Machinery prices and the law.

Lazy-Farmer · Jun 21, 2020

I was attempting to do a cost benefits analysis for an oil refinery before covid to asses if buying 3-5 telehandlers to reduce crane hires. It took me 3 weeks to get to a point that I had responses from a few dealers and I didn’t get response from all the places I wanted as management needs multiple options.

It took me a day to research machines do the report and the rest of the time was to get prices. If I could have found list prices that were real online I could have had the repost in and done and very likely had an order of a few hundred £k but as it happened it took to long to do and I had to move on. I hope to come back to it but budgets are now gone. I wonder how often that kinda thing happens.

Gone Shooting · Jun 21, 2020

POA - PITA

Lincsman · Jun 21, 2020

I have a list price for wheat at £300/ tonne, I always have to discount it to sell it.

Anything thats sold at the same price everywhere has been subject to price fixing, which is a very grey area of legality.

ColinV6 · Jun 21, 2020

I asked once, and it’s something to do with finance deals. Example. A tractor is £140k retail price, the finance company offers 0% finance but in the small print it’s only available on up to 50% rrp, so they can finance £70k, so if the tractor is reduced to £90k minus trade in, the whole amount can be financed at 0%

Lincsman · Jun 21, 2020

""My question is why is the agricultural machinery industry seem to be working outside this. Surely a tractor costs X amount to make and get to the point of sale. The dealer has a markup of Y and that’s the price. That’s it. Works for cars. Works for a pickup. Why is it that As a farmer the price is never the price. ""

You are joking right? Everything you and I buy has been sold for as much as the market will stand where ever its sold, cost of production is a irrelevance, classic example, I phones can be sold at a 30% premium in price due to their marketing machine, not the cost of making it, and Car badges are not expensive but can add loads to the sale price when swapped.

PS, have you never asked for a discount on a car? up to 25% is available on the right day.

roscoe erf · Jun 21, 2020

just stop buying new

TomD · Jun 21, 2020

Drumbroider said:
till I speak to the guy next door and find out what he paid.

Why does it matter what he paid as long as you're happy with what you pay ...

Exfarmer · Jun 21, 2020

Barleymow said:
Always amused me when buying bearings or electric things , item usually reasonable priced invoice starts at ridiculous price with 90%discount or more ..

it is widespread in the building trade and it is a scam, of the first order.
You want a new kitchen the builder quotes you £10,000 for XYZ fancy kitchen plus his labour installing say £2,000. You think wow what a good deal, he spends a fortnight making a good job for £2,000 for two men what a deal.
Except, he spent a fortnight installing a kitchen and an hour at the builders merchant negotiating an £8,000 discount , now who has a good deal.
I was just quoted ££4,000 including 10% for a certain electrical item plus possibly £3,000 labour installation due to complexity.
Next man quoted £4,400 full list price installed for free!

ccp contracting · Jun 21, 2020

If I am looking to buy a second hand machine and the advert is POA I don't phone I try else where . A salesman told me if machines have a price in an advert they sell a lot faster than if they have POA.

betweenthelines · Jun 21, 2020

All this faffing about with discounts is because it's what farmers want.

I've know people buy kit, including tractors, on the basis of who offered the biggest discount. Tractor A could be 60k with a 10k discount, tractor B £70k with a £15k discount and the farmers buys tractor B because he thinks he's getting a "better deal"

Farmers hardly ever buy on the basis of what you get for the price you actually pay!

I remember a retail store manager telling me a few years ago they were selling shirts for a fiver and hardly anyone was buying, they put the price up to £15.99 and sold out in a week!

Kezman50 · Jun 21, 2020

I’m with Drumbroider on this. Once upon a time a POA seemed to be applied rarely, seemingly reserved for the very high end purchase...... and in that context I could kind of understand it. So that when a dealer is advertising that collectors Rolls Royce Phantom their kind of saying “with the greatest of respect, unless your serious about purchasing this machine, let’s not waste each other’s time”. But pulling back to the Farming machinery world. POA is applied everywhere from the 200k combine down to the £800 topper and seems to be a ploy to get your name and number...that you’ve had to concede to get a price. Which then inevitably leaves yourself wide open to half dozen calls of sales pressure.

Will concede, however when there is a new machine that has not been specced up....there is justification for putting POA. An example would be a MF 5713 can be radically different to another 5713 in customisation.

Lazy-Farmer · Jun 21, 2020

Kezman50 said:
I’m with Drumbroider on this. Once upon a time a POA seemed to be applied rarely, seemingly reserved for the very high end purchase...... and in that context I could kind of understand it. So that when a dealer is advertising that collectors Rolls Royce Phantom their kind of saying “with the greatest of respect, unless your serious about purchasing this machine, let’s not waste each other’s time”. But pulling back to the Farming machinery world. POA is applied everywhere from the 200k combine down to the £800 topper and seems to be a ploy to get your name and number...that you’ve had to concede to get a price. Which then inevitably leaves yourself wide open to half dozen calls of sales pressure.

