Generac Power Systems - Sell generators without paying for generac classes?

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M.Smith

New member
Location
Massachusetts
I get around 2-3 customers a year that are wanting a Generac Standby Generators. I can get them cheaper than at Lowes online, but so can my customer. This prohibits me from making some money on the sales. Any Ideas?:weeping:
 

Dennis Alwon

Moderator
Staff member
Location
Chapel Hill, NC
Occupation
Retired Electrical Contractor
I always tell people if they buy it then there is no warranty. I also will add more money to the job since material markup is part of how I pay my bills.
 

goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
Competition is alive and well in my area. I was a Generac dealer and am now a B & S dealer. By the time I get done paying for the shipping & sales tax I have no room for a profit margin. I can't sell a unit for less that what HD & Lowes sells it to a HO for. So now I generally let the HO purchase the unit but with my suggestions on the size of the unit, what xfer switch, etc. If the HO goes to Lowe's or HD themselves they may end up buying the wrong stuff. If the HO buys the unit the warranties run directly through them. If you buy the unit they run through you. So, I have no problem working this way. I'll just make $$ on the installation. If they want me to buy the unit I have no problem doing that either but I'm not going to buy something for a dollar and sell it for a dollar. I tell the people, up front, I'm entitled to make a profit on anything I sell. If they want to save $$ buy it themselves.

Having said all of that, there's an authorized Generac dealer/EC in my area beating my installation prices by at least $1K. Near as I can figure they're going in cheap and making $$ on the follow-up service. Either that or they're picking up foreign day workers off the roadside and paying them $10/hr. Whatever the case is, if they want generator work that bad they can have it.
 

Daja7

Senior Member
I get around 2-3 customers a year that are wanting a Generac Standby Generators. I can get them cheaper than at Lowes online, but so can my customer. This prohibits me from making some money on the sales. Any Ideas?:weeping:

My mark up, or profit is on the job not a material mark up. If the customer thinks thay can save money buying it themselves , ok with me. My profit is the same as if i bought it. Some times if a consumer is military they can get 10% off at HD or Lowes. Good for them, they save a few and I don't have to pick up or deliver but my markup is still the same.
 

Captain Jack

New member
I always tell people if they buy it then there is no warranty. I also will add more money to the job since material markup is part of how I pay my bills.

I don't understand how you can tell a customer they do not have a warranty if they purchase the unit themselves. If you purchase it, or they do, Generac still provides a warranty on the product.
 

Dennis Alwon

Moderator
Staff member
Location
Chapel Hill, NC
Occupation
Retired Electrical Contractor
I don't understand how you can tell a customer they do not have a warranty if they purchase the unit themselves. If you purchase it, or they do, Generac still provides a warranty on the product.


We I was trying to say is that I will not give my labor part of the warranty. They buy it then it is their problem if issues arise not mine. They can pay me to deal with it. I wasn't specifically speaking of generators but materials in general.
 

Fulthrotl

~Autocorrect is My Worst Enema.~
I get around 2-3 customers a year that are wanting a Generac Standby Generators. I can get them cheaper than at Lowes online, but so can my customer. This prohibits me from making some money on the sales. Any Ideas?:weeping:

yeah. find good customers, ones that you can have a frank discussion with.

when i run across someone who want's to buy the material themselves to
"save money"..... i support them in that decision. i suggest that they purchase
the material, and call me when it is onsite and they are ready for installation,
and i'll come over and give them a price to install it.

they don't know what to buy? sure, i can help you with that list. let's start a
work ticket, and at my normal shop rate, i'll discuss this all day long.

the install? that'll be a flat rate. i don't, except in rare circumstances, do T&M.

and people wanting something for nothing aren't rare.
 

kwired

Electron manager
Location
NE Nebraska
the install? that'll be a flat rate. i don't, except in rare circumstances, do T&M.

and people wanting something for nothing aren't rare.
How does that flat rate work out when they don't have all the materials needed or maybe not the correct materials and it takes more of your time and or money than originally anticipated to get the job done? There about has to be some kind of compromise, and on bigger projects this may be easier to deal with but the job that should only take 1/2 day or less can burn a whole day easily if you run into this kind of problem, plus any material you end up providing that you were not supposed to by your agreement.
 

