What is really involved becoming a generator dealer ?

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gene6

Senior Member
Location
NY
Occupation
Electrician
Greetings group I am interested in whats involved in becoming a generator dealer, primarily for residential / commercial optional standby.
There seem to be 3 main brands I see often
Cummins , Kohler and Generac possibly others.
How many classes did you have to take?
About how much did it cost you in total to become a dealer?
And was it worth it?
Thank you for your feedback
 
Here's my experience/opinion.

The only way to really be successful is to go all-in on generator sales & service. Its not a secondary service you can offer and make money. We sell Generac and the margin is about 4%, and then you have to pay freight to get it to you. If you're a high-volume dealer its better around 10-15%, and you're ordering a whole truckload of them to offset the per-unit freight cost. You also can't compete with Home Depot & Lowe's or any of these online dealers. You can't sell for less than MSRP and make money. I can go to my local supply house and buy a Generac for less than what it costs me as a low-volume dealer because I don't have to pay the freight.

The money is in service. If your goal is to sell anything less than 100 a year, you're wasting your time. I'm certain others will disagree. You're selling a product that REQUIRES maintenance and attention. You need a tech that is hands-on with them every day that can fix them quickly, not working on 2-3 a year.

I started selling them because existing customers kept asking me repeatedly about it. I've sold maybe 2-3 dozen in the last couple of years and all I did was create more work I didn't have time for. I don't have time to run around and check these things every time a storm is coming, or do the oil changes, but I have to because I sold them. Now I just flat out refuse new sales and send them to a friend of mine that is a really high volume dealer.
 
Thank you that is confirming my suspicion, I am interested in doing the 'factory authorized' service work more than the sales / install volume. I realize allot of the service work is not 'electrician' type work and that is where my semi-retired mechanic friend would fit in.
 
Kohler gave us a cool sign to put outside the shop. Other than that I dont have much positive to say about the dealer aspect. Unless you really want to do mechanic work on an engine in the middle of winter rather than electrical work. And thats if Kohler sends you the right parts. Otherwise you just have power loss paranoid homeowners calling nonstop wondering when you will be there to fix it. We had one lady call every day for two months about an air filter on backorder. Id love to just go back to installing without being a dealer.
 
What I am not clear on is whats the bottom line on becoming a dealer? How much cash out of pocket and how many classes etc. (and yeah I guess I just have to navigate thru a bunch of sales people whom then never stop calling)
 
As far as cash out of pocket it really comes down to what you need for tools. Do you have mechanic tools, concrete tools for pads, a way to transport them to site, a way to set them once on site.

The classes are usually free but on the same token if you view sitting in the class as lost productivity hours then they can get pretty expensive. Usually 1-2 days per year.
 
gene6 said:
Thank you that is confirming my suspicion, I am interested in doing the 'factory authorized' service work more than the sales / install volume. I realize allot of the service work is not 'electrician' type work and that is where my semi-retired mechanic friend would fit in.
Click to expand...

You're not going to get much service work if you're not selling them. I can tell you with Generac its a ranked system when customers call into the 800 number. Its you, versus the guy with every single part needed in his warehouse. My buddy that is big into Generac has thousands of parts on hand, a couple dozen service techs, orders generators 200 at a time, covers three states, etc.. etc... That's the sort of dealer you're likely competing against when someone calls the manufacturer. You need to build your own service customer base through sales. Not trying to talk you out of it but I am giving you the best advice I can based on my experience.

As for cost out of pocket, you can do it for $1k. The online classes to get started are free. The in-person classes are about $500/ea; you need to do liquid cooled and air-cooled. Since covid, Generac has been traveling around the US doing them instead of requiring everyone to fly to Wisconsin. You have to attend the in-person training to buy parts and get phone tech support.

This applies to Generac only, but the next big push from them is "clean energy"... They are making a big push into battery backup power, and they want their dealers to attend this training and get certified. So that's another area you'll need to become proficient in to be a preferred dealer.
 
