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GPDesign1
10-20-2008, 10:01 AM
Much has been written here lately about the coming price increases from equipment manufacturers in 2009. The anger is understandable... nobody likes increases, whether it be the cost of daycare or for a gallon of milk. But the reality is that in our current "global economy", Americans are being pressed to do more with less- All of us. To characterize manufacturers as somehow singularly greedy is to ignore the realities that we all face. With multiple years of freak-show weather, incredible fuel prices and major increases in everything from fertilizer to employee benefits, LCO's certainly have their share of stress to contend with. But trust me when I tell you this; everybody else feels your pain as well.

OPE manufacturers work in an environment much like car companies, but without the economies of scale created by high volume. Where a popular pickup truck may be produced at tens or even a hundred-thousand units per year, a popular mower may only represent several hundred, perhaps a (very few) thousand units. It's not a valid comparison. Even the big guys produce mowers virtually by-hand. There's just not enough volume per model to justify the heavy tooling or automation used by car companies. That's why they seem expensive; they're all virtual short-runs.

When you purchase a new mower, you're directly contributing to the livelihood of a real person- a Joe or a Jane in Nebraska or Wisconsin or North Carolina that built it for you with their hands and heads and hearts. Your money is not going to some imagined fat-cat lighting twenty dollar cigars with hundred dollar bills. It's going to people just like you. People who work hard everyday to create the tools you work with. I know a great number of people in this industry and they represent everything that's good and admirable about America. Industries like OPE are the backbone of the American economy. Without it, we're all out of a job.

When most people look at a mower, they just see a mower. When I look at a mower, I see steel and copper and cardboard and truck drivers and insurance bills and property taxes and cost per square foot. I see the stacks of wooden pallets your mower ships on which have increased nearly 50% this year. I see costs of forthcoming EPA mandates and increasing worker's comp coverage. I see everything from the lead in your battery to the cost of printing your owner's manual increasing, with some things going up as much as 300%.

The struggling remnants of American industry are under siege right now, brought about by government and financial institutions who're in the back-pocket of multi-national corporations. They don't give a damn about you or about your country. They've become their own countries- the nations of GE and Lockheed-Martin and General Dynamics. Don't get pissed 'cause your new Z costs 12-grand: Get pissed because Walmart sells a dozen pairs of Vietnamese socks for 5 bucks (leaving 500,000 Americans out of a job). Get pissed because your government wastes a Trillion of your hard-earned dollars every year in a vain attempt to police the world (to make it safe for big corporations). Get pissed because International bankers gamble your retirement money like it's their private piggy-bank to manipulate markets for obscene profits. They are the ones lighting twenty dollar cigars with your hundred dollar bills. Get pissed because your nation is systematically being reduced to third-world status for the benefit of an elite handful of insiders.

It'd be good for us to remember; we're all ultimately in the service business. But without a vibrant industrial base that creates real wealth in our nation, no one will be able to afford to have their lawn mowed. Then, we're all out of a job.

Just an FYI: Better Outdoor has only about 150 of this year's mowers remaining in stock. Once they're gone, they're gone. And, as much as I hate it, there will be a price increase for 2009- no way around it. I would invite you to join me in expressing your extreme displeasure to Washington, Wall Street and Walmart. If you want somebody to kick (like we do), those are wonderfully deserving targets.

:usflag:

kind regards,

gp

coolluv
10-20-2008, 06:04 PM
Excellent post. I agree with everything you said. Its a shame that we as Americans have become like sheep. We are not worried about what matters most. But we do know how many home runs Joe Blow has in his career. We don't know who are state senators are. We don't realize what this government is really doing.

Bread and circuses. Keep the masses occupied and focused on bullshit while we rob them blind. Pro Football, Pro Baseball, Nascar. I have nothing against sports, but when you care more about that then what really is affecting you life and money, thats just crazy. We are at a major crossroads in this country, and I don't really like either candidate. But the lesser of two evils is McCain. If you don't want to live in a Socialist country you better not vote for Obama. The illegals are ruining this country. Yet we sit by and let it happen. Call your Senators, get involved people, this is our country. This is not what our founding fathers envisioned, we need less government not more.

President Bush has led this country down the rabbit hole, its up to us to get it back on track. We all have a voice and we need to use it. Its not to late to turn this country around, but its getting to the point of no return. We need to wake up, fight back, and get involved. Because if we don't , its only going to get worse.



