The more I read this thread the more I'm frustrated by what it appears that MasterCraft is doing with dealers and the predicament they are putting them in.
I've been very close with the TXMC guys for 15+ years but never worked directly for the dealership selling boats, so I don't have experience directly with MasterCraft on a manufacturer / dealership basis. But I have spent years in the agriculture equipment industry selling both Case IH and Kubota equipment.
In this case I think that Case IH is more in line with MasterCraft than Kubota. Kubota sells a lot of smaller equipment in our territory and most of it is dealer inventory and not custom ordered. Case IH is larger (more expensive) equipment and is increasingly more custom ordered for the farmer. It is not uncommon for the MSRP of a new combine to be over $700,000.
When a dealer places an order for a piece of equipment, we have to mark it as dealer inventory or for a customer. If we order it as dealer inventory, we know the MSRP but we do not know what, if any, discounts the manufacturer may give us. That is always based on the current programs when we price to a customer, which is fair to the dealer, because we know what it will cost us before we price it.
If we order the equipment special for a customer, we lock in our price and discounts with the manufacturer the day the equipment is ordered, which allows us to price it to the customer when it's ordered, since it may take 3-6 months to arrive. If the programs / discounts get better when it arrives and the customer pays for it, then the customer gets that benefit. But if the prices increase or the programs are not as good when it arrives, the customer is locked into the price when the dealer ordered the equipment.
To me, this system makes sense for the manufacturer, the dealer, and the customer. The customer knows the price when they order the equipment (seems obvious). The dealer knows the cost when they price the equipment to the customer (seems obvious). And the manufacturer is encouraging both the dealer (their customer) and the end customer (the dealer's customer) to place orders to keep the factory busy, which is what they want. The manufacturer wants to make 100% of the units that they are capable of making.
I think what may be happening in the tow boat world is that the manufacturers are seeing every build spot fill with customer orders and there being basically no dealer inventor orders any more. They can't build any more boats, there is more demand than supply, so they they say to hell with the contracts in place, if a specific dealer won't pay the price increase, another one will and buy the boat. Dealers know if they start turning down boats, they won't have anything to sell and may not get as many build slots next year.
Being in a related industry on the dealer side, I think the only fair way to do it for all three parties is for the pricing to be locked in when a custom order is placed. If the end customer backs up, the dealer cost then goes up, but they can adjust their sales price accordingly to make up for it. Alas.
I've been very close with the TXMC guys for 15+ years but never worked directly for the dealership selling boats, so I don't have experience directly with MasterCraft on a manufacturer / dealership basis. But I have spent years in the agriculture equipment industry selling both Case IH and Kubota equipment.
In this case I think that Case IH is more in line with MasterCraft than Kubota. Kubota sells a lot of smaller equipment in our territory and most of it is dealer inventory and not custom ordered. Case IH is larger (more expensive) equipment and is increasingly more custom ordered for the farmer. It is not uncommon for the MSRP of a new combine to be over $700,000.
When a dealer places an order for a piece of equipment, we have to mark it as dealer inventory or for a customer. If we order it as dealer inventory, we know the MSRP but we do not know what, if any, discounts the manufacturer may give us. That is always based on the current programs when we price to a customer, which is fair to the dealer, because we know what it will cost us before we price it.
If we order the equipment special for a customer, we lock in our price and discounts with the manufacturer the day the equipment is ordered, which allows us to price it to the customer when it's ordered, since it may take 3-6 months to arrive. If the programs / discounts get better when it arrives and the customer pays for it, then the customer gets that benefit. But if the prices increase or the programs are not as good when it arrives, the customer is locked into the price when the dealer ordered the equipment.
To me, this system makes sense for the manufacturer, the dealer, and the customer. The customer knows the price when they order the equipment (seems obvious). The dealer knows the cost when they price the equipment to the customer (seems obvious). And the manufacturer is encouraging both the dealer (their customer) and the end customer (the dealer's customer) to place orders to keep the factory busy, which is what they want. The manufacturer wants to make 100% of the units that they are capable of making.
I think what may be happening in the tow boat world is that the manufacturers are seeing every build spot fill with customer orders and there being basically no dealer inventor orders any more. They can't build any more boats, there is more demand than supply, so they they say to hell with the contracts in place, if a specific dealer won't pay the price increase, another one will and buy the boat. Dealers know if they start turning down boats, they won't have anything to sell and may not get as many build slots next year.
Being in a related industry on the dealer side, I think the only fair way to do it for all three parties is for the pricing to be locked in when a custom order is placed. If the end customer backs up, the dealer cost then goes up, but they can adjust their sales price accordingly to make up for it. Alas.
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