Greg1707

Senior Member
Location
Alexandria, VA
Occupation
Business owner Electrical contractor
generator installations

generator installations

A lot of contractors in my area are installing generators. I am sure they are doing good work with the installation. However, I don't think any of these contractors know anything about the operation or repair of the equipment beyond what is necessary to complete the installation. Is an EC installing a generator any different than a HVAC contractor installing a furnace/AC system? Should I assume the contractor that installed my furnace/AC system is knowledgeable about warranty, repair, adjustment, servicing and maintenance? Or does he just know how to install it?

A generator is a lot different than an electric panel. Generators are complex machines similar to a home appliance or furnace. If I where a home owner I would not hire me to install a generator. If I am dropping $10-15K for an installation I would prefer a factory authorized dealer.

Despite the above, I have installed several generators and will continue to do so even though I know nothing beyond how to install the equipment. I am a embarrassed because of my ignorance of the equipment I am installing.
 

RLyons

Senior Member
We are installers for Lowe's...install customer purchased generators somewhat often, we even work with other EC to install/troubleshoot/ and even called (yes, EC's in some cases call us first) to warranty previously installed generators. Not to mention selling service contracts leaves me to believe money is to be made.
I don't understand how companies who don't do Electrical/Gas/Warranty in house make sustainable money.
 

goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
A lot of contractors in my area are installing generators. I am sure they are doing good work with the installation. However, I don't think any of these contractors know anything about the operation or repair of the equipment beyond what is necessary to complete the installation.
What else is required ? The unit is brand new. Barring anything unforseen there usually aren't any adjustments required.
Is an EC installing a generator any different than a HVAC contractor installing a furnace/AC system?
No different IMHO.
Should I assume the contractor that installed my furnace/AC system is knowledgeable about warranty, repair, adjustment, servicing and maintenance? Or does he just know how to install it?
Usually an HVAC guy or plumber will have the ability to do all of that. If there is a problem with installing a furnace or AC unit, if he can't make the repair with his basic knopwledgs he can call the factory and get all the information required to do so. In the case of generator manufacturers they keep a lot of that technical information proprietary to protect their dealers. A concept I find hard to understand seeing as how they enjoy the high level of sales through mass marketing by selling through companies like Lowe's, HD & EG Direct. In addition, if the HO's buy the units themselves the warranties goes directly to them from the manufacturer.
A generator is a lot different than an electric panel. Generators are complex machines similar to a home appliance or furnace. If I where a home owner I would not hire me to install a generator. If I am dropping $10-15K for an installation I would prefer a factory authorized dealer.

Despite the above, I have installed several generators and will continue to do so even though I know nothing beyond how to install the equipment. I am a embarrassed because of my ignorance of the equipment I am installing.
As long as you come off as a knowledgeable professional you'll continue to get generator installs. If you convince your potential customer that you are merely an installer, chances are the sale will go to another EC, probably a dealer. IMHO, come off as a professional no matter what.
 

kwired

Electron manager
Location
NE Nebraska
A lot of contractors in my area are installing generators. I am sure they are doing good work with the installation. However, I don't think any of these contractors know anything about the operation or repair of the equipment beyond what is necessary to complete the installation. Is an EC installing a generator any different than a HVAC contractor installing a furnace/AC system? Should I assume the contractor that installed my furnace/AC system is knowledgeable about warranty, repair, adjustment, servicing and maintenance? Or does he just know how to install it?

A generator is a lot different than an electric panel. Generators are complex machines similar to a home appliance or furnace. If I where a home owner I would not hire me to install a generator. If I am dropping $10-15K for an installation I would prefer a factory authorized dealer.

Despite the above, I have installed several generators and will continue to do so even though I know nothing beyond how to install the equipment. I am a embarrassed because of my ignorance of the equipment I am installing.
Not all owners look at it that way, many just see dollar signs and the less they spend the happier they are, as long as they are getting what they think they are getting (that may be the big trick to the puzzle here). When something goes wrong though, the guy that installed it is likely the first person they think of an the person who gets called, even if they are not all that good at troubleshooting and repairing the problem. With a genset like this you could be good with the electrical, but what if they are having engine trouble? It still effects overall performance of the installation. If you sold it they likely expect it to be your problem to take care of all warranty issues though they may be understanding if you get someone else to look at other than electrical issues, but still expect you to take care of all arrangements.