Read the book Atlas Shrugged.

Dave...

lawnman_scott
10-20-2008, 06:26 PM
I have a suggestion. It will probably save nothing, but why not end owners manual and have them available on your website downloadable. I needed mine once and couldnt find the thing anywhere so I went to the site of the maker of my mower and got one on the computer in about 5 min (after searching the house for an hour).

I know it would save practically nothing, but would bring more people to your site and may help that way. Great post by the way.

supercuts
10-20-2008, 07:50 PM
agree'd, i dont complain much about the prices of equiptment because its earning my living. an extra $1k for a mower....well, ok. it's bigger and faster, and i know the faster and more efficient i am the more $ per hr i make. so its a win win in my book. good post.

ericmcj31
10-20-2008, 08:29 PM
NOt to be a devil's advocate or nothing-but I think the greedy manufactures would be really thrown back if we (consumers) refused to purchase their equipment b/c of price increases. I don't know about you guys but I haven't received a pay raise of 10% or more during the past year-probably actually been cut by 10% due to high gas/business expenses. If everyone kinda "stretched" their mowers out a little longer, it would say something to manufacturers. Not to sound unAmerican or anything, but mower manufacturers don't care about you or me-just their bottom line-and that's what you've gotta think about. If paying more doesn't harm you, then so be it-but I think it is unfair. It pretty much (says) it all boils down to oil. I don't believe that crap either. I mean people charge astronmical (~spelling) fuel, environment recovery, etc., etc., etc.!! surcharges!! I am surcharged out!! Hey I know stuff has gone up, but to remain as loyal to my customers as possible is what I try to do. I have never seen an economy like this, I am just a young guy-but I think it is really unfair to punish Americans by making them pay higher prices! Sorry for my rant-and some may not make sense, but just had to blow some steam!

tinman
10-20-2008, 10:18 PM
Costs are costs. manufacturers have to make money. With all the different makes & models there is plenty of competition to keep pricing down.

Oh & I agree... read Atlas Shrugged

MONTE
10-20-2008, 11:14 PM
valid points on all accounts! True cost of material is higher but the manufacture's do not care about the end user or the dealer usually! They know they can find another dealer probably to pick up a line and the end user is out of luck with out a good dealer to support him! I have learned from experience on that one!

mag360
10-20-2008, 11:36 PM
Steel is down. Fuel is down. The dow is down. This warrants a price decrease. We are lowering our fuel surcharge in proportion to the lower fuel prices just as we raised it earlier this season. Machines that are yet to be manufactured should cost less to produce. If the market bounces back (as it will regardless of who gets in office---Obama most likely) and mower manufacturers can sell these usits at the increased price they will be seeing a little more profit on them than they would have without the current slump.

McCain's across the board tax cuts would put cash back in the banks and market faster than anything else but those of us in the service industry should be able to handler the slower, safer climb out of a democratic presidency better than most. Mower manufacturers are gouging just like the gas stations if they maintain price increases that were projected based on cost/economy of six months ago.

DA Quality Lawn & YS
10-21-2008, 12:02 AM
Gary - appreciate your thoughts.....I own probably one of few Quicks in southern MN and when someone asks me about the machine, I tell them first off "made in North Carolina, USA!" Then I rattle off the features:)


I DEFINITELY agree with you on WalMart (and the like). The WalMarting of America is really killing us if you think about it. Whoever is reading this post, stop shopping there NOW, you support so much wrong when you do shop there. Think about more than just yourself, which I know is hard for most Americans (me me me).

Big C
10-21-2008, 12:20 AM
So true....So true......:usflag:

brucec32
10-21-2008, 12:36 AM
I gotta agree with your post. I'm not a fan of the overall pros/cons of the global economy.

One thing however on the short production runs mentioned. While your mower designs are unique and distinct, and therefore is needed, there has to be some correlation between rising mower prices and the proliferation of mower manufacturers each making basically the same machines. Toro, Exmark, Gravely, Scag, Hustler, Dixon, Grasshopper, John Deere, Great Dane, Bobcat, Yazoo-Kees come to mind as fairly conventional mower manufacturers. I'm sure there are others. Then Everride and Bad Boy show up to the party. That's a lot of brands when you consider the designs are often very similar.

