Dealership question

[Bnorth]

You expand your business to increase sales to be more profitable. If the bigger store is having to charge more to cover that overhead over the small store then they are doing business wrong and should have stayed small.

 

[lilduke]

In my industry the cheapest guy usually goes out of buisness. Maybe that 1000$ is for expansion and fancy cars lmao

 

[Merc63]

I asked him if he had 2 identical spec trucks that were $4k apart on the quote if he would buy the one that was $4k more and he said yes.


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Run, don’t walk. You’re dealing with a person that will tell a straight lie to your face or a complete idiot.

 

[lilduke]

Buisness like profit. What = more profit.

15% on phuk all. Or 10 percent on lots....

 

[Merc63]

In my industry the cheapest guy usually goes out of buisness. Maybe that 1000$ is for expansion and fancy cars lmao

Do you sell a product or a service?

Product and service are two different things. I would always be cautious with the “cheapest” service quote. But when buying two apples and they’re identical apples, I’ll typically purchase the cheapest.

IF this dealer is providing extra support, rip parts of display models, get you on the hill faster, quicker etc. I mean, you have to factor in that extra “service” into the price, is it worth it?

If the sales guy said the above and truly does the above, that is to be considered, but now we aren’t comparing apples to apples anymore.

With his poor explanation of more overhead, that just tells me this is a poorly run company and I’m paying for their poor decisions and or greed.

 

[lilduke]

Do you sell a product or a service?

Product and service are two different things. I would always be cautious with the “cheapest” service quote. But when buying two apples and they’re identical apples, I’ll typically purchase the cheapest.

IF this dealer is providing extra support, rip parts of display models, get you on the hill faster, quicker etc. I mean, you have to factor in that extra “service” into the price, is it worth it?

If the sales guy said the above and truly does the above, that is to be considered, but now we aren’t comparing apples to apples anymore.

With his poor explanation of more overhead, that just tells me this is a poorly run company and I’m paying for their poor decisions and or greed.

I assume hes talking to the salesman and not the owner. Maybe it equals more money in commission.

I dont know what dealer, but must be doing something right. Thats how they got big.

Its not gready to charge more than jimbo down the road that might not.be in buisness in 5 years.

 

[Merc63]

You don’t buy a larger store and increase your business size in order to be less efficient and make less money per unit than you did when you had a smaller store. Come on guys think. None of this makes any sense whatsoever.

 

[lilduke]

Maybe they are making more per unit. Maybe they make it up on volume. Maybe hes got a place in Hawaii to pay for.



Think guys. Sound like a bunch of communists here lol


Peace

 

[ABMax24]

You don’t buy a larger store and increase your business size in order to be less efficient and make less money per unit than you did when you had a smaller store. Come on guys think. None of this makes any sense whatsoever.

I agree and disagree. The common people are attracted to the big flashy dealership, and will oftern drive by the smaller one on looks alone. So many people don't understand how vehicle prices work, or interest or anything so dealers get away with it.

In another aspect (at least in construction) sometimes the goal is to get so big you take the jobs no one else can. Barriers to entry are so high you and your one or 2 other competitors set your own margins.

A big construction company on a site with 100 pieces of equipment working is making higher margins than Joe smoe with a lowbed, couple hoes and a dozer.

 

[pano-dude]

for a 1000$ spread i believe that is acceptable for sure.

big buildings big bills, while his answer of "more overhead" isn't a great one he wasn't wrong. You could potentially be talking about a 10+million dollar major center property vs a 250k property in a small town. One could argue that they move more volume so that should cover it and they likely get more dealer incentives for moving such volume. While all of that is true, your talking about a large operation vs buying from perhaps the owner himself and maybe his wife working behind the counter. With that big corporation stuff comes a hefty upper management structure, share holders, division managers, Salesmen, mechanics, parts people, Not to mention the amount of cash put up front to fill up that huge space with gear, accessories, and a parts inventory that will actually get you back on the snow in a pinch. A lot of hourly and salary employees that don't bill out on an hourly basis to cover their burden on the company but still get paid when there's no snowmobiles available to sell. I'm not trying to paint a picture of these big box stores not making any money, because they do. But there is a mountain of behind the scene expenses that cut directly into margins. Now your probably thinking well, not my problem how they run their business, thats my 1000$ and im getting the same product. So in the end your left with what is this big store giving me for the extra 1000$? While for some that may be nothing because maybe your big box store just sucks, but For me in my experience its the convenience of having major dealers 5 mins from where i live, with stock on any part that i will ever need, and an assortment of gear that they will most certainly always have in my size, on the shelf ready to go. I've also found that the big dealers give back to the local community and the snowmobile clubs a lot more in forms of cash sponsorships, donations and extra programs etc. That is not always the case but in general that's what i have noticed. And while that might mean nothing to some people its important to others and makes that 1000$ price difference disappear pretty quick. Dont get me wrong, Small and rural dealers have their place and are just as important for some as far as convenience/service quality and relationships are concerned. Just consider that perhaps that big box store isnt taking your 1000$ and putting it directly in their back pocket.

I've attached the 2023 sponsor list for vale mount just as an example. Executive sponsors 5000$+ and premier sponsors 3000$+ in cash or goods. Take a look at the big box stores, cycle works, martins, riversides, banisters, wpms, all account for at least 50k+ in yearly sponsorship to the club. and i know for a fact most are donating above and beyond the 5000 mark. Just food for thought.

