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TRACTOR DEALERS VERSUS HOME DEPOT


Woodydel

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So I'm standing in Home Depot looking at the John Deere tractors when I spot a sign. The sign is directing the Home Depot customers to have their service requests performed by the local John Deere tractor dealer. Now, this can't be making the John Deere dealer unhappy. The local John Deere dealers seem to be stronger than ever. The small local dealer still sells the higher end John Deere tractors AND makes plenty of money selling parts and service thanks to Home Depot. This includes warranty work. I'm wondering if other brands might have missed an opportunity which would have helped their small local dealers. I believe the real money making opportunity is in the long term service and sales of parts neither of which comes cheap.
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accually from what I've heard, the small shops are quite unhappy. They have to fix all them cheep machines, wille their real customers tractors are waiting to be worked on. Yes they do make money on the warranties but the dont make a lot. Not to mention most people will and have bought the cheeper models insteed of their higher priced models. This is exactly why Simplicity pull Snapper from Wallmart when the bought it. Elon
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Woody the local JD dealer here is highly PO'ed over those box store cheapies. He already has a backlog of service work with all the L&G and Ag equipment he sold himself. Also, at our dealership, we keep five mechanics overworked servicing what we sell, and then all the box stores keep telling their customers to bring their stuff to us. Just because we Sell Cub Cadet and White along with the Smplicity line they think we service all MTD made equipment. As Elon pointed out so well, it isn't fair to the people that bought their equipment from a dealer to wait in line behind someone that bought from the box store getting warrenty work done. Just my opinion...and that of our faithful customers!
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The next time I pass by one of the JD dealers I'm going to ask their opinion. What I meant by "other brands" was actually in reference to Simplicity. There are three Simplicity dealers on Long Island. One is a bicycle shop. They don't look very prosperous. Yes they are somewhat busy but mostly with other brands. There are millions of people on Long Island. The believe the majority never even heard of Simplicity. Most seem to know about John Deere especially since there are 40 Home Depot stores on Long Island, all with John Deere tractors at the entrance. Anyway, I could be mistaken but I believe my instincts are right.
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Local Deere dealers here are PO'd as well. They lose sales, have to do the crap work on those lost sales, but they can't dump them without giving up the entire Deere lawn and garden equipment line like they were able to do with Homelite.
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If you ever had to deal with the Simplicity outfit in the Burlington, Vermont area (Small Engine Co.), you just might want to hang yourself. I hate to think Home Depot has it over them, well even the Toro guys do. They are like the three stooges on steroids, and abosolutely have no clue to our tractors. Please let me take over the Dealership up here.
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quote:
Originally posted by Kent
Warranty work is often "flat rate" and may not be as profitable...
Briggs used to call this an 'opprtunity' so to speak. But they would only pay their shop flat rate rate and no time for paper work. Tecumseh was much more receptive, they paid the going labor rate. I didn't know which was better. I refused to do warranty as even the 'no brainers were thoughh to collect on. Money first, then would pay back if any claims would be paid which weren't many. But the price of 'big box mowers' kept on coming down to the point where you can't even change the oil and sharpen the blade and not get a complaint of being to expensive. I got out of it. The back alley shop is almost non existent.
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Around here the JD dealers are also very unhappy. And I've heard of these machines being kept to the back of the priority list too. Kinda taking care of their own customers first, which I think is as it should be. Joe
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I used to be a Toro dealer.Then one day Pergament a NY home improvement chain that is out of business took the line on.They only sold the cheaper models.But that is your volume.It gave me my discounts and my traffic.I asked the salesman what the hell are you doing.He told me it is only a few models.We were a True Value so I took in their line.When I got rid of Toro I told the salesman don't feel bad Pergament will get rid of you when next year they need a cheaper price and a cleanup.I was right!!!!Next year Pergament had Snapper.John Deere did to their dealers exactly what Simplicity didn't do.Chevy sells more Cavaliers than Corvettes.Not everyone wants to spend a lot of money the small guy needs the entry level priced item too.