What else is required ? The unit is brand new. Barring anything unforseen there usually aren't any adjustments required. No different IMHO. Usually an HVAC guy or plumber will have the ability to do all of that. If there is a problem with installing a furnace or AC unit, if he can't make the repair with his basic knopwledgs he can call the factory and get all the information required to do so. In the case of generator manufacturers they keep a lot of that technical information proprietary to protect their dealers. A concept I find hard to understand seeing as how they enjoy the high level of sales through mass marketing by selling through companies like Lowe's, HD & EG Direct. In addition, if the HO's buy the units themselves the warranties goes directly to them from the manufacturer.
As long as you come off as a knowledgeable professional you'll continue to get generator installs. If you convince your potential customer that you are merely an installer, chances are the sale will go to another EC, probably a dealer. IMHO, come off as a professional no matter what.
I think you will see in the HVAC industry that if a HO calls a manufacturer or rep on technical issues they will not necessarily be as helpful as they are for authorized dealers/installers/technicians. May not be same for all manufacturers but I think it does happen. It also may not be they won't help, as much as a good HVAC tech just happens to know who to call, and it is not a number on the manufacturers web site or in the owners manual, it is a number they got from the distribution chain.
 

masonc

Member
Location
Anguilla
We are a Generac sales and service, we stock the kits for serivce, the manuals, the tools. We do the installation start to finish for a fixed price. If we don't sell it, we don't install it and we don't service it. We don't sell sweat. Doing so is a mugs game. There's plenty of people so hungry that they will try anything but they won't last long. You can't stoop to their level and make a living.
Generally when one of my customers wants one of our products, they are not comparing us to Lowes. We don't want those customers.
 

kwired

Electron manager
Location
NE Nebraska
We are a Generac sales and service, we stock the kits for serivce, the manuals, the tools. We do the installation start to finish for a fixed price. If we don't sell it, we don't install it and we don't service it. We don't sell sweat. Doing so is a mugs game. There's plenty of people so hungry that they will try anything but they won't last long. You can't stoop to their level and make a living.
Generally when one of my customers wants one of our products, they are not comparing us to Lowes. We don't want those customers.

I am becoming more and more that way. I won't say I will not connect a generator I didn't sell or other items I didn't sell, but I certainly am not going to do any warranty work on something I didn't sell, and am not going to give them any special labor or other installation rates that are bottom feeder type pricing. I am either going to install it to what I believe to be the correct/best method for the application, follow codes to the best of my ability, and in a neat and professional manner. If they don't like the cost, that is fine, I don't have to do the work, and there is usually something else I can be doing for some of my repeat customers and they will not complain about much of anything.
 

goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
We are a Generac sales and service, we stock the kits for serivce, the manuals, the tools. We do the installation start to finish for a fixed price. If we don't sell it, we don't install it and we don't service it. We don't sell sweat. Doing so is a mugs game. There's plenty of people so hungry that they will try anything but they won't last long. You can't stoop to their level and make a living.
Generally when one of my customers wants one of our products, they are not comparing us to Lowes. We don't want those customers.
I can appreciate your position on generator customers and the pride you take in your company's policies, truly an admirable quality. What I have difficulty understanding is the pride you take in being a Generac dealer. Here's a company so bent on making those almighty $$$ that they sell their products thru any company willing to push their gear out the door, be it companies like Lowe's, HD or EG Direct. As an authorized dealer (and one who has gone thru their schooling) you should at least be entitled to compete for generator sales with other dealers in your area without outside companies under-cutting your prices on generator sales. IMHO, if a company like Generac wants to sell their products thru authorized dealers like yourself then open as many as you wish. But mass marketing thru on-line companies and big box stores in addition to having authorized dealers is, in and of itself, bottom-feeding.
 

