why is dealer mark-up so high?

Discussion in 'Lawn Mowing' started by lawnwizards, Jul 12, 2006.

  1. lawnwizards

    lawnwizards LawnSite Silver Member
    Posts: 2,434

    i just got a belt (28.00) an extension spring (8.00) and a band brake (19.40) for my bobcat at my dealer. i just got through looking at j. thomas and their prices were (17.00),(3.99), and (11.99) respectively. why do dealers have such a high mark-up? also, my dealer didn't have these in stock so he had to order them same as if i had went to j. thomas... any input?
     
  2. Nosmo

    Nosmo LawnSite Bronze Member
    Posts: 1,216

    The dealer depends on local trade, has a storefront to keep up and employees on the payroll.

    J.Thomas depends on advertising to solicit business from all over the entire country. Somewhat like Wal-Mart selling in greater quantities.

    Nosmo
     
  3. lawnwizards

    lawnwizards LawnSite Silver Member
    Posts: 2,434

    i'm curious to see how much they do indeed mark-up their products. when i go to the bobcat website, it'll let me look up the part #'s but when i go to put them in my cart it says for me to contact my dealer. i'm betting atleast a 400% mark-up.
     
  4. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Posts: 2,419

    I'll take that bet. I will email you the address to send me the cash or I will accept a deposit into our PayPal account.
     
  5. lawnwizards

    lawnwizards LawnSite Silver Member
    Posts: 2,434

    what do you think the mark-up is then?
     
  6. MOturkey

    MOturkey LawnSite Silver Member
    Posts: 2,742

    I'm betting 100% markup, which yields 50% gross profit. I know that is what automotive parts used to be figured at years ago, and I suspect mower parts are similar.

    Sounds like a lot, but you have to remember the dealer is working with much smaller volume. He probably sells one belt to J. Thomas' 1,000 or more.
     
  7. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I tend to think that the genuine Bobcat parts are of a higher quality than the aftermarket parts that J Thomas sells. I have tried parts from all different kinds of aftermarket resellers and I always get a better part from the dealer.

    Usually the only parts that go on any of my mowers are the factory parts with the exception of oil and oil filters. I believe that the Purolator Pure 1 filters I use and Penzoil 10w30 oil is of a higher quality than the factory filters and oil.

    As far as belts and blades go it's nothing but factory parts there. I usually go well over 1000 hours on my Dixie belts and I see no reason to try some aftermarket junk on them.
     
  8. lawnwizards

    lawnwizards LawnSite Silver Member
    Posts: 2,434

    richard, its weird to see that location, swift creek nc. i'm used to the maryland location.:)
     
  9. UBRKIFIX

    UBRKIFIX LawnSite Member
    Posts: 18

    as a bobcat dealer i can tell you that there is NOT a 400% mark up but as a rule 40% and if its a stocking part then the dealer pays shipping to get it shipped in the pays someone to un box it check it in put it in the system,put in its location then when a customer comes in pays someone to look the part up,pull it then ring up the sales and reorder it.sooo how much has the dealer made? just my 2 cent worth.:usflag:
     
  10. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Posts: 2,419

    After income taxes, yeah, we might make 2 cents.
     

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