Re: Moving from Used to New...


Kevin Cunningham <smskjv@xxxxxxxxxxxxxx> wrote in message
news:lheeh.8012$sf5.3642@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

"Too_Many_Tools" <too_many_tools@xxxxxxxxx> wrote in message
news:1165556705.022753.188510@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

The centralization of the vending process to eliminate
dealerships in
favor of regional
offices is interesting.


I would use a more colorful word than "interesting".

The level of service and responsiveness to customer requests
has
suffered from all manufacturers adopting this mode.

I expect Chinese and India companies in the future to take
advantage of
these weaknesses.

TMT

Let me throw my two cents in. There are fewer and fewer
dealers as
manufacturers take over more areas. Nikon now runs the SE
directly for
instance. However this is not as good as it seems. The Nikon
folks are not
as skilled as the users could hope. I like these folks quite
well but they
need more help from Nikon. Training is a huge issue but since
it costs
money manufacturers just want it to go away. The interenet has
allowed
users to get info from other users which has increased price
pressures.
Manufacturers are desperately trying to get this to go away but
their
methods, holding their breath till they turn blue, hasn't
worked for them.
The internet is here to stay.

I've been talking to my dealer buddies and they have the same
ole' problems.
It costs a lot, about $1.5 mill., to be a dealer, its very hard
to get sales
staff and it very hard to find a bank that will lend you money
for expansion
or stocking. A lot of dealers are trapped in the late '70's at
best. One
huge problem is territory size. Some dealers have small, 50's
type,
dealerships. This means they don't have enough accounts to
hire people
other than their family. Sounds good until your in your
sixties and want to
sell, but to whom? Hiring staff is difficult. It takes a year
to fully
train a sales person and get the person accepted by the
customers.

Most manufacturers discount equipement to dealers at 30%, Nikon
ranges from
40% to 50% for bench top and research stuff. Student stuff is
sold by
discount so its at 40% at least so it can be discounted more.
A dealer need
18% to cover costs so any more than a 10% discount is a
problem. Demo stuff
is at the discrection of the manufaturer but usually the dealer
has to buy
demo stock 3-4 times a year. Not a bad deal, usually its used
to boost
profit margins and the rest sweetens deals usually to a buyer
that will be
buying some more later. It's rare to sell demo stuff to an
amateur but
anything can happen once. There are constant equipement needs,
most
equipement is built once or twice a year, when it runs out, its
out.

There are just not enough amateurs to make that market viable
thats why its
hard for an amateur to be treated properly, you see so few of
them as a pro.
I can count on one hand the amateurs I've seen in all my years
(I start
waving my cane now, it gets tangled in my beard) in the biz.

Kevin:

Good analysis. The category margin statements and fixed overhead
costs should
be useful to the OP.


Just a small point, when did you ever see a salesman (any
variety) not
lying?

And you had to make me laugh too?

Regards,

Edward Hennessey



.

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