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Is materials handling equipment too cheap to purchase?
  • AndyPandy
  • Staffordshire, WM, United Kingdom
Generally speaking i feel that all materials handling equipment is too cheap to purchase or hire. Compared to other machines like MEWPs, agricultural and construction equipment, materials handling machines are very cheap. Will this ever change? Or am i completly wrong and it is a fair price for what you get.
  • Posted 5 Jul 2011 02:55 AM
Total replies: 55. Showing items 1 - 20 of 55 results.
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Replies
  • Snapman
  • Liecester, United Kingdom
Andypandy, You have hit the nail on the head. Sales give the trucks away and they get there comision for doing a **** job, then the service dep have to pick up the pieces. Forklift hire and sales is not what it used to be.
  • Posted 5 Jul 2011 06:06 AM
Your right there about sales, they either spec the truck wrong in the first place or try & sell the customer the options they get the most comision on. ive lost count of the amount of times ive had to go in after trucks are delivered to either retrofit options on to / or remove items from a truck.
  • Posted 5 Jul 2011 04:54 PM
  • millreef
  • Staffordshire, United Kingdom
Reading this you would think that engineers don't make mistakes or cost their employer money through repetetive repairs. In my experience engineers are every bit at fault as sales people. Engineers should get it right first time!!
  • Posted 5 Jul 2011 08:29 PM
Prices are determined by competition the more competition the cheaper the price. Ie a 2,500kg truck would be much cheaper that a VNA truck or a Container Handling truck. Also as companies can afford for smaller trucks to be down they will look at a lower cost manufacture where with VNA or larger trucks they can't afford the downtime so they will look to a quality brand.
  • Posted 5 Jul 2011 11:20 PM
  • Snapman
  • Liecester, United Kingdom
Millreef, I take it the you are on the sales/management payroll then by the sounds of it and as for repetetive repairs remark are you talking about your own handy work.
  • Posted 6 Jul 2011 12:52 AM
  • • Modified 6 Jul 2011 12:58 AM by poster
Andy Pandy,
With MH equipment like forklifts the big difference is the environment in which they work most of the time- ag & construction equipment work in mud & dust, uneven terrain, which means they need greater protection & most ag/equipment are fitted with expensive cabins, forklifts not so much. Ag-construction equipment work on side hills which dictates a ROPS (roll over protect system) vs a DOG (driver overhead guard) ROPS are more robust = more expensive. Just a few obvious differences
The Japanese companies taht I work for (Mist & Komatsu) both told me the forklift sell prices in the US are much less than in Europe & Asian countries. One reason Linde lifts are not widely accepted in the US market after many years of trying - they are viewed as niche' machine.
Certainly, competition sets street pricing but it is the total aftermarket support (parts, service, rental, finance, training,etc) that keeps customers coming back. The three key members of a dealer that the customer sees most often is the sales, service, delivery /pick-up persons. If the first, don't perform their job professionally, timely & accurately, there is no need for the driver and the rest of the support staff. There are "slacker" in any position at any company. It is a team effort that gets the job done.- just like in your version or our version of "football" look LA Galaxy paid millions for David Beckman based on yesterday's performance but the Galaxy loaned him out to the Italians (in 09/10) but at least he is still enjoying his Calif. house or his wife is. Think his contract is up next July, 2012.

"Have An Exceptional Day!"
  • Posted 6 Jul 2011 02:41 AM
i'm not sure if lift trucks are over/under priced but i do know that if they get expensive enough we service folks are gonna be busy as ****. when prices are high they fix what they got and overtime is abundant. when prices are low the sales guys are hittin home runs and livin on the golf course. seems to me there's a season for everyone.

easier to ask forgiveness than to ask permission.
  • Posted 6 Jul 2011 11:55 AM
toyzilla,
Have a hard time following your logic. My experience of more than 4 decades taught me is when prices are low to the end user as a results of slow economic conditions that translates there is less GP in the deal which equals smaller commission to pay the bills & you need to sell more to maintain your income level - that takes extra effort - difficult to do.
Conversely, when business is "rocking & rolling", prices increases and the opportunity is there to make greater commissions because you can sell at higher prices.
Simple economics.
Personally, I can count on one hand the number of times I played golf or similar activities during the normal work day - in good or slow times. No doubt there are exceptions, as there is in any position - just remember everyone makes their choice(s) of a career path w/o a 9mm pointed at their head.

I shouldn't state this next comment but I will "All other functions of any company aren't required unless the products or services (not repair stuff) is/are sold". You know like that "chicken or egg" thing. But it does take a "team" effort to be successful. Like in football if an offensive lineman "slips" a block someone is going to pay - the team pays.

