those dealers, which means that the guy that bought his mower from Dealer A a year ago suddenly finds that he now has to drive 40 miles to Dealer B because Dealer A was cancelled by the OEM for not bringing in stocking equipment. Consequently, said guy is now all pissed off at Dealer A for not being able to service him on a mower he just bought last year, and Dealer A didn't really have a choice in the matter. He either 1:ordered in a bunch of equipment to remain a dealer and had it sitting on his floor until it started eating up the profit with interest, or 2: decided that he would rather be able to still scrape by during the lean times somehow and didn't order any equipment.

topsites
10-10-2008, 11:31 PM
Nothing happens to the OEM prices. When they stop receiving qualifying orders from dealers, they start pulling the lines from those dealers, which means that the guy that bought his mower from Dealer A a year ago suddenly finds that he now has to drive 40 miles to Dealer B because Dealer A was cancelled by the OEM for not bringing in stocking equipment. Consequently, said guy is now all pissed off at Dealer A for not being able to service him on a mower he just bought last year, and Dealer A didn't really have a choice in the matter. He either 1:ordered in a bunch of equipment to remain a dealer and had it sitting on his floor until it started eating up the profit with interest, or 2: decided that he would rather be able to still scrape by during the lean times somehow and didn't order any equipment.

Wow...
All right.

mowingmachine
10-11-2008, 12:44 AM
Some of you act like the manufacturers just set the price as high as possible. Not true at all. There is too much competition to play games like that. The price of a product is based on the cost plus the markups necessary for everyone to stay in business ( OEM, distributor and dealer). If the manufacturers could make the same quality product for less you better believe they would. This would give them a distinct advantage against the competition.

As far as prices going up, it has already happened and everything so far indicates that it will continue to happen. Let's all hope that the material costs start to head back down.

granddad
10-11-2008, 08:53 AM
God help us if Obama gets elected.

You've got that right Dave.

J.A.G LAWNCARE
10-11-2008, 05:27 PM
with over 40 zero turn makers they have to be making good money off a $9000 mower..................................................................................

ffemtmcd
10-11-2008, 06:28 PM
How are they expecting to raise prices like that - according to all the doom and gloomers, accounts are going to dry up due to everyone being unable to pay for lawn care, then the lawn care people go under, who's gonna buy the mowers?? Free market works folks - everytime