kwired

Electron manager
Location
NE Nebraska
I can appreciate your position on generator customers and the pride you take in your company's policies, truly an admirable quality. What I have difficulty understanding is the pride you take in being a Generac dealer. Here's a company so bent on making those almighty $$$ that they sell their products thru any company willing to push their gear out the door, be it companies like Lowe's, HD or EG Direct. As an authorized dealer (and one who has gone thru their schooling) you should at least be entitled to compete for generator sales with other dealers in your area without outside companies under-cutting your prices on generator sales. IMHO, if a company like Generac wants to sell their products thru authorized dealers like yourself then open as many as you wish. But mass marketing thru on-line companies and big box stores in addition to having authorized dealers is, in and of itself, bottom-feeding.
As an authorized dealer, he probably gets a better price on his purchases and possibly can compete or at least come much closer to competing with them than you or I could with HD or Lowe's. He certainly should be able to just retail units out like they do also if he chooses. As a dealer and installer he has his service side of things to make up for what he can't quite compete on in the sales department making him potentially an overall better choice than a big box store to some customers. The big box stores sell many other products that are otherwise considered reputable products this is just one product line and doesn't necessarily make the manufacturers of products sold by big box stores bottom feeders, they are just doing what they need to do to sell their product to as many consumers as possible.

Is 3M a bottom feeder because you can buy a roll of tape at a big box store?

ADD:

Maybe lets look at this a different way. You are entitled to your opinion of Generac being a bottom feeder.

Now lets say you have a product you manufacturer and distribute. Would you turn down offers from HD to buy your product and sell it in their stores? Negotiating a price is a different ballgame to some extent. But if they tell you they can get a competitors product at a certain price are you going to say no way or are you going to consider overall outcome from possibly selling more volume but at a little less profit and possibly make a deal with them? That is just business IMO.
 
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goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
As an authorized dealer, he probably gets a better price on his purchases and possibly can compete or at least come much closer to competing with them than you or I could with HD or Lowe's.
Not sure if you're correct on this. Several years ago when Generac recruited me to be a sales dealer I attempted to place my first order with them based on the price list they gave me. After figuring out the shipping, my mark-up and 7% NJ sales tax I found I was able to purchase from EG Direct for less $$. I know, for a fact, that as a simple sales dealer I was not getting the same pricing as EG Direct. They push out 100's of generators a month and get special pricing. If all the dealers got the same pricing then we all could be a bit more competitive.
He certainly should be able to just retail units out like they do also if he chooses.
No question about that but he probably doesn't have the marketing $$ that HD and Lowe's has to advertise or draw potential customers to him nor does he get the same pricing from Generac.
As a dealer and installer he has his service side of things to make up for what he can't quite compete on in the sales department making him potentially an overall better choice than a big box store to some customers.
So, because Generac decides to sell thru big box stores as well as on-line dealers that don't charge sales tax this poor chap, in order to land the job, has to go in low hoping to make a few $$ on the back end doing service work ? Not really a fair exchange IMHO.
The big box stores sell many other products that are otherwise considered reputable products this is just one product line and doesn't necessarily make the manufacturers of products sold by big box stores bottom feeders, they are just doing what they need to do to sell their product to as many consumers as possible.
If you're just pushing product out the door and not any other services then basic rules of sales apply - keep your overhead low, be competitive and try to do as much volume as you can.
Is 3M a bottom feeder because you can buy a roll of tape at a big box store?
Not really but they're just selling product

ADD:

Maybe lets look at this a different way. You are entitled to your opinion of Generac being a bottom feeder.
Maybe a poor choice of words on my part. Maybe greedy would be a better term.

Now lets say you have a product you manufacturer and distribute. Would you turn down offers from HD to buy your product and sell it in their stores? Negotiating a price is a different ballgame to some extent. But if they tell you they can get a competitors product at a certain price are you going to say no way or are you going to consider overall outcome from possibly selling more volume but at a little less profit and possibly make a deal with them? That is just business IMO.
No question about it. I'd want the large income mass marketing has to offer but by the same token I don't think it's right to establish dealerships who can't buy at the same price level the big box stores and on-line stores do. To make matters worse, when some poor, unsuspecting, non-dealer EC installs a job, after purchasing their gen-set from a company like EG Direct, discovers he has a problem with the unit, then and only then does Generac bring themselves up out of the gutter and tell the EC that he has to go thru a dealer in order to get answers and/or service.

In case I haven't made myself clear, I'm on the dealer's side. They make a large investment in becomming a dealer and getting the proper training to service the product. I think it's unfair to these dealers when companies like Generac sell their products thru companies like EG Direct, HD & Lowe's who offer no back-up assistance for the people they are selling to.