Will concede, however when there is a new machine that has not been specced up....there is justification for putting POA. An example would be a MF 5713 can be radically different to another 5713 in customisation.

I totally agree with you on that one. On some things if you have to ask you are not a buyer.

However as with spec of tractors the same can be said for a Toyota Hilux. The difference is you can go onto Toyota’s website and spec it from base model to top end as you like and although your not going to pay exactly the RRP online when you get to the dealer and do the haggling or take advantage of a deal etc. You will be in the ball park of the right price for the porpoises of business planning and doing the sums to see if it will work for you.

GeorgeK · Jun 21, 2020

I think the mystery of ag dealer prices is why Agri-Linc have done so well, everything is priced up, used and new, parts and machinery. By far the best catalog and website to browse through because of this

Bald Rick · Jun 21, 2020

Drumbroider said:
I’m not sure if I’m alone in this but I hate shopping for machinery. I enjoy the looking and everything about it except trying to get prices. It’s always a game of who you are and how you get on with the dealer etc. If you ever find a list price it’s nothing like what anyone pays and prices are never shown on anything. Adverts online and in magazines saying POA.

This brings me to the law. Let me start with The fact that I’m no lawyer! My understanding after reading some things on the governments trading standard site and my experience the retail sector Is that it is a legal requirement for products being sold to have a marked price they must be priced in metric if by weight. It must be clearly shown or a price list available. It must be in GBP and show if vat is added or not.

This covers expensive items like property down to a single potato. A discount may be applied but you must actually sell the items at normal prices otherwise your claiming to have a percentage off is a lie. It’s just the price. Lots of business selling furniture etc have been done for this.

My question is why is the agricultural machinery industry seem to be working outside this. Surely a tractor costs X amount to make and get to the point of sale. The dealer has a markup of Y and that’s the price. That’s it. Works for cars. Works for a pickup. Why is it that As a farmer the price is never the price.

To reiterate I am no lawyer nor anything close to an expert in this. I’d love for someone to explain to me why you can’t spec and price a tractor the same way you can a land rover for example.

Machine costs A to make and deliver to a dealer
Dealer adds his PDI cost B which is sacrosanct
Dealer adds his margin C which he may be prepared to haggle on

A+B+C = D minimum price the dealer is prepared to sell machine at from which he will work out his trade in etc

You walk in perhaps knowing list but not D price. You may be told E price which you may accept or not but you aim has to be to get as close to D as possible in the knowledge that he will screw you on servicing “in order to maintain warranty”

In reality the dealer is going this stuff all day so he will always be better than you. Bit like bookies

dowcow · Jun 21, 2020

I sometimes assume POA means that when they tell you how much it is they want to be able to explain a few things at the same time, such as it came in needing some serious work, has a whine in the gearbox that might need some work in future, or that it has had an insurance claim or finance go wrong against it. Maybe they want to tell you it has tread on the tyres but they actually look pretty knackered in the sidewalls and you are probably going to have to spend another 3k on some new ones.

fermerboy · Jun 22, 2020

ColinV6 said:
I asked once, and it’s something to do with finance deals. Example. A tractor is £140k retail price, the finance company offers 0% finance but in the small print it’s only available on up to 50% rrp, so they can finance £70k, so if the tractor is reduced to £90k minus trade in, the whole amount can be financed at 0%

Exactly right.
The inflated list price is just a way of allowing the manufacturers a way of offering finance on more of the purchase price.

Frodo2 · Jun 22, 2020

fermerboy said:
Exactly right.
The inflated list price is just a way of allowing the manufacturers a way of offering finance on more of the purchase price.

Which I always thought must leave them open to some sort of fraud allegation with the finance company.

Exfarmer · Jun 22, 2020

Frodo2 said:
Which I always thought must leave them open to some sort of fraud allegation with the finance company.

I think if you look far enough in the small print somewhere, there will be a line delineating the term “full list price” as being that quoted by the manufacturer as the listed guide price.
it has been forever such.

Gone Shooting · Jun 22, 2020

Weavings website has prices marked up - no worries about ringing for the price - you either like it or not and not wasting time.

Lazy-Farmer · Jun 22, 2020

Gone Shooting said:
Weavings website has prices marked up - no worries about ringing for the price - you either like it or not and not wasting time.

Just had a look and they seem to have the right idea. Thanks for pointing me in there direction.

Machinery prices and the law.

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100% I’ve had enough of farming!

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