View attachment 264098

Damn that's a nice sponsorship list, we get about $1500 from local businesses. Nothing from Radium or Invermere towns.
All our revenue is trail fees and a couple small grants we can apply for.

 

[jhurkot]

You don’t buy a larger store and increase your business size in order to be less efficient and make less money per unit than you did when you had a smaller store. Come on guys think. None of this makes any sense whatsoever.

Exactly this. If you lose money by growing and getting bigger you are pushing yourself over a cliff. Do you think when I’m buying inputs for my hobby farm I’m getting the same price as someone with 30,000-50,000 acres?

 

[lilduke]

Telsa doesnt even make a profit and theyll tell you the owner is the richest guy in the world...lol


Most big company dont have huge margins.


2% on 50 billion is still more than 90% on a million...

 

[RGM]

Exactly this. If you lose money by growing and getting bigger you are pushing yourself over a cliff. Do you think when I’m buying inputs for my hobby farm I’m getting the same price as someone with 30,000-50,000 acres?

The manufactures keep pushing you to buy more and more and if you don't have a 10 million dollar shop they will cut you off. Must be tough to be a dealer these days.

 

[snopro]

The manufactures keep pushing you to buy more and more and if you don't have a 10 million dollar shop they will cut you off. Must be tough to be a dealer these days.

Yes sales and service reputation are slowly being pushed away for building appeal.

 

[Cyle]

I agree and disagree. The common people are attracted to the big flashy dealership, and will oftern drive by the smaller one on looks alone. So many people don't understand how vehicle prices work, or interest or anything so dealers get away with it.

In another aspect (at least in construction) sometimes the goal is to get so big you take the jobs no one else can. Barriers to entry are so high you and your one or 2 other competitors set your own margins.

A big construction company on a site with 100 pieces of equipment working is making higher margins than Joe smoe with a lowbed, couple hoes and a dozer.

BS. I'm a small guy with a few pieces all run myself and I guarantee you I make WAY more margin myself then ANY big company makes on 1 employee/similar piece of equipment, also I make way more because an employee working by the hour is way slower then someone paid by the job, on many jobs I can assure you i'm making 3-5 times what these big guys are on the same piece of equipment. The guys running equipment at those sites sometimes do it by the hour and many times do it cheap. There is a reason why so many of them go under when they blow up big and things slow down at all, they are drowning in debt and barely making any money.

 

[Cyle]

There is no way there extra costs are that high. Let's say it's a $20k sled and the dealer makes $4k on it, you're telling me the big shop needs 25% more profit? It's all BS. I would bet the extra discount they get from moving more inventory covers any extra overhead.

Who cares if the big dealers are run so poorly there is 100 different managers, etc. Their problem for not knowing how to run a business. If you can't be competitive you adapt or you fail, that's it. I would also bet a lot of smaller ones provide way better service getting it fixed too.

I would much rather support a small business over a really big one all other things being equal. The big one's tend to forget about the little guy in the good times, and come back begging for your business when it slows down, already happened a few times.

 

[Teth-Air]

BS. I'm a small guy with a few pieces all run myself and I guarantee you I make WAY more margin myself then ANY big company makes on 1 employee/similar piece of equipment, also I make way more because an employee working by the hour is way slower then someone paid by the job, on many jobs I can assure you i'm making 3-5 times what these big guys are on the same piece of equipment. The guys running equipment at those sites sometimes do it by the hour and many times do it cheap. There is a reason why so many of them go under when they blow up big and things slow down at all, they are drowning in debt and barely making any money.

Be careful not to cheat yourself out of your end goal. If you get hurt who will make you money. If you retire, your business is worth less if it cannot continue without you. The best thing I learned in all my years of my business is it is way more valuable and easier to sell if it can run without you. It is okay to work and make that extra margin but don't count on it to survive. I purposely made less income the last few years as I put people in place to replace me. The big dealerships don't usaully put all their eggs in 1 basket and it can cost a bit more to structure like this but in the end it can be the safe move.

 

[lilduke]

There is no way there extra costs are that high. Let's say it's a $20k sled and the dealer makes $4k on it, you're telling me the big shop needs 25% more profit? It's all BS. I would bet the extra discount they get from moving more inventory covers any extra overhead.

Who cares if the big dealers are run so poorly there is 100 different managers, etc. Their problem for not knowing how to run a business. If you can't be competitive you adapt or you fail, that's it. I would also bet a lot of smaller ones provide way better service getting it fixed too.

I would much rather support a small business over a really big one all other things being equal. The big one's tend to forget about the little guy in the good times, and come back begging for your business when it slows down, already happened a few times.

Good thing there is no one holding a gun to anyones head. Go to the cheapest guy if they have anything to sell you, and they probably dont...

 

[2kDoo]

Can you order it on amazon ?

 

[cdnredneck_t3]

Yes sales and service reputation are slowly being pushed away for building appeal.

I don't understand this big flashy store front mentality. I was only in your shop once when I bought a MBRP can for my 04 Rev while doing trade school in Calgary. I felt quite comfortable in what today would be considered a little Mom and Pop shop, still do.

I see all the big Deere, Case and vehicle dealerships and think "that's why a combine is a million dollars". Customers are no longer important. Share holder value and the dividend are #1. Nobody has any money, it's all debt. The dealerships are forced to have the flashy store front and their profit is eaten up because of it. Its all cash flow now. Even if a family business can save some cash the government will call it offside and if there were to be a death in the family they would take 40% tax when that person is removed from the company. Its all BS in my opinion.