I'll get off the soap box now.;)
 

masonc

Member
Location
Anguilla
To be clear, there are no Lowes, HD or ACE where I am, so there is no issue there for me. Also, when I have beaten the regional sales manager up on this issue, they tell me that only certain models are available through box stores.
If a customer wants to buy direct from a box store, they are probably not who I am looking for. We tend to attract people who do not want to know anything about the generator except that it works and is well maintained.

I am more interested in selling the QT commercial line, and we just sold a 100KW industrial last week. However, we sell quite a few 20KW air cooled.
While I wish that Generac were not so available, I cannot fault their dealer support. They are a very slick operation, they give first class training, warranty support, parts, and offer a lot of dealer incentives. I could sell other brands but the support is not very good.
 

goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
To be clear, there are no Lowes, HD or ACE where I am, so there is no issue there for me. Also, when I have beaten the regional sales manager up on this issue, they tell me that only certain models are available through box stores.
If a customer wants to buy direct from a box store, they are probably not who I am looking for. We tend to attract people who do not want to know anything about the generator except that it works and is well maintained.

I am more interested in selling the QT commercial line, and we just sold a 100KW industrial last week. However, we sell quite a few 20KW air cooled.
While I wish that Generac were not so available, I cannot fault their dealer support. They are a very slick operation, they give first class training, warranty support, parts, and offer a lot of dealer incentives. I could sell other brands but the support is not very good.
OK. Understood. You're dealing mostly on the higher or commercial end of the market. Competition at that level starts to diminish and probably defaults to dealers only. My comments were primarily directed at the residential 20 KW and smaller units. Sorry I didn't make that clear.
 

kwired

Electron manager
Location
NE Nebraska
Not sure if you're correct on this. Several years ago when Generac recruited me to be a sales dealer I attempted to place my first order with them based on the price list they gave me. After figuring out the shipping, my mark-up and 7% NJ sales tax I found I was able to purchase from EG Direct for less $$. I know, for a fact, that as a simple sales dealer I was not getting the same pricing as EG Direct. They push out 100's of generators a month and get special pricing. If all the dealers got the same pricing then we all could be a bit more competitive.No question about that but he probably doesn't have the marketing $$ that HD and Lowe's has to advertise or draw potential customers to him nor does he get the same pricing from Generac. So, because Generac decides to sell thru big box stores as well as on-line dealers that don't charge sales tax this poor chap, in order to land the job, has to go in low hoping to make a few $$ on the back end doing service work ? Not really a fair exchange IMHO.If you're just pushing product out the door and not any other services then basic rules of sales apply - keep your overhead low, be competitive and try to do as much volume as you can.
Not really but they're just selling product

Maybe a poor choice of words on my part. Maybe greedy would be a better term.

No question about it. I'd want the large income mass marketing has to offer but by the same token I don't think it's right to establish dealerships who can't buy at the same price level the big box stores and on-line stores do. To make matters worse, when some poor, unsuspecting, non-dealer EC installs a job, after purchasing their gen-set from a company like EG Direct, discovers he has a problem with the unit, then and only then does Generac bring themselves up out of the gutter and tell the EC that he has to go thru a dealer in order to get answers and/or service.

In case I haven't made myself clear, I'm on the dealer's side. They make a large investment in becomming a dealer and getting the proper training to service the product. I think it's unfair to these dealers when companies like Generac sell their products thru companies like EG Direct, HD & Lowe's who offer no back-up assistance for the people they are selling to.

I'll get off the soap box now.;)

Again put yourself on the manufacturer/distribution side of things. Would you rather sell 100 units and fill a truck going to one destination with them or send 100 individual units to 100 different destinations? I bet shipping cost is less for the single load going to one destination. If you become a dealer and buy in the volume the big box store does, chances are you get pricing more in line with what they pay. This wouldn't be the only product line out there that sells in this way either. This is basically the concept of the big box store with most product lines they carry, purchase large volume to get better pricing, have it shipped it to a central warehouse of yours, and you can then distribute that volume to several of your branches as necessary, along with other products from your warehouse that are purchased in similar manner.
 
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