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

[goldstar]

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.

I'm not arguing with you on this point. Yes, if I were a manufacturer I'd want the most $$ from sales of my merchandise. But in this case it's more than just mere merchandise I'm pushing out the door. I'm providing a product that requires installation by highly qualified people and can be dangerous if improperly installed. There's a lot more liability at stake here by comparison to a 3-M roll of tape. At least in the case of EG Direct the people you speak to on the phone are knowledeable about the product and will steer you in the right direction when making the purchase. Could you really classify clerks at HD or Lowe's as being qualified to make the correct sale of this type of equipment ?

As far as a dealer goes, the only protection he's getting from Generac and companies like them is on the technical or service end of the sale. He's getting no price protection up front so, on top of being a highly qualified technician he now has to become a highly qualified salesman in order to convince people thay should buy at a higher price from him rather than go to EG Direct, HD or Lowe's.

 

[masonc]

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.

When a customer is interested in a generator and I determine they are inviting other bids, I don't try to sell based on price. I sit with the customer and explain what a real warranty is, and why a real warranty is important. All of the local electricians offer generators. They are reselling product offered by a distant dealer, and have no qualifications to service and warranty the equipment. There is no real warranty. Because we are a Generac Service Dealer, we have the full backing of Generac. That means a lot in a remote location, especially to a commercial customer.
You can't compete on price against Lowes. You have to bring something else to the deal.

 

[John120/240]

I am surprised that HD or Lowes hasn't offered a Saturday morning class on generator installation.
*Bathroom tile at 9:00 am
*Generators at 10:00 am
*Build a bird house at 11:00 am

 

[goldstar]

When a customer is interested in a generator and I determine they are inviting other bids, I don't try to sell based on price. I sit with the customer and explain what a real warranty is, and why a real warranty is important. All of the local electricians offer generators. They are reselling product offered by a distant dealer, and have no qualifications to service and warranty the equipment. There is no real warranty. Because we are a Generac Service Dealer, we have the full backing of Generac. That means a lot in a remote location, especially to a commercial customer.
You can't compete on price against Lowes. You have to bring something else to the deal.

I can appreciate your position and your admirable salesmanship quality out there in your remote location, wherever that is. Here in NJ electricians are cutting each others throats for jobs. We even have a local Generac dealer in the area beating out other Generac dealers' installed gen-set prices by $1K. So, while your expert salesmanship is an admirable quality it wouldn't amount to a hill of beans in a market that currently exists here where supposedly potential customers don't want to by a gen-set in the first place. $$ means everything to many people here. If we are talking about a few thousand $$ there wouldn't be a problem. When you're up in the 20KW permanently installed residential units you're asking some people to take out a 2nd mortgage. You probably won't run into that in the high-end commercial sales but when you get down into that lower KW area you're slinging mud in the gutter with a bunch of cut throats. Another factor that comes into play is going labor rates. I'm sure they vary from State to State but to be quite frank, they even vary greatly from county to county here in NJ. So, now your choice is to make less $$ on the sale of the unit or hire a day worker off the roadside to do the installation.

As a rule, I don't look for generator installs for just these reasons. If a gen-set job comes my way I'll take it but IMHO, more trouble than what the job is worth. I'm happy that Generac has worked out for you. It hasn't worked for most of the EC's in my association.

 

[kwired]

I'm not arguing with you on this point. Yes, if I were a manufacturer I'd want the most $$ from sales of my merchandise. But in this case it's more than just mere merchandise I'm pushing out the door. I'm providing a product that requires installation by highly qualified people and can be dangerous if improperly installed. There's a lot more liability at stake here by comparison to a 3-M roll of tape. At least in the case of EG Direct the people you speak to on the phone are knowledeable about the product and will steer you in the right direction when making the purchase. Could you really classify clerks at HD or Lowe's as being qualified to make the correct sale of this type of equipment ?

As far as a dealer goes, the only protection he's getting from Generac and companies like them is on the technical or service end of the sale. He's getting no price protection up front so, on top of being a highly qualified technician he now has to become a highly qualified salesman in order to convince people thay should buy at a higher price from him rather than go to EG Direct, HD or Lowe's.