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Hi. All of the JD dealers I know feel they have been HAD! I can tell you first hand that warranty work is not worth doing. When someone brings a mower in that runs 15 mins and quits. Pretty soon you have 3 hrs of time in it when you discover that when the exhaust valve gets hot and sticks open. The engine dies and sets for 45 seconds, the valve cools and snaps shut. Pull the cord and it will start and run for another 15 minutes. When you finaly find it, you will get paid for maybe 35 minuites top ream the guide and lap the valve and put it together. You are not paid for troubleshooting time, only repair time. One thing you might think about. All of these companies come to dealers and tell you how wonderful it is to "GET TO DO ALL OF THIS WARRANTY WORK". BULL. If all of this service was such a get rich quik deal Wal Mart would have 15 bays fixing this stuff and would be fighting to get the work instead of forcing the manufacturers to force the warranty on dealers. In our shop we pay 30 man days of wages for service schools that we attend. Not only is the money going out for wages, non is coming in from work done at this timeThis is in addition to the 25 to 100 dollars per person we pay for each person to attend, and we are a relativly small dealership. We pay over 1000.00 per year for parts lookup software. Add this to 18,000 per year for insurance and 8000.00 per year for yellow page ads. A 1 colulmn by 2 inch ad in our local phone book is 1200.00 per year. Add this to 5 phone book companies in our area, Then add the dealer logo tag adds that you are required to run that just adding your name costs about 300 per mfr you sell for and after while it gets depressing. Add rent, advertising, lights, truck expense, salaries, interest, property taxes, etc. Then someone calls you on your 800 number which costs you several hundred dollars a month and takes a half hour of time to learn how to fix their problem themselves. Then they shop fifteen dealers to save a few pennies on their part. We have a number of people we help and are very happy to do so, in return they buy their parts from us which is no more than fair. I do not feel it is fair to spend a half hour on someones home project, time that I could be billinig in the shop and when I am done they say, "Let me check around on prices, I may get back to you. We are more than happy to help people, but it needs to be a win win deal for all involved. Let me stress I am very happy to help the people that call us, but when I do, I feel it is fair that after we address their problem, it is fair they get these parts from us. We do not deal in aftermarket parts, and if someone orders a Simplicity part from us IT WILL BE GENUINE SIMPLICITY! It is part of your dealer agreement to sell their parts, and as far as I am concerned if you hang the sign out that is what the customer should get. I don't mean to sound bitter, but I hear people complain about dealers, and I don't defend POOR dealers, BUT, if your dealer is to support you they need support from you or they won't be there to help you. I know what it is like to put in 70 and 80 hours a week and be rewarded with less money than I would be making working for someone else and getting paid overtime. To be paying people in the Winter when there is no snow and no money coming in. the costs go on. These mass merchants are ruthless and their buying power is so unbelievable that they intimidate manufacturers and every year squeeze them more and more out of them. Look at Mc Culloch and Homelite. Both were quality product sold through dealers. They fell in love with the mass merchants, their products got cheaper and cheaper every year, to hand on the the mass merchants business. 4 years ago Mc Culloch was bankrupt and liquidated in a 4 day auction. The name was sold to a Chinese company who has now sold it to MTD. John Deere bought Homelight and lost 92 million dollars on it when they sold it to a Chinese company. Snapper thought mass merchants was the way to go and was on the verge of bankruptcy when Simplicity bought it. What good does it do a company to sell tons of stuff if they can't make some nomey on it. Simplicity has turned Snapper into a profitable venture and is doing it without the mas merchants. Look at the fact that in the last 5 years 50 % of the dealers in this industry are no longer. If they were all making "millions" in it they would still be here. It is very tough to survive as a dealer and I suspect that most of you would be shocked at all of the overhead there is. I appologize if I offend anyone, but these are some things I had to say. My 2 cents worth, its free, value accordingly. Al Eden
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Well said Al. Too many people have no clue what its like being self employed. Though I'm currenttly working away from home as an employee I've spent many years making a living as a contrator. Still kinda out to lunch on which is easier.
