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I was looking at the Northern Tool catalog that came in the mail. They have a section with lawn mower engines. I was suprised that a normal Brigsg I/C 16 hp was $679. And the Vangaurds 18 hp were $1079. That got me thinking about what goes into the price of a Lawn Tractor. What would be your guess % wise.

Motor %, Transmission %, Frame %, Sheet metal%, mowing deck assembly%, tire/wheel %, assembly labor%.
 

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IMO for the whole business thing to work, the manufacturerer would have to buy the engine for about $450(the 18.5 Vanguard). Otherwise, nobody could make money. It's suprising how much the price goes down when you buy in large quantities.
The total manufacturing cost has to be approximately 50% of actual normal-sell price.
 

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I once worked for a company that produced floor pads for buffing machines, we were 2nd to 3M.

Overhead was 50% of the manufacturing cost with materials being 25% and labor being 25%.

I wouldn't let an order go out the door below 30% above cost and strived for 40% above cost. This was wholesale of course. Our retailers would get an additional 20 to 50 percent.

With using those numbers a $2000 tractor would cost $350 in materials. I would be willing to bet with manufacurers like AYP and MTD labor costs are pobably in the 12% range. With that a mower would be $616.00 which is probably not far off.
 

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I would think there is a measurable percentage just to cover liability insurance. I remember reading once that a $100 ladder had $40 in the price to cover liability insurance and lawyers.
 

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Well, this thread is very eye-opening as to manufacturing costs, list prices, margins, overhead, sales/marketing, distributor, dealer and profit margins.... man it would make your head spin.

Prices & Dealer Profit:
Let me take a stab at it. According to a buddy of mine that used to run lawn equipment dealerships: In general, about 25-30% off list is the dealer cost, often selling about 115% markup, usually run about 3-5% of gross sales as profit if they're doing good. The only way to make $ these days is through volume. And most manufacturers don't offer that kind of margin (25-30%) any more. Many are down to 15% to 20%, even with volume. And, that 25-30% wasn't your "profit". It was what you made on that one piece of equipment to help pay for rent/mortgage, utilities, insurance, payroll, advertising, taxes, etc., before you could see any profit. (back to that 3%-5% gross sales number)

And then there are the manufacturers like MTD, who sell identical Yard Machines mowers to dealers for about the same cost as the mass merchants sell them retail. So there is not alot of margins in lawn equipment --- I would guess that perhaps the more expensive units (JD) and CUTs might have more cushion in em for profit.

Now back to your original question of cost to build:
I would say that for standard $2000 LT -
Cost of materials & labor - $700
Engine - $175 (~25%)
Transmission - $100 (~14%)
Frame - $70 (~10%)
Wiring, battery, electrical - $30 (~4%)
Mower deck, blades - $50 (~7%)
Tires, Wheels - $50 (~7%)
Belts, misc hardware - $25 (~3.5%)
Labor - $100 (14% - might be high --- probably closer to 12%)
Insurance, Emissions Regulations, Overhead - $100 (14%)

Just my guesstimation. Selling to dealer for $1400-1600.

Who knows.
Andy
 

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Years ago I was involved in the material handling industry ie: lift trucks; forklifts, etc....The margins were tight in the sales area of the books....the biggest moneymaker was the parts department....many times selling at 200% margins..
 
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