Brands like BOP, Wright, Walker fill distinct niches.

Competition is good, but at some point having too many brands means each brand sells fewer units and per-unit cost has to go up. Just the redundancy of dealer and distributor networks alone has to add quite a bit to the price. Then add to that the redundant engineering resouces, management structure, etc and one can see why mowers cost more than they might.

Ironically though, some of the highest volume models cost the most in their category. And some of the presumedly low volume brands are the most affordable. I suspect it's because they don't have the massive marketing channels to support and stick to basic proven designs.

At some point other industries consolidate to survive. With a recession progressing and credit tightening we may see that with the mower business.

tallimeca
10-21-2008, 01:47 PM
the problem is they set a price for months at a time. Because they build 100 z's this week, and now steel went down, they aren't going to build 100 at a lower price. Then the week after it tripples, so now they go way up.

These manufactures spend alot of money on market forcasts for materials and biding vendor parts. They come up with where they need to be on an average basis.

Because you have 200 gallons of home heating oil at 4 bucks a gallon in your tank and it went to 3.40, they aren't going to give you a refund......

Just the way it is.

The way I look it from my point of view is, i'll make more money selling parts and service to all the guys that go and buy used equipment vs the profit I'd make on a new. So if guys don't want to buy new, that's ok too.

Then they will get fed up with the used piece costing them down time and buy the new piece anyway.

Pick your poison.

Most dealer i've spoken with forcast a slow season and aren't stocking anywhere near what they used to. Some guys are sitting on inventory and are selling the old stuff at new pricing to to make up for the low volume of sales..........

Mean while, you guys will be loosing customers because the next guy will do it for 2 bucks less a week......

Honestly, I don't know how guys make a living JUST cutting grass . The only way I can see it is if you aren't carrying insurance, paying workman's comp, hiring illegals, and trying to fix your breakdowns on your trucks and equipment yourself. There's so much competition out there around here it's truley amazes me. Lawn care guys don't get the respect they deserve that a plumber or electrician would get. Just like in my business, people think i should charge less for working on a mower then on a car. If they only knew.

I guess we all have to hang in there. This economy is going to flush alot of crap businesses down the drain.

saw man
10-21-2008, 02:08 PM
Mower prices have not gone up that much over the years.

If you compare the price a car sold for to mowers 15 - 20 years ago you would see they have not gone up very much at all.


I dont see why everybody thinks that prices should not rise.

mag360
10-21-2008, 10:39 PM
Mower prices have not gone up that much over the years.

If you compare the price a car sold for to mowers 15 - 20 years ago you would see they have not gone up very much at all.


I dont see why everybody thinks that prices should not rise.

Auto prices have gone down this year.

nosparkplugs
10-21-2008, 11:29 PM
While the economy is struggling; it comes down to personal or business financial planning, and fiscal responsability if your living within your means, your doing fine right now.

Greed at all levels have brought down our capitalist economy, and now were going to convert to Socialism to fix it. The longer standing companies with large overhead, and expensive products are hardest hit during these times, and tend to mark up their products accordingly.

Their are plenty of manufacture's to purchase goods or service's from, those who choose to complain about these price's yet still purchase the products from those companies that's just bad business. Their are some great deals on equipment right now:hammerhead:

saw man
10-21-2008, 11:55 PM
Auto prices have gone down this year.


Good hell! I swear you have to spell everything out in this forum.



One particular Snapper mower has been selling for $499 the past 15 years! This year they finally had a price increase. Same goes for other manufacture such as Honda and Toro. Car prices have NOT stayed the same for that time frame EVER!

Over the last 20 years check any quality outdoor power product and you will see prices have not moved very much. The only thing that has decreased is dealer profit!

Everybody wants a good wage but wants others to sell to them for 5% above cost. How does that work?

These price increases are long overdue and it is nothing to whine over!!

Frue
10-22-2008, 08:28 AM
These companys have raised the prices of these machines over 45% In the last 10 years. So this means we should have been able to charge 45% more for our services right?
So this means a 100 dollar lawn should be 145 now?

So when I read these threads from manufactures writing threads about the goverment and the cost of doing business has to go up in 2009, Please dont expect me to feal bad. SEE MANUFACTURES, YOU STICK IT TO US because we need equipment but we cannot pass the cost over the customer especially in these days.

