Why Work With a Capital Equipment Dealer? Why Not Go Directly to the Manufacturer?

Are you considering purchasing capital equipment? Concrete Plant, Asphalt Plant, Lathe, Press Break, Plate Shears, Packaging Equipment, Conveying Equipment, Automated Storage, Printing Equipment, Extrusion, and other larger high value equipment are all considered items of capital equipment. Below are some considerations you may find helpful in making a decision.

Same Pricing or Better

General Info to Understand

  • Not all manufacturers sell direct. Some manufacturers only sell through a dealer network, so by contacting the manufacturer they will simply direct you to a dealer that sells their equipment in your area. If a manufacturer does sell direct, the list price on equipment sold by the manufacturer and their dealers is commonly the same.
  • Manufacturers selling direct commonly staff a small sales team of salaried individuals, and will not typically negotiate much on the sales price of equipment ~ to keep their dealer network happy.
  • Manufacturers commonly offer dealers pricing significantly below list price to entice the dealer into using its own resources (staff and money) to market and sell their equipment.

Why would a Manufacturer do this?

It makes financial sense to a manufacturer. They do not have to incur the high cost associated with sales and marketing. By establishing dealers, a manufacturer can market its product over a larger territory leveraging the resources of local dealers that professionally market and sell associated products and services.

How could pricing from a dealer be cheaper than direct from the manufacturer?

As mentioned, to keep a dealer network happy and to not decrease the value of their equipment, a manufacturer sets a list price, and usually sells their equipment very near that list price. A dealer is more likely to offer significant discounts on the equipment because they are able to purchase the equipment at a wholesale rate and may choose to sell the equipment at a lower profit margin than the manufacturer suggests.

Enhanced Customer Service. Experience Larger Scope of Services.

Many dealers, offer multiple lines of equipment as well as installation and service of your equipment purchased… One company able to service all of your equipment, installation and maintenance needs… One company able to service, understand and troubleshoot your entire system. Most manufacturers will only service their own equipment, and often “blame” poor system performance onto another piece of equipment manufactured by a different company.

Better Communication / Greater Response.

The primary purpose of a dealer is to facilitate the sales and marketing efforts for a manufacturer. Equipment dealers are staffed, trained and equipped to help ensure you get the equipment and service you need. A manufacturer’s primary function is to manufacture and they are frequently not equipped to handle large volumes of inquires and sales activities. Best of all worlds Working with a dealer and taking advantage of all of the benefits a dealer has to offer does not preclude you from contact with the manufacturer. Most manufacturers want to get to know their customers… they just don’t want to have to find them.