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Al Well said speaking for sombody that worked for a mass merchant (lowe's) selling OPE i can say that not only is the quality of their product as inferior as their lumber the service after the fact sucks. We carried cub cadet and mtd branded tractors, and i cant tell you the number of times i would have to spend 1/2 hour or better with a guy that had an acre + of property and was debating on wether or not to get the $850.00 or the $950.00 dollar tractor then they would ask about snowblowers for it ect ect. I think the majority of homowners just have no clue aboutwhat they actually need to do a job. Yess some of them are cheap as hell but some just don't know. I tell people for what you want to do you need a machine that is out of our league, and i would steer them towards local dealers who have the "real" front line products. Alas in our area (boston) simplicity is not that well known but i would encourage those i could to spend as much as they could afford and try to keep it for many years. Service at our store was nearly non existant, if a customer bought a weed wacker burnt it up they would be given a new one if they BI$%^ed loud enough. OPE in these stores is a window dressing and is meant just as a way of getting people spending, and while they are buying a chainsaw they walk by those Jacusi tubs and dishwashers, and next thing you know Poof. Professionals who make their livelyhood use independant dealers for things from lumber to OPE you can't beat the service and thats what counts, it is just too bad that most people don't know or realize this until after it's too late.
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What Al said. 30 years ago, the exact same situation happened to office machinery dealers. My father did pretty well financially in that biz, and I grew up in the trade. When the Mass Merchants at that time started selling what was previously only handled by "Authorized Dealers", a good percentage of the profit evaporated. There are still today some small dealers, but with the Office Depot's ,OfficeMax's and Staples in the mix, these small, usually family-owned shops are being quickly pressed to extinction. Tacey
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If I'm not mistaken, I think the new Super Ace Hardware here in town (Commercial & Industrial center) has picked up the Simplicity line. I've seen a couple in their back lot. It seems like most of the non-JD dealers around here are dropping the domestic lines in favor of the newcomers to the market. I went to a show yesterday, and I talked with several dealers there. I knew a couple of them used to carry Simplicity at one time. I asked them what happened, they said that the Simplicity line was not profitable, and so they moved to Kubota or Kioti or Mahindra. I think its rather sad, but I guess in the spirit of business that's what had to be done. I can see where they are coming from--those foreign brand tractors are selling pretty good here.
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quote:
Originally posted by bigcountry
If I'm not mistaken, I think the new Super Ace Hardware here in town (Commercial & Industrial center) has picked up the Simplicity line. I've seen a couple in their back lot. It seems like most of the non-JD dealers around here are dropping the domestic lines in favor of the newcomers to the market. I went to a show yesterday, and I talked with several dealers there. I knew a couple of them used to carry Simplicity at one time. I asked them what happened, they said that the Simplicity line was not profitable, and so they moved to Kubota or Kioti or Mahindra. I think its rather sad, but I guess in the spirit of business that's what had to be done. I can see where they are coming from--those foreign brand tractors are selling pretty good here.
I guess it all depends on where you are. My local AGCO dealer who has been in business since 1935 selling Allis-Chalmers and surviving all the name changes over the years had decided to switch over to the Simplicity brand name last year. He told me that the company is slowly phasing out the AGCO lawn and garden line and people seem to reconize the Simplicity name more than AGCO. He said if he knew of all the name changes back then he would have switched over to Simplicity back in 1985 when Allis-Chalmers was sold to Deutz. He said his sales already have increased since he started selling the Simplicity brand. I have a Kubota dealer about 10 miles from me and priced there products, before buying my new Simplicity Conquest. I found the Kubotas were just as good as the Simplicitys but were alittle more pricier.