See we get concerned about passing the cost, manufactures they say screw it pass it on. I love it when they try to pass it on then blame walmart for the downward spiral of the American economy. Bop is raising prices while at the same time saying they only have a 150 left of this years model. Now that means with fuel down and steal in the toilet. They are buying cheaper material now right? o, o yea, dont let me forget the cost of printing the owners manual.

I am so tired of all the shortages, everyone is trying to create shortages so they can double the price. Like the latest one the so called SALT SHORTAGE. Next year we will have a Zero turn shortage.

Sorry to rant but if we were to raise our prices 45% in 10 years we would fired.... I think it is time to let the manufatures of equipment and the dealers know we are important too. I call a freeze on buying of new machinery, fix are own machines, and order parts over line. This sends a clear voice saying we will not take all the brunt of the pass it on .

saw man
10-22-2008, 10:28 AM
These companys have raised the prices of these machines over 45% In the last 10 years. So this means we should have been able to charge 45% more for our services right?
So this means a 100 dollar lawn should be 145 now?

So when I read these threads from manufactures writing threads about the goverment and the cost of doing business has to go up in 2009, Please dont expect me to feal bad. SEE MANUFACTURES, YOU STICK IT TO US because we need equipment but we cannot pass the cost over the customer especially in these days.

See we get concerned about passing the cost, manufactures they say screw it pass it on. I love it when they try to pass it on then blame walmart for the downward spiral of the American economy. Bop is raising prices while at the same time saying they only have a 150 left of this years model. Now that means with fuel down and steal in the toilet. They are buying cheaper material now right? o, o yea, dont let me forget the cost of printing the owners manual.

I am so tired of all the shortages, everyone is trying to create shortages so they can double the price. Like the latest one the so called SALT SHORTAGE. Next year we will have a Zero turn shortage.

Sorry to rant but if we were to raise our prices 45% in 10 years we would fired.... I think it is time to let the manufatures of equipment and the dealers know we are important too. I call a freeze on buying of new machinery, fix are own machines, and order parts over line. This sends a clear voice saying we will not take all the brunt of the pass it on .


So ordering parts online means what? It is still parts from that manufacture.

You obviously are a few bricks shy of a load with that final paragraph, and how do you know what these manufactures are paying for steel and shipping costs? Have you seen their spending?

If you have not raised prices in 10 years then you are not very smart.

mag360
10-22-2008, 10:39 AM
Good hell! I swear you have to spell everything out in this forum.



One particular Snapper mower has been selling for $499 the past 15 years! This year they finally had a price increase. Same goes for other manufacture such as Honda and Toro. Car prices have NOT stayed the same for that time frame EVER!

Over the last 20 years check any quality outdoor power product and you will see prices have not moved very much. The only thing that has decreased is dealer profit!

Everybody wants a good wage but wants others to sell to them for 5% above cost. How does that work?

These price increases are long overdue and it is nothing to whine over!!

:laugh: Snapper may be one of the exceptions but there has been a steady increase in commercial equipment pricing over the past decade. There have been new, cheaper models added into the lineup to appeal to homeowners that have subsequently caught a lot of commercial buyers as well but these are cheaper models---not the same models for the same money.

We bought a new turf tiger in 2001 for $8,000 then bought the identical model in '07 for $9450---roughly an 18% price increase over six years. Manufacturing costs (including the cost of steel) were higher in '07 than they were in '01 (or more realistically, were higher in late '00 than they were in late '06). There was economic growth during this time as well. These were good reasons to raise pricing.

With the current economic downturn and the significantly lower cost of steel '09 may not be the best year to raise prices by a large percentage. It would be wise, however, for manufacturers like BOP to keep the price increase scheduled until they sell all the leftover '08 machines---otherwise professionals and homeowners might get greedy and wait to see if they'll get a pricing decrease for early '09 models. This is important for dealers as well since most have '08 models in stock through the Fall and Winter.

I can't call you out on your statement that dealer profit margins have gone down but it doesn't seem likely. At higher pricing the dealer would make more on each sale even if the percentages stayed the same. In this area 20-22% is not uncommon---service is where much of the profit lies anyway (to my understanding) and those prices (parts and labor rate) should have gone up (although mechanics are still underpaid in my opinion). I wouldn't expect manufacturers to raise pricing from the distributer to the dealer while lowering or maintaining suggested sale pricing from the dealer to the consumer.---That, I suppose, you could spell out to me if you are knowledgeable on the process.