You can't make similar claims about other products sold at HD or Lowe's?? And I'm not talking just the electrical department either.

When a customer is interested in a generator and I determine they are inviting other bids, I don't try to sell based on price. I sit with the customer and explain what a real warranty is, and why a real warranty is important. All of the local electricians offer generators. They are reselling product offered by a distant dealer, and have no qualifications to service and warranty the equipment. There is no real warranty. Because we are a Generac Service Dealer, we have the full backing of Generac. That means a lot in a remote location, especially to a commercial customer.
You can't compete on price against Lowes. You have to bring something else to the deal.

Big box is about retail sales.

Authorized dealers are about complete service/complete installation of what they sell. There is a difference between selling a model number, and selling an installation that includes that model number. Then there is the money making sale of extended warranties, but both businesses may well do that.

I can appreciate your position and your admirable salesmanship quality out there in your remote location, wherever that is. Here in NJ electricians are cutting each others throats for jobs. We even have a local Generac dealer in the area beating out other Generac dealers' installed gen-set prices by $1K. So, while your expert salesmanship is an admirable quality it wouldn't amount to a hill of beans in a market that currently exists here where supposedly potential customers don't want to by a gen-set in the first place. $$ means everything to many people here. If we are talking about a few thousand $$ there wouldn't be a problem. When you're up in the 20KW permanently installed residential units you're asking some people to take out a 2nd mortgage. You probably won't run into that in the high-end commercial sales but when you get down into that lower KW area you're slinging mud in the gutter with a bunch of cut throats. Another factor that comes into play is going labor rates. I'm sure they vary from State to State but to be quite frank, they even vary greatly from county to county here in NJ. So, now your choice is to make less $$ on the sale of the unit or hire a day worker off the roadside to do the installation.

As a rule, I don't look for generator installs for just these reasons. If a gen-set job comes my way I'll take it but IMHO, more trouble than what the job is worth. I'm happy that Generac has worked out for you. It hasn't worked for most of the EC's in my association.

Supply and demand ultimately still rules the business world. Sounds like there are more electricians than needed in your area, at least for this kind of installation, therefore the demand is low. If the demand were high and there weren't enough individuals that can do the work, you could charge a lot more and they will take you just because it is hard to get anyone to do the work. That is just how business works, and effects all businesses.

 

[tom baker]

Siemens sells generators made by Generac. check with your Siemens wholesale house and see what they can do for you.
It seems like all the generators are made in Wisconsin. I wonder how many come out of the same factory?

 

[goldstar]

Siemens sells generators made by Generac. check with your Siemens wholesale house and see what they can do for you.
It seems like all the generators are made in Wisconsin. I wonder how many come out of the same factory?

A lot, I'm sure. I once had to re-attach an electric service that was ripped off a house after Hurricane Sandy. They never lost power but I had to re-install the SE cable. In order to do so I had to cut the triplex and re-route it. They had a gen-set with a Carrier name brand on it. My Generac key opened the enclosure and everything inside was made by Generac.

 

[masonc]

Generac makes machines for Carrier and Caterpillar.

 

[LEO2854]

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:

Welcome to the forum

first,make up a price list for each size generator,Go to Norwall on line,so you'll know your cost,Make sure you know the permit fee for the town before you price the job,could be $25 or $200 depending.

Give them a Grand total price only.

Sell the job as a package and don't fall for the we will but the stock line,you'll never make money letting them buy the stock,and you'll be exposing your hourly rates too.

If they make $30 an hour at work,they're not going to care why you need to charge $150 an hour.

Then sell them a maintenance package,once per year.

 

[Daja7]

Welcome to the forum

first,make up a price list for each size generator,Go to Norwall on line,so you'll know your cost,Make sure you know the permit fee for the town before you price the job,could be $25 or $200 depending.

Give them a Grand total price only.

Sell the job as a package and don't fall for the we will but the stock line,you'll never make money letting them buy the stock,and you'll be exposing your hourly rates too.

If they make $30 an hour at work,they're not going to care why you need to charge $150 an hour.

Then sell them a maintenance package,once per year.