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So the three Simplicity dealers, one a bicycle shop, are better off here on Long Island? NO Aside from the old machines you have a hard time finding a Simplicity tractor here on Long Island. John Deere is becoming the dominant brand. If Simplicity tractors were sold by Home Depot would they suddenly become cheap junk tractors? NO What would happen if the same cheap tractor sold by Home Depot were instead sold by the John Deere dealer? Would the warranty work situation be any different? NO Would this situation be any different if the dealer had sold the tractor? Quote: "When you finaly find it, you will get paid for maybe 35 minuites top ream the guide and lap the valve and put it together. " NO Just curious that in a population of 8 million, surrounded by water, that the superior Simplicity tractor isn't dominant. Which is why I think an opportunity was missed. (NOT A QUESTION BUT YES)
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Hi, If you go to a John Deere dealer, they have a 3 sided standing sign that says in essence that if you buy the 100 series tractor you can expect X. If you go to the 200 series units you can expect that it will last X% or times a 100 series and that if you go to the 300 series it will have a life of XX% or times the 100 series. All of the dealers I know feel the 100 series is a piece of _____. They still have to sell it and warrranty it. Furthermore in our area the John Deere dealers have to go to Home Depot and uncrate and set up and prep their tractors and if I remember correctly the dealer that was telling me about this said they got paid for 29 minutes or something like that by John Deere. Deere doesn't give a dealer anything to set up their tractors. FAIR??? They say in their dealership their set-up and check over takes about 2 hrs as it does for us. They aren't going to check much for 29 minutes. Look at those tractors. They are as MTD or Murray as one can get without being MTD. About 2 years ago Warner Frazier, chairman of the board at Simplicity, told me as we discussed mass merchant markets: "YOU CAN'T OUT MURRAY MURAY". In plain words they have mastered making them as cheap and flimsy as is possible and still sell them. I don't think Simplicity would not know how to start to play in that field and the volume to break into that field on a very low margin item would make it impossible. Simplicity tried to address the high end of that market with the Express, and at 1495 people still preferred the Regent with the rest of the bells and whisles. Simplicity would not fit in the Mass merchants as we are competitive with the uppper series of John Deere which aren't in a class that fits well in a mass merchant either. They need a different type of sales support. We don't consider the Sears and Wal Mart customer our competition, people shopping there for tractors won't even look at what we have. They have damaged our used market though. A good used 4211 which will still be going after the cheapie steering system is gone is still worth more than one of those new, but many people don't look at the front axle pivot that is like a piece of exhaust tail pipe and gone in a year or two or how cheap the steering gears etc are. They just look at its new and 895.00. Our customers expect to pay to get a quality product and have a dealer TAKE CARE OF THEM. They have every right to get it. About dthree years ago in Kohler update school they told us that a certain 17 hp Sears with a "Craftsman" engine is really a 15hp CV15 spec xxxx engine and that is what we use for parts lookup. Sears buys them unlabeled and by Craftsman standards it is a 17. Must put steroids in the oil. This is called marketing. Regarding the valve repair example, it would be an engine warranty and would be the same on all equipment. The point is that as an engine dealer you have to warranty it whether you sold it or not. So when we lose money on a warranty deal for a mass merchant tractor, we are subsidising the mass merchants, not by choice. As I said before if it were wonderful, they would have 16 bays and be fighting to do the warranty work, THEY KNOW WHERE THE MONEY ISN'T! Remember this is free, value accordingly. Al Eden
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quote:
Originally posted by rs07
quote:
Originally posted by bigcountry
If I'm not mistaken, I think the new Super Ace Hardware here in town (Commercial & Industrial center) has picked up the Simplicity line. I've seen a couple in their back lot. It seems like most of the non-JD dealers around here are dropping the domestic lines in favor of the newcomers to the market. I went to a show yesterday, and I talked with several dealers there. I knew a couple of them used to carry Simplicity at one time. I asked them what happened, they said that the Simplicity line was not profitable, and so they moved to Kubota or Kioti or Mahindra. I think its rather sad, but I guess in the spirit of business that's what had to be done. I can see where they are coming from--those foreign brand tractors are selling pretty good here.
I guess it all depends on where you are. My local AGCO dealer who has been in business since 1935 selling Allis-Chalmers and surviving all the name changes over the years had decided to switch over to the Simplicity brand name last year. He told me that the company is slowly phasing out the AGCO lawn and garden line and people seem to reconize the Simplicity name more than AGCO. He said if he knew of all the name changes back then he would have switched over to Simplicity back in 1985 when Allis-Chalmers was sold to Deutz. He said his sales already have increased since he started selling the Simplicity brand. I have a Kubota dealer about 10 miles from me and priced there products, before buying my new Simplicity Conquest. I found the Kubotas were just as good as the Simplicitys but were alittle more pricier.
Down here in the South, Simplicities are not that popular--I have only seen about 5 or 10 of them in the past year or so in my area. That would explain why they have been dropped at some dealers here. I only know of one Simplicity dealer within 100 miles of here. Most of the riding mowers you see here are Murrays and Crapsmans. The nice stuff here is all JD and some Kubota.