My company can afford price increases at this point as we have not been affected by the current scare. We are not increasing our fuel surcharge while gas prices drop to well under $3 per gallon---we are lowering the surcharge. This is easy for us because the surcharge is based solely on the cost of fuel and can change on a monthly basis. Equipment manufacturers have a myriad of expenses associated with building a commercial mower and they are not separated into surcharges that can be changed on a whim, so it's obviously not so simple for them to decide what to do with pricing levels.

Steel was used as a major factor in the pricing increases over the past 10 years or so---if it truly doesn't effect the final cost of these machines I'd be surprised.

BOP let us know a while ago that free shipping was on the way out due to increasing fuel/shipping costs. If the cost of fuel stays low they may be able to realize some extra profit on the machines if they will still charge for shipping (which I would since the shipping itself will be available at a lower cost to the consumer than in the past).

That's simply my observation, be it right or wrong. As I said, we can currently afford the increases but I don't expect them to hold out if costs/conditions stay the way they are now. If you don't feel like working on a long response just type something short in an annoyed/exasperated tone---that's what most of us do:drinkup:

saw man
10-22-2008, 11:00 AM
Every worker out there wants to get a raise every year as well. Insurance costs go up, etc.

Price increases are not from steel and fuel alone. You should be increasing your prices every year as well, even if it is only a few $ per lawn. It should go up.

I raise rent every year on a house I own, my mortgage payment didnt go up so should I leave it the same?


Tecumseh is a good example. Read up on how they are doing and see if not raiseing prices is the right action to take.

saw man
10-22-2008, 11:10 AM
I can't call you out on your statement that dealer profit margins have gone down but it doesn't seem likely. At higher pricing the dealer would make more on each sale even if the percentages stayed the same. In this area 20-22% is not uncommon---service is where much of the profit lies anyway (to my understanding) and those prices (parts and labor rate) should have gone up (although mechanics are still underpaid in my opinion). I wouldn't expect manufacturers to raise pricing from the distributer to the dealer while lowering or maintaining suggested sale pricing from the dealer to the consumer.---That, I suppose, you could spell out to me if you are knowledgeable on the process.


I dont make 20% on those machines, wish I did. On commercial Z's it is around 10%. Even smaller equipment (mowers, trimmers, chainsaws, blowers, etc) we will make under 20%

Here is an example. X manufacter recently sent us a new price list on chainsaws. Most saws had a small price increase $10 or so, our cost rose $20. Some machines stayed the same in price but our cost rose.

TrapperJohn
10-22-2008, 11:52 AM
It's easy to want to blame the manufacturer, or the dealer, or the distributor, or...

No manufacturer likes to raise prices. They don't sit on bags full of cash in a smoke filled room and cackle with glee as they crank up the price. A price rise puts them in a less competitive position, and the mower industry is very competitive.

Two things are pushing their costs up. First, is the shrinking lawn care industry. New home sales have gone flat, so there isn't the influx of new yards to mow. People are moving closer to work, into condos and the like that don't have yards to mow. The marginal and less dedicated lco's are dropping out, and putting used gear on the market. And the dedicated ones that don't drop out will be tightening their belts, repairing instead of replacing, buying used instead of new. So mower sales are dropping, while fixed assets remain a constant. Higher per unit cost.

The other major factor is higher credit costs. Large companies live on credit. They routinely borrow short term to expand, or just as part of every day business. That cost has gone quite a bit higher for them, and they can't change their business model overnight. Higher credit costs also will reduce the number of lco's that buy new mowers, from the higher purchase price to the shrinking housing market.

Rest assured that the manufacturers aren't having a very good time right now, either.

whoopassonthebluegrass
10-22-2008, 12:17 PM
Some of you are so naive. You really think manufacturers are gouging? Are YOU gouging? Did YOU jack everyone's price up this year because things were so hectic that you could get away with it?

You think a relatively small operation like a mower manufacturer is going to risk all their jobs and livelihood by squeezing you even harder during an economic crisis?

Please, please, quit acting like you have the intelligence of a lawn guy. :laugh: Use your brains, get some education on business matters, and quit your friggin' whining.

