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Kubota: MSRP?

Discussion in 'Tractors' started by brbhan, Nov 1, 2008.

  1. brbhan

    brbhan LawnSite Member
    Messages: 14

    Made oral agreement for purchase of Kubota Garden Tractor GR 2110 and snow blower with trade-in. New equipment is on order. Upon discovering available accessories (on my own) I added them to order. I was quoted full MSRP by this guy and he was pretty stuck on his price.
    Question: Is this normal with Kubota dealers or should I dicker. Yes, I can cancel out because nothing in writing, yet. I feel that I am entitled to some consideration.

    Any thoughts?

  2. Marek

    Marek LawnSite Bronze Member
    Messages: 1,388

    I would dicker with them some , but you need to let them make some money off of the sale, alot of people buy off of just price. I would rather pay a little more for something and know that if I have a problem it is going to be taken care of and that I wont be pushed to the back of the line because I bought it from a dealer who was 500 miles away because he was a few bucks cheaper. These guys are only making 5-8 percents on smaller stuff. Thats not alot of money.
  3. lamarbur

    lamarbur LawnSite Member
    Messages: 118

    go to Kubota's web page, and build your own. Form here, you have the actual list price,, Some dealers take off 5% some rare dealers may take near 12% or so, They couldn't take anymore or they would be paying you to take the machine..
  4. brbhan

    brbhan LawnSite Member
    Messages: 14

    lamarbur and Marek:

    These are protected franchises and I assumed that their markup would be, as with anything else, in the 30% plus range in order for manufacturer to 'attract' the franchise/distributorship. Possibly, divergence from MSRP violates the franchise agreement - which is why the 5-12 range limitation on allowance.

    However, I do see your point and it was this very insight into this product line that I was seeking.

    Thank you!
  5. lamarbur

    lamarbur LawnSite Member
    Messages: 118

    The days of the 25-30% mark ups are long gone.. This is a big part of the problem. Many of us still want to "think and believe" that dealers get this type of mark up.. My in laws were Chrysler-Dodge and IH truck dealers for many, many years, IN the old days, this type mark up was traditional... Along the years, CHrysler and IH would basically keep the same MSRP and would jack up the hidden costs to dealers,, They all have done this now with the percentage a dealer can make, is shrunken dramatically,, Now you get into, micro economics 101,, does a dealer sell 20 machines at a thousand mark up each per month or 3 machines at 6500 each, give or take. A lot of dealers particularly here in the northeast,, just keep that yankee way of thinking and would rather sell one or two machines a month,, Slowly, they will go by the wayside because they will not keep up with trends.,.. You may not have to agree, however, to stay in business today, if one doesn't monitor the changing trends of that business,, you lose,.. Sounds to me to be a typical "yankee type" dealer,,.,
  6. brbhan

    brbhan LawnSite Member
    Messages: 14

    Your point is well taken, lamarbur. I am unfamiliar with practices peculiar to the industry of agricultural implements - which is what triggered my initial query. Benefitting from responses, including yours, I was able to wangle an additional 8 percent off the deal - basiclly, the sales tax.

    My initial query sought to get a feel of dicker-flexibility, based on the experienced - such as yourself.

    However, as a practicing, professional accountant over 40 years my experience with diverse businesses makes me suspect that your expressed view mistakes 'mark- up/gross margin' for 'Net taxable profit' after overhead. These are concepts that go far beyond Economics 101. No offence; I am on this site to broaden my knowledge!

    Mention of Chrysler is ironic. Even as we speak, they are on the auction block.................with no takers.
  7. yellowdoo36

    yellowdoo36 LawnSite Member
    from ny
    Messages: 2

    margins are really not what people think they are. i have been in sales for a kubota dealer for 2 years now. i never thought that the margins would be so low. take it from me, if a dealer is down off list price and says thats his bottom line he's probley telling the truth. by the time you pay freight in, shop costs, and delivery there isn't much left.
  8. lamarbur

    lamarbur LawnSite Member
    Messages: 118

    My wife also, is a CPA,, this has nothing to do with it, The old days were (gross profit) where as, after sale, a reasonable figure to cover overhead costs came out and this still left a sizable sum for net taxable profit., Today, the markup in many cases doesn't come close to covering overhead costs.,,, especially new business', new local tax increases, in MAss with prop 2 1/2 it is common to have local town pull a "debt exclusion". This is a legal way around the 2 1/2 percent tax law,,, Where we use to live a new 56 million dollar high school on debt exclusion, 25 yrs worth, can put a serious dent in sales.. MAny today are selling just to not pay floor plan and other interests. Get it off the property and "hope" things will change.
  9. CaptPat

    CaptPat LawnSite Member
    Messages: 80

    You can go to the Kubota website and price out all of the equipment you want, usually one can negotiate 10-15% off of the MSRP; most of the folks I know buying tractors are getting about that. YMMV I've found that to be a pretty good rule of thumb as well as the one where adding accessories later usually the dealer wants 100% of MSRP.

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