"Have An Exceptional Day!"
  • Posted 6 Jul 2011 09:17 PM
maybe i should have phrased things a little differently. my point (or at least what i was thinking) was that when the economy is somewhat weak the new equipment prices are "perceived to be high" and in my condiderable experience when the economy is slow people do fix what they have and when the economy is good the "perceived price is low" and new equipment is the order of the day. as for sales i agree with you. i did my sentance in the sales department and was paroled due to lack of [url removed] lets just say it didnt work out. i have great respect for people that can "close the deal" and even more for those who can do it with integrity. i am not one to poormouth sales. as for "golf" [url removed] do have guys that play golf every week and some are in the mid six figures. did i mention that the economy is "blazing" here?

easier to ask forgiveness than to ask permission.
  • Posted 6 Jul 2011 10:36 PM
now I understand -
Our daughter & family live in Mineral Wells & Possum Kingdom is about 15 miles from their home & the "blazes" came real close to were they live earlier in the spring - they had to evacuate for a day as another fire start between their home & I-20.
We lived in Waco & Katy area 'til '96
If the fires head in your direction stock up on "Sweet Baby Rays" bar b q sauce it's great.

"Have An Exceptional Day!"
  • Posted 7 Jul 2011 02:04 AM
Service, Sales, Parts departments will always feud with one another. It is always easy to blame a problem on another department. Durring slow economic times when customers will tend to throw money at junk trucks instead of purchasing new or newer trucks, it should be a joint effort between the service and sales department to help the customer. A new truck may not be justified but a used truck may be cheaper than repairing the old one. I have found 40 -50 even 60 year old trucks that customers think should be brought up to todays standards with only a few dollars spent. The truck is junk but when it is their junk it should last indefinetly. In my experience the customer will often listen to reason if the information is presented properly. Often the mechanic is the one who can explain the situation better than the salesman. I have used the line that "I will gladly fix your truck, but you have to realize that it is going to cost a small fortune. This is the problem and this is what is involved in repairing it. The labor and parts are more than the cost of a newer truck. I am sure we have something in our use truck lot that is in better shape than this. I can have the salesman stop by if you like." More than 50% of the time it works. When the junk truck is taken back to the shop. Do not clean and resell, or send it to a scrap yard. Someone will buy it and resell it. You may have to fix the junk again. Cut it up and send it to the scrap yard in unusable pieces.
When times are good the customers will remember the service they got from the service department when they were hurting, and they will gladly do business with the sales department. Any salesman will tell you that it is an easy repeat sale when the service dept has kept the customer happy for years. It is almost impossible to make a sale when the customer has had to call a compeditor in to maintain his trucks. Probably won't give the sales man the time of day. The sales man must sell the right truck to fit the aplication the customer has. Too many lite duty trucks (low $ cost )have been sold into heavy duty applicantions because the salesman only wants the sale. The service tech hears every time he is called in. "Whats wrong with this truck? It is always broken. Did we get a lemon or is
( brand x ) just junk?" It is hard to keep the customer happy when his truck is down as much as up. It doesn't matter whether the economy is up or down. The departments must work as a team. Regular meetings with all departments discussing meaningfull topics will help keep all employees working as a team. Keeping secrets between department will distroy a company too. I have worked for companies that seem to pit the departments against one another. In MHO that is the worst thing a co. can do. If you don't have a "TEAM" you won't be very sucessful for very long.
Think of the future when making a sale or repairing a truck. Will I keep this customer with what I did today or will he be thinking of calling the competition and I won't have work ( $ ) in the future.
  • Posted 7 Jul 2011 06:15 AM
Andy,

You really sparked a great conversation. I was really caught up in reading all these posts. I really can't begin to justify what has happened to our economy and the result on our industry. This is to say, Wow, what the heck happened.

We live here in Henderson Nevada right by Vegas. I personally see the situation of undervaluing the industry constantly. If somebody is not off-loading a massive amount of lifts on the market because of hard times then we have the usual suspects that will go out on his own and take customers from the company that he was working for and reduce the available resources for income.

The entrepreneaur(spelling) has always existed and I always like to see the owner/operator make it but, you just can't fit 10lbs in a 5 lb bag. Population moves toward a warmer climate but I am telling you, it is dirt and rocks. Thanks for the conversation.
  • Posted 7 Jul 2011 11:38 AM
John r, yes MHE prices in the US are cheaper, but this is part of regional pricing strategies and goes for pretty much every product on the [url removed] cars.

I don't think now is the time to judge pricing, and personally believe buying market share, by selling cheaply, is the right thing to do and it encourages businesses to buy now where possible. Also in doing so when the global market does pick up you'll have a good base of customers who are happy with your services, the machine and are in a position to buy, so you will be much better off than competitors.