As for those of you who declare "boycott" - I suppose you forward those don't-buy-gas-on-Friday emails, too - right? Good heavens...

dchd1130
10-22-2008, 12:35 PM
Some of you are so naive. You really think manufacturers are gouging? Are YOU gouging? Did YOU jack everyone's price up this year because things were so hectic that you could get away with it?

You think a relatively small operation like a mower manufacturer is going to risk all their jobs and livelihood by squeezing you even harder during an economic crisis?

Please, please, quit acting like you have the intelligence of a lawn guy. :laugh: Use your brains, get some education on business matters, and quit your friggin' whining.

As for those of you who declare "boycott" - I suppose you forward those don't-buy-gas-on-Friday emails, too - right? Good heavens...

Good post.

If your costs go up you have to raise your prices. Every end of this business is competitive. None of us are doing it as a charity. Stop whining and do what you have to do to keep your operation going.

DaughtryLC
10-22-2008, 01:22 PM
As a fellow NC, I feel your PAIN, and agree with you 100%!!!!!!

regl
10-22-2008, 03:05 PM
Gary - appreciate your thoughts.....I own probably one of few Quicks in southern MN and when someone asks me about the machine, I tell them first off "made in North Carolina, USA!" Then I rattle off the features:)


I DEFINITELY agree with you on WalMart (and the like). The WalMarting of America is really killing us if you think about it. Whoever is reading this post, stop shopping there NOW, you support so much wrong when you do shop there. Think about more than just yourself, which I know is hard for most Americans (me me me).

So what are you going to do, go barefoot? Even LL Bean's Traditional hunting boots are made in China. You can still buy a mower made in the US, But you will burn a lot of Foreign gas , driving around looking for American made clothing. I do my best to buy American, but I can't afford $40 for a tee shirt.

mag360
10-23-2008, 11:26 AM
Good post.

If your costs go up you have to raise your prices. Every end of this business is competitive. None of us are doing it as a charity. Stop whining and do what you have to do to keep your operation going.

Agreed.
What I'm getting at is if costs didn't go up as much as projected, and some costs went down, what is the smart move for the manufacturer? Can they maintain projected price increases with the current economic downturn? Do they hold on to the increases and see if things get better by spring or do they adjust based on what the actual costs have become? There is potential that, based on economic conditions, they won't be able to sell machines at higher pricing or even at current pricing---do they offer rebates and incentives to the dealers (as chrysler did in the auto industry) in order to keep them (the dealers/distributers) afloat and move merchandise?

brucec32
10-24-2008, 03:03 PM
As for some of these other comments, it's shocking how so called "entrepreneurs" fail to understand basic market economics. The price is what the market will bear. You have no right to "low prices" or whatever price you declare is correct. All else being equal, those who price higher than market price won't sell as many units. Those who through efficiencies are able to sell profitably at lower prices will prosper. If you don't like the price, don't buy it. Some dealers may offer better service and convenience as an inducement to pay more than you might at another dealer. Some slash service and overhead and can sell for less. The consumer makes the decision to buy or not, but NOT what price he gets to buy at.

These comments display a fundamental misunderstanding of how markets work. There is no "price God" that says what is "fair" or not. Trying to inflict that sort of top-down approach has always led to market shortages and misallocation of resources. When your local dealer has unsold mowers parked on the floor, the parking lot, and on the roof, he'll lower his prices. Until then if he's moving units then THAT is the 'correct' market price.

People make money by pleasing their fellow man to the degree that they want their good or service more than they want that amount of dollars. It's not very hard to understand. If the mower's "worth it" to you, you'll pay the price. If not, you'll find a substitute.

mag360
11-25-2008, 11:40 PM
http://www.lawnsite.com/showthread.php?t=253689

This is what I was suggesting would happen.

djagusch
11-26-2008, 11:05 AM
I think what you are seeing is that he wants to reduce his inventory over the winter so he doesn't need to pay interest etc on the units. He probably took his cost and subtracted his interest payments to March and said here's the price. He'd rather sell them and reduce his overhead (interest, storage, etc) to us at a reduced price than pay the bank the money.

Lets say you bought too much fert in June for your customers and your sitting on $1000 of fert going into August. I would call my customers and say hey I got can save you XXX on your application would you like this, its a one time deal. I would get rid of my inventory instead of sitting on $1000 of fert. This is what quick is doing but he also is paying interest and probably for storage on the units (and talking alot more dollar in equipment).