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We sold on average 90 to 100 tractors at the dealer i worked for here in NC. If memorie serves me, the Dealer in Your county was on 96 and hadn't been there all that long.. ( Seemed like he worked out of a 2 car garage ) But that may not be the only Simple dealer in Grandville. But before I worked for a Simplicity dealer, I worked for a repair shop that didn't have much in the line of riders. We made a living repairing the old AMF's, Murrays and MTD's etc and a huge number of walk behinds. This was before Magnatron ( One thing that really helped break the back of the service dealer ) Points and related problems had been the vast amount of our work until then. But a problem I have not seen mentioned was when Lowes Hardware sold a product, and a buyer would bend a crankshaft or start it without oil, They ( Lowes ) would tell them no trouble, it is covered and send them to us. It didn't matter to them that what they said as long as it "Seemed" to put the ball in our court. And that to me was the biggest headache of all.....I feel sorry for the service dealers who have been sold out to the chains..
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Al: Your posts in this thread, particularly the longer one, were extremely eye-opening. I never it laid out like that before, and the info on what happened to Homelight, etc..., was really interesting--thank you! I would like to print a copy to show a friend of mine, who is an extremely small, (one man) authorized "repair center" (incl. warranty work!) for several lines, but as far as I know, only sells chainsaws brand new. I don't know how he survives, but I think this will be very interesting for him. I wish you every continued success, especially with your repower branding efforts, as I would hope they are a more lucrative avenue for you, hopefully offsetting your significant (though often overlooked by customers) overhead costs.... Thanks again, Peter
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quote:
Originally posted by Woodydel
So the three Simplicity dealers, one a bicycle shop, are better off here on Long Island? Aside from the old machines you have a hard time finding a Simplicity tractor here on Long Island. John Deere is becoming the dominant brand. If Simplicity tractors were sold by Home Depot would they suddenly become cheap junk tractors? What would happen if the same cheap tractor sold by Home Depot were instead sold by the John Deere dealer? Would the warranty work situation be any different? Would this situation be any different if the dealer had sold the tractor? Quote: "When you finaly find it, you will get paid for maybe 35 minuites top ream the guide and lap the valve and put it together. " Just curious that in a population of 8 million, surrounded by water, that the superior Simplicity tractor isn't dominant. Which is why I think an opportunity was missed.
Why would that be?
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Al, I just came back from looking at your fine Repower site. I read one of your descriptions about how every bolt and screw was included in your kit and the customer had his tractor repowered in no time. Picture this. Simplicity tractors are sold by Home Depot. You get the opportunity to sell your repower kits at Home Depot. Your kits end up with Simplicity's name because that's what Home Depot does. Home Depot puts your kits on the shelf in 1500 stores, because of the Simplicity connection, for the not so smart average joe. They start out small and get two for each store 3000 kits total. Not so smart average joe is walking with his wife through the store. "Hey honey, look I can get a new engine for my Simplicity tractor. Can I, huh?" Not so smart average joe has no problem installing your kit and is very happy because it is a well designed and complete kit which I'm sure emphasizes the need to add oil to the engine. Would you be happy selling your kits to Home Depot? I would be happy with just the first sale.
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The problem with that is that it costs $xx to produce those kits plus shiping to the stores. Home depot would want to buy them at cost minus 20% and no shipping charges. So to make any money Al would have to leave out half of the nuts and bolts and cut the directions in half and give no phone support to save on cost. When Home Depot finds out about the reduced cost they will demand another 20% cut in their cost.
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As I said I would do, I just came from the John Deere dealer "ruined" by Home Depot. Not likely. When I asked the sales department how they felt about Home Depot "horning" in on their sales a VERY big grin is what I saw on their faces. Quote "It's the best thing that could have happened." Joe Z. LaCorte Equipment. He had no negatives at all. He sells the SAME tractors as Home Depot. Home Depot does not sell a cut down cheapened version of the tractors. Under contractural agreement the prices are EXACTLY the same. People come to the dealer before making a purchase at the "Depot" just to check things out. Many buy their tractors from the DEALER. Warranty work is WELCOMED. They don't care who sold it. They have help wanted signs out front. They run help wanted ads in the papers. JD helps them out with their advertising to compensate for the HOME DEPOT "competition". They sell parts and accessories. Most accessories for JD tractors must be purchased from JD (aka the dealer). I tried this and it's true. Maybe it's just the NY John Deere dealers making out but I'm from NY. These people are HAPPY for the John Deere name to be spread by Home Depot.
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