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TimJr

1983 Allis L&G prices

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TimJr

I snapped this pic at a former Allis Chalmers dealership a couple of years ago. The dealer is closed and the building has been remodeled now. This was a sticker stuck on the inside of a closet door near where a salesman had a desk. How many would you take at those prices today?

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Notice that on a 916H, a dealer grossed $784.66. At the 18% margin, it isn't too bad - it's less now. But, you then take off the freight to get it to the dealer, the set up of the machine, the overhead of the building that housed the shop to set it up and the showroom to sell it in, the sales person trying to sell it, then the prep to get it out the door once sold, and maybe even having to deliver it. That $784.66 gets whittled down pretty quickly. Chances are, it didn't get sold for that list price. Customer probably beat up the dealer for a little better deal. Or, the dealer took in a trade in to make the deal and sat on the trade for who knows how long.Support your local dealer. He isn't likely to be gouging you, just trying to stay in business.

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Chris727

Interesting info Tim. The list prices surprised me a little. Must have been the high inflation of the 1980's as the 919 was the same list as a 2000 Sovereign. Lots of people don't realize how little margin there really is on equipment when you factor in the overhead. Anymore these days you have to make your profit on the parts and service. It bugs me a little when people online gripe about paying $7.00 to have a part shipped directly to their home, while as a dealership, we have to pay as much as $19.00 UPS charge from Vintage Parts or some other vendor only to have to explain that to the customer, especially when it's a gasket that weighs only a few ounces.

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Brettw

Chris: so true of all businesses. For instance: You get an invoice for 2 hours of mechanic's time for $150.00 or $75.00 per hour. You happen to know the guy and he tells you he only makes $22.50. What a RIP OFF!! Until you start your own business. Then you take his $22.50 and add in the burdens: FICA, FUTA, SSDI, state unemployment, workman's compensation insurance, health insurance, the cost of providing him $22.50 per hour while he is actually on vacation, potential 401K, etc. Now his actual cost to the company is more like $32-35 per hour. Next, add in the use of the equipment and tools, shop supplies, misc items just to support his environment. And then the actual environment, the shop: lights, heat, rent or mortgage, property tax, maintenance, depreciation, phone, etc. What about the person who answered the phone to schedule you? Or the person who collects your payment, on the credit card that the businesss pays 3-4% on? Parts department, so you don't have to wait an extra few days some times? How about the advertising and marketing so they can keep business coming and STAY in business so when you need them, they are there? Or when you have a warranty issue with their work they have to take care of? Or how about the hours that he is being paid for, where nothing is really going on? Between customers, or a little slow today?

It all adds up, and before you know it, they are down to a few percent of actual net profit. Sometimes, in a tough year, none at all or maybe just 1 or 2%. Who would take all of the risk and invest thousands and in some cases hundreds of thousands of their dollars for a 2% return?

It can be hard to grasp, but it is real. If a business is truly overpriced, our fair market system will weed them out. For the most part, $75.00 per hour for the $22.50 guy is not such a bad deal afterall. IMHO

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Talntedmrgreen
quote:Originally posted by yukon

thats very true i support mine every chance i get .


id="quote">
id="quote">We recently had an oddity here...a NEW local dealer! I usually do my normal online shopping, then give him a call with my part #'s. He is at or below the best price I can find online, and I'm happier to deal with a solid dealer anyway. Previously, my nearest dealer wasn't worth the effort. By the time I trained the bonehead behind the counter what a Simplicity was, I had too much time invested to make a purchase worth while.

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