It's a good business practice and will help him get through the off season.

GPDesign1
11-26-2008, 11:58 AM
This is what I was suggesting would happen.

Chip: It's not 2009... yet.

I'll admit it... my crystal ball has a huge crack in it. :confused: I would have never guessed that gas would go from 4-bucks to $1.75 in a month. Would also have never guessed that nearly all commodities would have fallen through the floor in the same amount of time. Who knew?

In this environment, trying to project prices for the next twelve months is pretty tricky stuff! But, I've got it narrowed down to a range of $50 to $15,000 per mower. :laugh:

The FED has now sprayed $7.5T on this inferno (1/2 of GDP) and the flames just get higher. Could it be that a 1% Fed-funds rate and more inflation is not the answer? I dunno; ask Peter Schiff what he thinks? :dizzy:

I suspect that if foreign debt holders get tired of subsidizing our consumption (over 50% of our debt) and decide they'd rather hold onto something a little more solid than Treasury Paper, the dollar may outrun the Euro in their "race to the bottom". If that happens, look out below. :hammerhead:

So please tell me, what's it gonna be: hyper-inflationary recession (a government-driven gross expansion of the money supply and the resulting currency devaluation with rapidly rising commodity costs and soft demand due to rising unemployment)? In that case, prices will go WAY up as Federal Reserve Notes become like Monopoly money.

Or- Is it gonna be a good old-fashioned, 1929-style deflationary depression (sharply contracting money supply with rampant unemployment). Lawnmower's at 50 bucks- the problem; no one would have the 50 bucks.

Or: is it going to be something in the middle? Nobody knows, most especially me.

Two things I watch closely: Interest rates (artificially low rates signal inflation). And unemployment figures. Don't pay any attention to the government's watered-down, feel-good U-3 measure. Look at U-6 which is currently at 11.8% and pointed straight up. In the end, it's all about people having jobs that pay a living wage.

stevenf
11-26-2008, 12:37 PM
Just based off of this year alone, What do you expect the markup to be on the Quicks?

MnDLawn
11-26-2008, 12:41 PM
The Chinese need to relax on using steel. They are the reason steel cost are so high.

"In just the next 10 years China will consume about as much steel as the US did in the entire 20th century, when it was the world's industrial powerhouse."


http://www.theaustralian.news.com.au/business/story/0,28124,24226011-14743,00.html

ryry278
11-26-2008, 06:38 PM
We'll i don not chime in much in heated political discussions but I know from a research background, am in my junior year of college (business communication and leadership), that very, very few of our products are solely made in America. Even if it says made in America 98% chance that some if not the majority of the parts in that are from a foreign country. All ya'll who drive your ford and chevy trucks and think your supporting America, well hate to inform you that more then likely it was just assembled here, but every part came from another country like Chine. Why do people not understand we are transitioning into a more service economy and dealing more technological and medical field? As far as Wal-Mart is concerned I use to hold the same negative opinion, but wanting to support my evidence with solid reliable facts I found that Wal-Mart, while can hurt small business, also provide many jobs to communities that would not have survived without it. They offer people the chance to afford things they regulary could not afford. Where do you possibly think you could shop that sells only America goods! Target is no better or k-mart or Sears or anywhere they all sell the same products.

ucfbrian
12-01-2008, 09:07 AM
Everybody is hurting this year in any business, from the manfacturer, to the dealer, to the end user. We are all feeling the pain from the increases in prices. I am a Husqvarna Dealer in the central florida area and our sales are down 30-50% over the past 2 years and basically right now we are making enough to keep the door open and service the customers we have. We have done a lot of diversification over the past year to keep the business going and in the process have gained a large customer whose industry is booming.
Not to be the bad guy in this bad economy, but to make more sales I have had to take advantage of the misfortune of some of our other dealers. We have had a few other dealers in our area have to close there doors and I have been able to get inventory from them at discounts of up to 25% over the cost of what they paid for them a year ago. For example, I have 2 Husqvarna IZ4819's which are 2007 models, unchanged from the current year model and still come with full factory warranty, last year they would of cost me about $5300 to purchase them from the distributor, I am now selling them for $4700 to the customer and still making a decent profit. I have talked to dealers all over the country and we are all hurting right now, but it is up to us, not the government or anyone else, to make sure we can keep the doors open and keep servicing the customer.
Yes, prices are going up right now, but if you shop around you can find some great deals to be had on machines that dealers have in stock. Getting rid of the machines that we have now will help keep your dealers running in these hard time. I do not know what the other manfacturers give for floor planning, but most dealers have 6-12 months to sell a machine before they have to pay for it. Machines we have paid for are tying up our cash flow and make it hard to keep operating. Why pay a premium for a new model, when you can make a great deal on a left over machine and still get the same warranty and keep your dealer going.