When I was working our service dept went into Generac sales and got out as quick as they could. Hearing them talk it was a loosing venture from the very first one they installed. That was a few years back so things might have changed.
 
So all around thumbs down unless your moving 200 generators at a time.
Generac charges about 1k
Kohler apparently is free.
Anyone on here a Cummins dealer?
 
My suspicion is that this is like a lot of specialty type things. It requires enough work to keep the expensive people that you need to do the work busy. Otherwise you are wasting your time. And time wasting is very expensive.

If you have enough work to keep those expensive guys busy, it's probably a pretty good line to get into. But I don't think it's a side gig. People think it is because it's got wires on it so it's a good thing for electricians to get involved in.

It's like doing alarm or data work. If you don't do enough of it to keep the guys that get good at it busy you're probably not going to make any money at it.
 
gene6 said:
So all around thumbs down unless your moving 200 generators at a time.
Generac charges about 1k
Kohler apparently is free.
Anyone on here a Cummins dealer?
Click to expand...

Yeh, pretty much.

I know our local Cummins dealer. It’s no different than any other brand. They mostly do industrial generators and they have another division doing water quality. That’s their two niche markets.


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brantmacga said:
Yeh, pretty much.

I know our local Cummins dealer. It’s no different than any other brand. They mostly do industrial generators and they have another division doing water quality. That’s their two niche markets.


Sent from my iPhone using Tapatalk
Click to expand...
Yeah, Cummins is like Generac when it comes to servicing, if you get their control app. They refer you to the closest dealer and that dealer has to accept you as a customer before they will do anything for you. I install 3-4 Cummins a year, got another install coming up soon. I don’t bother being a dealer.
 
brantmacga said:
Here's my experience/opinion.

The only way to really be successful is to go all-in on generator sales & service. Its not a secondary service you can offer and make money. We sell Generac and the margin is about 4%, and then you have to pay freight to get it to you. If you're a high-volume dealer its better around 10-15%, and you're ordering a whole truckload of them to offset the per-unit freight cost. You also can't compete with Home Depot & Lowe's or any of these online dealers. You can't sell for less than MSRP and make money. I can go to my local supply house and buy a Generac for less than what it costs me as a low-volume dealer because I don't have to pay the freight.

The money is in service. If your goal is to sell anything less than 100 a year, you're wasting your time. I'm certain others will disagree. You're selling a product that REQUIRES maintenance and attention. You need a tech that is hands-on with them every day that can fix them quickly, not working on 2-3 a year.

I started selling them because existing customers kept asking me repeatedly about it. I've sold maybe 2-3 dozen in the last couple of years and all I did was create more work I didn't have time for. I don't have time to run around and check these things every time a storm is coming, or do the oil changes, but I have to because I sold them. Now I just flat out refuse new sales and send them to a friend of mine that is a really high volume dealer.
Click to expand...

This is what I do ... I install a new HVAC system, then sign them up on a yearly maintenance contract. For HVAC, its two inspections per year, at around $250.00 a year. So, multiply it by how many customers you have, that's guaranteed income for the year plus the normal service calls. I have been doing this since 1976, it has worked for me. If you are just starting out on this it doesn't seem like much, but it is just like compounding an investment.
 
gene6 said:
Greetings group I am interested in whats involved in becoming a generator dealer, primarily for residential / commercial optional standby.
There seem to be 3 main brands I see often
Cummins , Kohler and Generac possibly others.
How many classes did you have to take?
About how much did it cost you in total to become a dealer?
And was it worth it?
Thank you for your feedback
Click to expand...
When I checked with Generac at one point to be potentially an installer/dealer, there was a requirement to purchase X dollars of maintenance, repair materials per year, or they would pull your authorization as an installer/dealer. Non dealer costs generally have been a non-starter for most customers when bidding a gen install, especially given big box have been advertising sale of Generac on their pages.
 
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