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Honored Advisor

Markup question

Just curious:I closed my account at our londstanding NH dealership today.  The owner had refused to waive a restocking fee on a part his parts department had ordered wrong.  By the time we realized it, the 15 days had passed, and out of the $2200 parts order, this was about $300-350, if memory serves me right. 
 
We re-orderd;the right part, got the baler redone, with new cogs and chains.   This was a triple cog or sprocket.  The mistake they made was between the silage special and the regular baler of the same model. 
 
The owner kept getting up in the middle of things, and messing it up.  SIL had taken back the original part, got it all worked out, and Mike had been expecting a credit on our next statement.  He had even been in the dealership a week or so ago, to talk about it, and picked up several hundred dollars' more stuff like net wrap. 
 
Anyway, I had a bill that had arrived last week, and my OCD to get it paid was going DING-DING!No credit on it.  Owner told Mike he'd have an answer by Friday, then Saturday.  When Tuesday rolled around and no answer still, I said to call him and get his final verdict. 
 
He wasn't willing to come off of his restocking fee BS, so I said to get my final balance on the account, to reflect everything charged since the statement, and tell them I would be picking up my part today.  Wrote the check as "Final balance on account" and drove up there this morning. 
 
Frist, they couldn't find my part.  Then, once I got it, and had paid the account, I told the parts guy we had enjoyed doing business with him, but we were closing our account.  He was apologetic, and I said it was nothing personal. 
 
Owner's son tapped my elbow on the way out the door and asked how I was doing.  I said, "I am done."
 
I know we are far from their biggest customer, but had done about $20,000 in cash business so far this year.  Had an order in my hand for ten more baler parts yesterday, but replaced this tightwad with fifteen seconds of Internet searching for another dealership, and ordered from them instead. 
 
Just my curiosity, but how much of a percentage markup do dealerships earn on parts? 
 
My point to Mike was that this one wanted to retain his profit, on a part his staff had ordered wrong, and make us eat that loss.  I decided to eat the whole thing and take my business elsewhere.  On principle.
 
Price of my principle was less than $200...I can sell the thing on eBay, or make an office doorstop out of it. 
 
Am I right about that margin or not?
 
 
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12 Replies
Veteran Advisor

Re: Markup question

I don't know what the markup is but they certainly should not charge a restocking fee when it's there messup
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Honored Advisor

Re: Markup question

Precisely,,,plus, exoected us to eat the UPS charges for returning it, after the guy said he was going to get the rep to pick it up. We had picked up the $2200 order to start with, because of the weight being cost-prohibitive to ship.
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Senior Contributor

Re: Markup question

My new Holland tractor is getting some hours on it and it is needing more and more parts. All four dealers i have tried suck compared to Deere. Some of the parts people are very knowledgable. I think part of the problem is they have to many variables of each model. And their computer parts breakdown are no where as good as jd or case ih. I may try to trade that tractor this winter. Getting the correct parts are a pet peeve of mine.
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Honored Advisor

Re: Markup question

Haying equipment is a special sort of purgatory. This particular baler model number goes to a regular round baler, but also to a baler capable of handling high-moisture hay, which we call " haylage".

That second one is the " silage special", and the differences I have heard rumblings about i volve 80 chains and 100 chains, and correspondingly sized cogs or sprockets, including this triple one. SIL spent thebetter part of a week getting the right parts swapped in and out, but the dealer was adamant about this one...our problem.

I simply refuse to give him 35% plys ups to restock it. I believe that is his margin...the manufacturer is backing the rest. This us a very popular NH baler in our region, so not a big deal to a company that big to have this part on hand for it...it is just this old man refusing to admit he ordered the wrong one.

Mike has been distracted about the thing, fussing about not hearing an answer, then unhappy in general with being treated unfairly. I had heard enough about it. Sometimes, you just go ahead and get it over with, which was my job yesterday.

We agree that if someone will screw you over on something this small you really do not eant to give them a chance to doit on something large...not to mention that you can lose a whole cutting of hay, waiting for what looks like a semi-senile person to get the right parts to you.

I just wondered if anyone here had knowledge of the markup on parts...but, I see we aren't the on,y ones with this issue.

As for your NH tractor, if it is of recent vintage, we were told by both Case and NH dealers that they are virtually identical now...just different paint color.
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Honored Advisor

Re: Markup question

I lean your way Kay,  Mike needs to move on,,, it sounds like you needed to find competition for this dealer, if not now then soon....

 

I have handled it your way for years.  But when a dealer works with me to make it right, I stay loyal a long time.  Prices come and go, but a good dealer to work with is worth a lot...

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Senior Advisor

Re: Markup question

Good thing this wasn't over a 'Tree" - Kay probably would have cut it down and stuck were the sun don't shine  Smiley Surprised  Smiley Very Happy

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Honored Advisor

Re: Markup question

We have dealt with them for I would guess thirty years...can't really remember when we started haying. My policy is to work with someone as long as I reasonably can, and to try to see both sides.

This one had taken too long.and gotten too convoluted. I guess Hell flies into me, when I see my husband feeling unappreciated, by someone he has been that loyal to, too. It was time to cut ties.

If they don't like the alternative dealer I chose to order the ten parts from yesterday, they can do what I did:Google and hit " Call". It's that simple, and since Mike estimates that 95% of our hay parts are bought via telhone and sent UPS, where the caler is becomes less and less of a consideration now.
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Honored Advisor

Re: Markup question

Ken, we have roughly 400 acres of trees, not including this one.

I am a tree lover/hugger, possibly of Druid descent. Tryng to pass along those sentiments to this little man.

He climbed this, his first one, earlier today. He is only three, but already knows many of his wooded companions, this one he calls "MaMa's Magnolia".

What that woman did deserves a horsewhipping to me!
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Contributor

Re: Markup question

I currently work in customer support for a farm equipment manufacturer; prior to that I worked in parts for a farm equipment dealership; Our mark ups where different for different suppliers; Our main line agricultural parts would be marked up an average of 1.55 with a discount for cash of 5% plus freight unless it was ordered in on a stock order; construction parts would be about the same mark up but the cost of the part would be up to double the cost from the  parent company for a comparable agricultural part. The smaller retail lines parts would be 1.25 to 1.5 depending on what the discount was from the supplier; if a part was ordered in for a customer and it was not correct and it was our falt we would never apply a restock charge; if the customer looked up the info on line and gave us the part numbers and it was wrong a restock charge would apply and most would fight us on that because we should have known that there was a serial number split or the tractor had the updated kit installed even though the tractor came from a dealer two counties to the south; the odd customer would get the a__ hole mark up because you knew he would try to negotiate a better price because he was a better or more important customer; don't get me wrong; I am not bitter about my experience as a parts person; it is a great career and I enjoyed getting to know the customers on a one to one basis; having my own farm as well helped me to relate to the customer and see things from their perspective; I would encourage any young person to pursue a career in parts; if you become proficient at it you can write your own ticket; it is the parts department that can make or break a dealership and it is one of the key profit centres as well.