Groomer
12-01-2008, 09:32 AM
I think its wonderful how so many people became so much smarter after Al Gore invented the internet.

Richard Martin
12-01-2008, 11:06 AM
I dunno; ask Peter Schiff what he thinks? :dizzy:

Peter got it right right up until about 2 months ago. His track record since then has been awful. Foreign stocks have crashed, gold has crashed and the Dollar has worth again. Schiff said stocks and gold were the places to put your money and the Dollar would crash. We're in uncharted territory here and even the best of the best can't predict what will happen next. I wonder what would happen if India lobbed a few nukes at Pakistan?

tallimeca
12-01-2008, 05:11 PM
Great post UCFBRIAN.

I have to laugh at some posts when guys are so quick to say because manufacturers prices went up, the dealers are making more money. Hahaha.

It seems every year my profit margin shrinks and shrinks. Yes, prices go up, but we aren't making any more profit. It's the opposite.

My salary certainly hasn't increased in 4 plus years but a 36" walkbehind has gone up in retail almost 1k bucks. Meanwhile my bills are my house have gone up.....i pay gas prices too.

Just because costs went up, profits certainly didn't. UCFBRIAN hit it right on the head. If you need product, it's out there. I have units that haven't changed from 08 to 09 that i could mark up to the 09 pricing and make more money on, but i'm not. I'd drather keep my regular customers coming back. They know i don't make the prices and if anyone has any brains, they know what's going on in the world.

Auto prices didn't come down, sales are just so bad that the salesman are willing to cut their commision down to make something rather than nothing. Aside from the big chain dealerships, most dealers dont' work on commision. Buying a mower is not like a car. If you are paying 30k msrp for a car, you can get it for say 27500, because that's what the interenet told you that's the average price people are paying for it, which means a dealer can sell it at that price and make money on it.

You can't knock 2k off the price of a z if you are selling them at promotional price.

I don't think guys have any idea what dealers pay in freight to get the stuff here. 150 dollars per Husqvarna tractor as of this morning....... I almost pooped my pants. Not even worth selling .

mag360
02-24-2009, 12:23 PM
Chip: It's not 2009... yet.

I'll admit it... my crystal ball has a huge crack in it. :confused: I would have never guessed that gas would go from 4-bucks to $1.75 in a month. Would also have never guessed that nearly all commodities would have fallen through the floor in the same amount of time. Who knew?

In this environment, trying to project prices for the next twelve months is pretty tricky stuff! But, I've got it narrowed down to a range of $50 to $15,000 per mower. :laugh:

The FED has now sprayed $7.5T on this inferno (1/2 of GDP) and the flames just get higher. Could it be that a 1% Fed-funds rate and more inflation is not the answer? I dunno; ask Peter Schiff what he thinks? :dizzy:

I suspect that if foreign debt holders get tired of subsidizing our consumption (over 50% of our debt) and decide they'd rather hold onto something a little more solid than Treasury Paper, the dollar may outrun the Euro in their "race to the bottom". If that happens, look out below. :hammerhead:

So please tell me, what's it gonna be: hyper-inflationary recession (a government-driven gross expansion of the money supply and the resulting currency devaluation with rapidly rising commodity costs and soft demand due to rising unemployment)? In that case, prices will go WAY up as Federal Reserve Notes become like Monopoly money.

Or- Is it gonna be a good old-fashioned, 1929-style deflationary depression (sharply contracting money supply with rampant unemployment). Lawnmower's at 50 bucks- the problem; no one would have the 50 bucks.

Or: is it going to be something in the middle? Nobody knows, most especially me.

Two things I watch closely: Interest rates (artificially low rates signal inflation). And unemployment figures. Don't pay any attention to the government's watered-down, feel-good U-3 measure. Look at U-6 which is currently at 11.8% and pointed straight up. In the end, it's all about people having jobs that pay a living wage.

nice. .