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View Full Version : How much money is a good dealer worth?


Mr.Ziffel
06-21-2003, 11:11 PM
This is somewhat of a moral dilemna or at the least more than a simple business decision and I'd like some input.

I live in a small town and have a great dealer who has taken care of me for several years with great service. Twenty miles away is a chain store dealer with whom I have no relationship and who has little to zero customer service. They both sell the same machines BUT the chain dealer's price is less. MUCH less.

I want to support the local dealer, enjoy doing business with him and in fact have bought many large items from him at very competitive prices, BUT in this case it seems there is not as much room to negotiate price with him. If I buy from the competitor I can still get service from the local dealer, BUT I still would rather purchase locally.

My local dealer understands the economics of my decision making and probably would still be glad to get my service work or purchase of other equipment in the future, but I'm sure if I don't purchase from him it will affect our relationship, at least for a while and it could actually affect it to a greater extent if he loses sales which alter his business.

In actual dollars, give me an idea of how much extra you would be willing to pay in this situation. This is a true to life scenario and I'll be making a decision soon. The machine in question retails in the $15,000.00 range.

LAWNGODFATHER
06-22-2003, 01:24 AM
When we're talking more than a few hundred, money talks and BS walks.

Ask him to match the price first.

I am all for supporting the dealers whom support you, but at times, money starts to become a factor.

Brian@ELST
06-22-2003, 03:36 AM
Well, I would bet that your local dealer gets his inventory for about the same price as the out of town guy, but for some reason wants to achieve a higher mark-up on this particular machine. Is it possible he is testing the waters with price on this machine? Are others buying this machine at his price? When I buy equipment from my local dealer I price shop with other competitors before going in. Then, if I see a dramatic difference (>5%) I let my local dealer know this and ask them to match it. They have never let me down. I tell them straight out "I can get it down the street for less, but I like you guys and I prefer to shop here and keep my business here." It's the truth and they know it. Im not a cheapskate and I don't always buy from who ever sells cheapest, but I believe in a fair deal and I check to make sure I get one...it only takes 5 minutes to call around and check. I make about $50.00 per hour when I'm mowing and I have found that checking prices has saved me money at a significantly higher rate than that!

If your local dealer won't come down on his price, at least to within a comparable price range, then I would be suprised. Most shop owners aren't stupid and they have families to feed too. Being competitive is just part of running a successful business...we both know that and I bet the dealer knows that too.

Rustic Goat
06-22-2003, 04:26 AM
It is very likely NOT true that your local man 'pays' the same as the 'chain' store.

Chain store purchases are done on a corporate level for all the stores in the chain at one time, literally train car loads (containers) of a single item, and often offered 'dating' on their purchases, meaning they don't even pay for it for 6 months. By that time, they've already sold the product, taken the money to the bank, and spent it on something else, sold that, etc. etc.

Manufacturers look at their own stores (dealers) as retailers with buying power specific to that store(s), they will only cut them so much of a deal.
This is not meant to say that every dealer is a good guy that passes on every bargain he gets to his buying public, after all, he is in business to make money too, but it sounds like you have a good rapport with this particular dealer.

Your story beats all around the bush without nailing down specifics. Don't have to tell what dealer, what particular item, but you could at least give an exact dollar figure difference instead of making us play a guessing game with hypotheticals.

You don't say if you've presented the facts to your local man, if so, his response, and is the man you deal with the actual owner?
Or is that what you meant by "he understands"?

It's your call as for where to draw the line for amount of difference being 'the' factor in your decision, $500, $800, $1200, Think I'd be trying to get the dealer out to coffee and have a 'this is my reality' chat with him, or at least get him off in the corner for a private talk.

lahanko
06-22-2003, 05:40 AM
Rustic Goat speaks the truth.
Every single deal is a new one, even if youíve purchased different items a hundred times.

kris
06-22-2003, 08:11 AM
Originally posted by LAWNGODFATHER

I am all for supporting the dealers whom support you, but at times, money starts to become a factor.

