sport05
Agree with your scenario. There is one key point I will added - mostly applicable to the North American Market. In the 80's there were basically one brand & one one point of manufacture. Some folks had two manufacturing sites one for IC & one for electric product and today since 1992 there are less manufacturing sites i.e. Yale/Hyster, Mitsubishi/Cat and the impact of Toyota owning, BT & Raymond. From a brand name view point there are only two brands that have disappeared White & Allis Chalmers (later know as ACHM). then Kalmar AC, Tusk brands built by Komatsu but now gone. The Korean & Chinese brands are making some headway in the market - namely the Heli & Doosan brands.

This is a very interesting thread that speaks to the changing business environment for the material handling business. It is very true that up until the 1980's lift truck sales people could sell trucks at list price or in the case of larger national account customers, with very small discounts. When the Japanese manufacturers started to aggressively enter the US market in the 1980' that all changed. I don't know if this time frame was the same in Europe. If you recall in the 1981-1982 time frame the US plunged into a bad recession. As a territory sales person and then sales manager in those days, there were cases where the US brand lift truck that I sold was thousands of dollars high versus the Japanese brands such as Toyota, Nissan etc. So began special discount programs, incentive to dealers and overall erosion of new truck margins in our business. We started to lose good salespeople who were unable to make the living that they were used to. Some went to competitors many more left the industry to pursue what they perceived as better opportunities. In those days the US made trucks were built like tanks with lots of heavy industrial components and metal. A truck rated for 5000 lbs at a 24" LC could really pick up close to 6000lbs. The Japanese trucks would pick up the rated load and not much more and utilized lighter components and less weighty frames. They were not bad trucks just not as good as the US trucks in those days in terms of durability. The one area that the Japanese did have an advantage was in IC engines due to their automotive experience. Because of the price differential the US brands lost market share to the Japanese. I can recall quoting a deal for 5 ic trucks to one customer in the early eighties and having him tell me that he could by 6 Toyota's for the same price! But enough of old war stories and history dissertations!
My main points are that we as an industry have just gone through another very bad recession and while we did not have a competitor emerge this time such as the Japanese brands did in the 1980's we had an industry drop of 50+% which had a major effect on pricing. No OEM dropped out of the lineup so the same number of competitors were fighting for a piece of a much smaller pie. This was even more so in the ic segments of the industry although electric trucks were close behind. Sales people were faced with fewer opportunities than ever and the customer's that were purchasing learned how to play the game in order to get the lowest price. It was quite amazing to watch the discount levels increase to almost double what they had been prior to the economic crisis. Dealers and manufacturers were pushing hard for sales people to get every order possible. In some cases this meant take a loss on the truck sale. The reason? Because a very small portion of the overall revenue and profit that the sale of a lift truck generates is from the initial sale. The majority of income is generated by the service and parts business along with short term rental. Both the dealers and the OEM's wanted to continue to put as many trucks as possible out there to assure that income stream.

Perhaps it's just the free market in action?

@arminius,
Now I understand - what you meant to say today's sales people have much better tools to work to be more productive with today but the caliber of sales types in your opinion has fallen off due to lower commissions due to lower GP. To some extent I agree with that. Many of today's days sales people sell on prices FAB basis - meaning Feature - my quote is the best prices in town; Advantage - I can go lower if some one tries to beat me; Benefit - saves you $$ or even more $$$$$.
In the 70's (I started in lifts in 1967) most lift truck companies put a great emphasis on training - product training & sales training & Dale Carnegie courses and some provided "financial merchandising" (Clark primarily). Over time these practices have been diminished with an exception or two - most training provided by the manufacturer is product related and today's lifts are pretty much alike (Yale/ Hyster - Mitsubishi /Cat, etc.). Sales skills, selling dealership customer service capabilities & financial merchandising (not the give me a rate factor type) are a few key ways to build GP back into the sale.
We are in the age of "mega" dealers that can do a lot of good things for the end user and many if not most of these organization train-train-train- train not only sales types but all employees. Today's buyers are a different breed too - with the trend to lean management their time is valuable. The sales person needs to get his point across in about 3 minutes (sounds like the IBM sales techniques). OJT is not an efficient way to go.
Food for thought.
Kinda' like going fishing - before you go you need to cut bait.

You know what I think is saddest of all that factories hound the dealers about how many trucks they will (have to) sell every year. Isn't that ridiculous? If there were a decent profit to be had why would they need to do that?
The slim profit margins on new trucks set a hugely negative benchmark on everything else a dealer sells. Look at pallet rack, batteries etc. The respective manufacturers of these items, including lift trucks, call it "hitting a home run" when you make 10% GP. Nice!

Johnr,

Take a salesperson from the 70's...two way radio, typing quotes in triplicate, no cell phone, maybe a pager. Today's salesperson: emails, cell phones, laptops, instant communication. Today's salesperson has the ability to get so much done compared to their counterpart a few decades ago, i.e. more productive, if they choose to use the tools provided.

Having said that, this industry doesn't attract the BEST of the Bunch anymore, at least that's my hypothesis. So while today's salesperson has the ability to do more than ever, our team is comprised of JV players (again there are some very talented folks out there who do very well, always exceptions to the rule).

As for market share, again, I'm hypothesizing here, the factories beat their chest about market share and it lends a hand in inflating share prices and making shareholders content, but for the industry as a whole I believe it is bad business for all involved except the factory and even then, it's a long term war of attrition before the inevitable sell-off.