I suppose every area is different. In my area we have a lot of dealers. Some lowballers some quite high. I am in the middle with most. I do not care if a customer wishes to purchase the generator themselves. They really save no money. My mark up is on the job not the material. I price it with me supplying and with them provideing. I do not mark up material or equipment. The job is basicaly the same if i do a 10kw or a 20 kw. material a little higher but labor is the same. My margin on a generator averages around $2,200.00 after labor, material and permits. Takes two guys one day to install. I never lose out on a HD or lowes.

 

[goldstar]

I suppose every area is different. In my area we have a lot of dealers. Some lowballers some quite high. I am in the middle with most. I do not care if a customer wishes to purchase the generator themselves. They really save no money. My mark up is on the job not the material. I price it with me supplying and with them provideing. I do not mark up material or equipment. The job is basicaly the same if i do a 10kw or a 20 kw. material a little higher but labor is the same. My margin on a generator averages around $2,200.00 after labor, material and permits. Takes two guys one day to install. I never lose out on a HD or lowes.

Everybody prices up a job differently. It's OK to say that you don't mark up material but your margin is approx. $2200/job so in the end you still make $$. This is just a personal preferrence but as a rule I won't buy something for $1.00 and sell it for $1.00. It's just bad business IMHO. In addition you're running those $$ through your account or credit line. Why not make a few $$ up front ?

 

[Greg1707]

Generator sales

Generator sales

Most of my costumers have been eager to purchase the generator themselves from Home Depot online or Generator Direct. I do not discourage them. I am not a dealer and am not equipped to service or repair the equipment. If the customer supplies the equipment then they own any problems with the equipment.

Another thought about this. The home generator is a new product. Sales are increasing each year. At some point the generators will need servicing, repair and replacing. The opportunity for dealers to make money may be a few years from now when the older generators will need attention. Only dealers will be setup to take advantage of these opportunities. Maybe it will be like automobiles. Repair, towing, repainting, and mending of automobiles probably adds more to the economy than sales of new automobiles.

 

[kwired]

Most of my costumers have been eager to purchase the generator themselves from Home Depot online or Generator Direct. I do not discourage them. I am not a dealer and am not equipped to service or repair the equipment. If the customer supplies the equipment then they own any problems with the equipment.

Another thought about this. The home generator is a new product. Sales are increasing each year. At some point the generators will need servicing, repair and replacing. The opportunity for dealers to make money may be a few years from now when the older generators will need attention. Only dealers will be setup to take advantage of these opportunities. Maybe it will be like automobiles. Repair, towing, repainting, and mending of automobiles probably adds more to the economy than sales of new automobiles.

Though this is an expensive enough item that it is worth minor repairs, it is like everything else these days if it comes to a major repair - it makes more economic sense to replace than to repair in most cases.

 

[brantmacga]

Generac dealer pricing is determined by how many units you are buying from them each year; buy more pay less. Our prices were slightly better than what we could get them for at home depot.

Also, if you don't take the classes, you're not getting tech support. You can be a dealer and not take their training, but don't expect any help from generac when you have one go down. So it's pointless to not take them.

we don't sell generac any more. Had a customer drop 20k in a generator. 45 days before the warranty ran out, the unit had an engine go bad. Called generac, and they were certain it wasn't the engine. Spent the next 45 days replacing almost everything but the engine. We made at least a dozen trips replacing parts generac would send, knowing it wouldn't work, but had to anyway. So, during all this, the warranty runs out, and generac says "sorry, you're on your own." customer was livid, but there was nothing we could do. Generac washed their hands of it, and we lost a customer. Just an FYI for anyone considering selling their products. They do play favorites with large dealers. We didn't sell many of them compared to guys that do generator work exclusively, so they really had no interest in working with us.

 

[goldstar]

we don't sell generac any more. Had a customer drop 20k in a generator. 45 days before the warranty ran out, the unit had an engine go bad. Called generac, and they were certain it wasn't the engine. Spent the next 45 days replacing almost everything but the engine. We made at least a dozen trips replacing parts generac would send, knowing it wouldn't work, but had to anyway. So, during all this, the warranty runs out, and generac says "sorry, you're on your own." customer was livid, but there was nothing we could do. Generac washed their hands of it, and we lost a customer. Just an FYI for anyone considering selling their products. They do play favorites with large dealers. We didn't sell many of them compared to guys that do generator work exclusively, so they really had no interest in working with us.