That's very true ... a recent purchase of a 9.5 honda engine for a broom we own is an example of when I went elsewhere. I always ask for the best price from our regular dealer but in this case he couldn't match it. A couple hundred dollars on a 1k item is allot.
It is also a item that would never be in the shop for service either. We would fix/service it ourselves.
A couple hundred on a 15k mower is really nothing when it comes to being comfortable knowing that if anything happens to the mower we will be looked after and a loaner would be given to us in a heartbeat for no charge.

A1 Lawn@Landscapes
06-22-2003, 09:06 AM
My question of the day is what costs $15,000 and who sells it without servicing it or at least providing you with a service location ? What if it needs a covered repair in one week?

Navig8r
06-22-2003, 09:39 AM
What type of equipment are we talkin about?
Mower? Tractor? Loader? WHAT?!?!?

I don't see too much (good quality, high end) commercial equipment at "chain stores", so I really can't begin to guess what we're talkin about here.

TELL US MORE!

I know that my Scag dealer is going to look at my machine immediately (when I get it there, not tomorrow, not next week) if at all possible. He has fixed tires for me at 5:30 in the afternoon, and always treats me like he's happy as he** when I walk in!

I buy anything I can from him.

That said.... I do not buy blades ($10.00+ from him, 7.00 elsewhere), filters (10.00+ for an oil filter.. I don't think so!) and some other items from him, simply because I feel that he is outright overcharging for these items.

I do however, as I said, buy anything from him that he's remotely competitive on, and I recommend him highly to many people.

John Allin
06-22-2003, 10:24 AM
You're going to get a bunch of different views.... the decision is ultimately yours. You're the business owner, and with that position comes the responsibility to make the decision. Gather the facts (including opinions from those individuals whos opinion you respect), make the decision, go forward with it - and live with the results.

That being said..... I find that I have a fiduciary responsibility to my company and it's employees to purchase capital items at the lowest possible price - IF all things are equal. If it is the same product from the same manufacturer - we buy it at the lower price. The dealer will still do warrantee work since he gets paid for it (although in our case, we rarely go to the dealer for warrantee labor - just parts, as it's faster to do the repair ourselves)......

Just one more opinion to throw into the frey......

65hoss
06-22-2003, 10:54 AM
There is not a wrong answer in any of the above post. There are different opinions based on business size and thought processes. Here is mine...

Are we talking a few hundred difference or thousands? I wouldn't sweat the few hundred, because if your equipment goes down if it isn't fixed real fast you could easily lose more than the few hundred. Your dealer will not fix you as fast as he would if you bought it from him. That is just life. You always take care of your customers first. You do, he has to also.

On $15,000 I consider $500 nothing. Over that it would really start to get to be a hard decision. Remember you wouldn't want someone getting someone cheaper than you to do something and then call you to service it.

Mr.Ziffel
06-22-2003, 10:59 AM
You guys have really come through with some very thougthful answers. I haven't given all the details because 1] I wanted to hear unbiased opinions and 2] the dealer does read this board, but here is some more info.

I'm looking at a 72" LazerZ XP. Yes, I have discussed the issues at length with my dealer and we are still talking and he has some more information he wants to discuss with me Monday morning.

The chain store specializes in landscape/irrigation equipment and sells mowers as a sideline, but is an Exmark Gold Star dealer, as is my local dealer. I think Gold Star is the correct designation but I may be wrong, but the point is that according to the local dealer they both have the same buying points from the distributor. Also, the chain has a mechanic who can do the work, but there is no priority and no loaners.

I've run a 60" LazerZ LC for the past three years and like John Allin [thanks for a great response John] do my own service and have never had it back to the dealer I bought it from [who has since gone out of business]. I also have my own backup equipment which will do in a pinch if necessary. Neither dealer does trades, although the local man does consignments.

I don't really want to get into specific numbers in public right now, but we are far enough apart that if I HAD to make a decision right at this minute I'd go with the chain. That's why I pose my question because I'd like to be reasonable in my expectations of how much to push in negotiations. At this point, my gut reaction is to support the local dealer as much as possible but we're going to have to get much closer on price.

Thanks again for your thoughts.

Randy Scott
06-22-2003, 11:02 AM
Just reverse the roles and see how you would feel about it, and apply that to your own personal setting.