Hope I clarified myself.

A

@arminus, You say "Clearly, today's lift truck sales person is far and away more productive than previous years. However, relatively speaking and with a few exceptions, we don't get the best players in the market like in years past."
I get confused by these two sentences. The seem to totally contradictory, if today's sales person is more far more productive (more sales, more new customers, at higher margins, with less sales expense, greater commissions, etc) than those better sales types you had in the past weren't all that good or you are viewing productivity by some other productivity standards? Now I' was born in the mid west & now live in Georgia so I'm easily confused. Help me understand what you are trying to say.
I've worked for both the factory & retail side of this business,factories like market share but their primary goal is to keep the production lines running to help pay the overhead & fixed costs of the plant & factory personnel, programs to support the distribution organization (dealers). That translates to volume & GP per unit. Market share cannot be deposited in the bank, revenue can. Market share will get you a trophy or plaque at the end of the year and let one hob **** with the right folks at the country club.

It would be interesting to note how much Market Share incentives and other 'under the line' inducements Owners/Principals play into the erosion of margins on the lift truck sales.

Clearly, today's lift truck sales person is far and away more productive than previous years. However, relatively speaking and with a few exceptions, we don't get the best players in the market like in years past.

Well paying jobs tend to attract top performers, so it's now a chicken and egg question: Did the lack of profit cause talented sales people to pursue other employment? Or did the quality of salesperson drive profits down?

I lean towards the former. Without factories hungry for market share and shareholder value, we might be in a different game.

Government (local, county, state, feds) has yet to process anything promptly - they just want your tax $$ quickly so they can spend, spend, spend.
Understand your loyalty well. See the first half of my life I lived north of the Mason-Dixon line - moved to Waco in early 1982 (still trying to get my green card to live south of the Mason-Dixon. I was born, raise & educated in Michigan. I am a Deeetroit Lions fan forever & they ain't done nuthin' since 12.29.1957- Beat the Browns 59-14 for NFL championship. I like pain - luved the forklift industry for 41 years & still like bamboo shoots stuck under my finger nails too!

Yes, John, but my boss was beginning to get slightly irate as it was a little over a year after the 4 lifts were scrapped and the 20 new ones were in service before the govt cut us a check. And that was after a stack of paperwork 4" thick was filled out and pics provided of the scrapping!

I was born and raised in Louisiana. I support the Texans but I'll ALWAYS be a Saints fan!!

Joe d - as they say there is no free lunch i.e. the red tape.
But, if you live in Texas & support the "Saints" that can be a dangerous thing or even hurt business.

Good point, John. We do that here, 72 mo/$1 buy out. Usually the 5K LPs are pretty worn out at the end of the lease. We order new lifts and as they arrive the old are paid out and sent to auction. It really cuts down on maintenance costs and keeps me from going bald working on worn out equipment.

Another thing we did was TERP grants (Texas Emmisions Reduction Plan Grant). Basically it is "cash for clunkers". We scrapped old, worn out but still running LP lifts (holed the block and cut the frame) and we got quite a bit of cash to put towards new electric lifts. The only draw back was the mountain of red tape and paperwork that went along with it.

One thing that has yet to be brought up, speaking for the US market & possibly Canada), is the fact that most lift trucks have been (some have estimated as high as 80%) & will be acquired by the some sort of financial package the FMV (fair market value) or capital finance program (aka $1.00 option lease). And typical 80% of those financed units are on a FMV for 36mo, 48mo, 60 mo or even 72 mo or any number of months in between or long term rental program (1 year or longer - dealer finance program).
In most cases the residual values or balloon payment are the key to moving iron & retaining acceptable profit margins. This is where the "cheap" off shore units have a hard time competing for until the can prove they are worthy of "competitive residual values" w/o a dealer guarantee. Toyota was/is a master at selling customers on their 36 mo FMV at rates that were difficult to match by most all other competitors. Once the finance term was up they would sell the unit to the end users & harvest a second handsome profit or extending the lease at a new monthly rate.

Basically, customers are buying "usage" for a given period of time & are not looking to have the units last forever. The more FMV's out there the second sale is made much easier and usually before the competition can get into the mix and muddy up the water.
Oh, I'd bring in dough nuts for the shop folks & take the road tech(s) for my territory out to lunch - they are a great source of G2 at my customers.

Help the customer, make a sale for the people that paid my paychecks...it can all be the same thing. Why try to sell a customer $8K dollars in repairs on an antique truck when I can try to sell him on buying new and cutting down on future repairs? The customer walks away happy, the salesman is happy and I walk away with that warm, fuzzy feeling (and knowing 6 weeks from now I'll never have to look at that antique again!).

Being from the other side of the tracks I know what the profit margin is on certain things. If I can get the same thing from different vendors (Cascade attachments for instance) why not haggle? And my primary vendors know I would prefer to deal with them so they're usually the lowest bids anyway.

Joe D;
I would have thought that you would recommend a truck to a customer to help out the people that provided employment to you not to help out the customer? I'm not really sure what that means anyway.
You ever try to sell a truck to an auto dealer. You would think that the would have some sympathy and not beat you to a pulp but they enjoy being on the other side.
The customers that don't haggle with me are the ones that I'll bend over backwards for.