That's what I call a high quality manufacturer.:rant::thumbsdown: Always there when you need them.

 

[petersonra]

It is going to be very hard for any manufacturer that is trying to get his products into someone's home not to sell through the big box retailers.

I would not be surprised to find that a lot of generator sales come about just because someone sees one in a Home Depot display and thinks it is a good idea. Not many people would even think of getting a home generator. Walking by a display showing one as a normal part of a house might well set one to thinking about getting one.

 

[goldstar]

It is going to be very hard for any manufacturer that is trying to get his products into someone's home not to sell through the big box retailers.

I would not be surprised to find that a lot of generator sales come about just because someone sees one in a Home Depot display and thinks it is a good idea. Not many people would even think of getting a home generator. Walking by a display showing one as a normal part of a house might well set one to thinking about getting one.

No question about that. EC's don't have the marketing draw of a big box store. So as brantmacga mentioned "if you don't take the classes, you're not getting tech support. You can be a dealer and not take their training, but don't expect any help from generac when you have one go down. So it's pointless to not take them."

IMHO, it's also pointless on the part of Generac to open up an EC as a "sales only" dealer. He's not going to get any special pricing unless he orders a dozen gen-sets and has them shipped to the same location. How many of us have the wherewithal to do that ?

 

[kwired]

It is going to be very hard for any manufacturer that is trying to get his products into someone's home not to sell through the big box retailers.

I would not be surprised to find that a lot of generator sales come about just because someone sees one in a Home Depot display and thinks it is a good idea. Not many people would even think of getting a home generator. Walking by a display showing one as a normal part of a house might well set one to thinking about getting one.

One other thing is really effective at promoting generator purchases - the loss of utility power for an extended period.:happyyes:

No question about that. EC's don't have the marketing draw of a big box store. So as brantmacga mentioned "if you don't take the classes, you're not getting tech support. You can be a dealer and not take their training, but don't expect any help from generac when you have one go down. So it's pointless to not take them."

IMHO, it's also pointless on the part of Generac to open up an EC as a "sales only" dealer. He's not going to get any special pricing unless he orders a dozen gen-sets and has them shipped to the same location. How many of us have the wherewithal to do that ?

Exactly why I'm not a Generac dealer, or a Ford, Chevrolet, Dodge dealer or a dealer for many other big items either:happyyes:

If you want to take that on you either need to dedicate most of your time to that one product line or have a big enough organization you can dedicate at least one individual to that particular line.

 

[Daja7]

Everybody prices up a job differently. It's OK to say that you don't mark up material but your margin is approx. $2200/job so in the end you still make $$. This is just a personal preferrence but as a rule I won't buy something for $1.00 and sell it for $1.00. It's just bad business IMHO. In addition you're running those $$ through your account or credit line. Why not make a few $$ up front ?

ultimately how you get to the profit is irrelevant. markup is markup. My only thought is if i get in the habit of marking up a job vs material i make the same whether the customer supplies the material or not. My price reflects all material used. I know what i need to make per hour or per day.
that is applied to every task. If any fees or interest is part of my cost of doing business it is included in built up rate. Bottom line is make a profit however you decide to come to the final number.

 

[kwired]

ultimately how you get to the profit is irrelevant. markup is markup. My only thought is if i get in the habit of marking up a job vs material i make the same whether the customer supplies the material or not. My price reflects all material used. I know what i need to make per hour or per day.
that is applied to every task. If any fees or interest is part of my cost of doing business it is included in built up rate. Bottom line is make a profit however you decide to come to the final number.

True, how it is presented to the customer is the key in many cases to a better relationship with the customer. If you give them a detailed invoice with an item that says something like "material markup" on materials they purchased themselves, they will think you are trying to rip them off. If you hide that markup in something else that seems legitimate to them they may not even question anything - and the invoice total is the same either way.