Also if you sell a service contract with every machine the sale price of the machine matters not and you could even make a loss on the sale but would still be making a good profit overall.
  • Posted 7 Jul 2011 07:03 PM
daniel q
I don't disagree with what you say, except for one thin, if you are a commissioned sales person paid on a percentage of the [url removed] (after the service & parts department get their full margins on get ready costs) selling at little or no profit is not a good thing when it comes to paying the bills & taking care of the family. Yes, by salting the mine with more units does benefit the organization as a whole for an extended time period as the parts, service, rentals department the higher [url removed] profit centers vs the sales dept. Yes, there are used sales that can help offset the low level of new equipment sales but in down economic times used sales slow down too.
I understand the concept of selling service agreements (and even receive a commission for each unit put on agreement) but getting an agreement for every truck sold is a challenge even in good times.

"Have An Exceptional Day!"
  • Posted 8 Jul 2011 02:40 AM
  • • Modified 11 Jul 2011 09:38 AM by poster
Andy. In response to your original question, yes I agree the lift truck customers do get exceptional value for money at the expense of the lift truck industry. But it hasn't always been that way, it is a consequence of total market saturation that has led us to a buyer's market.

If you look at the 1960s and early 1970's the 'big five', had the market divided nicely between them. Competition existed in a gentlemanly way and delivery could extend beyond 60 weeks for a standard 2 tonne machine. Mobile engineers and sales engineers were jobs that youngsters aspired to be and the customers simply had to pay the going rate.

Now we have massive globalisation with so many different manufacturers. Intermingled with the manufacturers we have the independents and then the local 'man and a van' - one look in the yellow pages will show how much choice the customer now has. Everyone is desperate for their slice - so they slash the price!

It is the variance on engineer's rates that gets me. How can a car mechanic in a car dealership workshop charge double that of a lift truck engineer who is running around in van?

We moan but we are still all here!
  • Posted 8 Jul 2011 05:27 AM
  • edward_t
  • South Carolina, United States
John you (and most other sales people would) say; "All other functions of any company aren't required unless the products or services (not repair stuff) is/are sold".
BUT as a technician, and being a bit more exact in the phrasing, I would say "All other functions of any company aren't required unless the products or services have a clearly defined demand in the mind of the customer", if that demand exists, then the sale happens on it's own.
It is the 'clearly defined demand' that equals a sale, not the salesperson, whose job it should be to get the customer to clearly recognize that they have a demand for the goods or services offered by the salesperson.
This is a lot like "jobs" which are not created by investors or entrepreneurs, but by that same 'clearly defined demand'.

"it's not rocket surgery"
  • Posted 8 Jul 2011 05:33 AM
  • • Modified 8 Jul 2011 05:35 AM by poster
interesting reading people and here is my view on it.
if you have developed a good working relationship with your client and your service dept have also helped look after them then selling the client another new unit is not that hard to do. people more often than not buy off people, I have changed brands twice and still my customers have purchased off me regardless of the brand. in regards to the difference between MHE gear and CE gear what people have to remember is that 90% of the time MHE gear is a non earning cost to a company instead of a constantly making money tool such as a piece of CE equipment. unless a company is charging to move a product with a forklift they wont make money from it where as a construction equipment company is charging for every min that there equipment is working hence why CE equipment is more expensive than MHE.
Just my input
  • Posted 8 Jul 2011 06:42 AM
  • AndyPandy
  • Staffordshire, WM, United Kingdom
Richard P, I think you have hit the nail on the head with the comment that we undervalue our industry. There have been some posts pointing the finger at sales but discounts are not my concern. The whole MHE product line and industry is undervalued by all.
  • Posted 8 Jul 2011 07:07 AM
this has has been a very good thread!!! lots of differing and even some similar opinions.
of course [url removed] is the only "correct" point of view but the posts are a very interesting read.
of course i'm kidding about [url removed] at least some of what i said.

easier to ask forgiveness than to ask permission.
  • Posted 8 Jul 2011 01:22 PM
It really annoys me that the perception from engineers that sales sell machines cheaply and that the engineers are the ones that make the money for there employers. Forklift sales is a very competitive market and the cheapest forklift or company doesn't always win. The forklift industry and the directors in charge are to blame they set the targets and budgets. Without machine sales there would be no machines to repair, no jobs. I've worked on both sides of the fence and repairing machines is a lot easier than selling them. Barloworld pay there regional account managers around £24,000 a year commission earning an average £150 per machine sale so there not earning the thousands of pounds engineers think they do. Sometimes the machines specification is wrong mistakes happen but the salesman still has to explain themselves they don't just walk away and leave it to service. If you think it's easy to sell mhe give it a go and you will soon realise that's it's not just the "engineers" that work hard and make profit for the companies.
  • Posted 9 Jul 2011 06:11 AM
Total replies: 55. Showing items 1 - 20 of 55 results.
123

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