Analyzing the mail-order tractor.

If you make, sell, service or buy tractors, you've probably wondered what the deal is with the Agri-Power 5000, the mail-order tractor being sold for $5,995 by Wholesale America, Inc. (WSA) out of Eau Claire, wis.

Advertising proclaiming it "The Undisputed BEST Tractor Value in the World" and "Compare at $15,000" have run in the farm press and the Wall Street Journal.

The fall, 1984, catalog from WSA carried a facsimile letter, signed by WSA president Gary Dreher, stating "1700 Agri-Power Tractors Sold!"

So what's the story?

As near as I can tell, the Agri-Power 5000 is basically the same as the Zetor 5011, a Czechoslovakian tractor also sold in the U.S. through Zetor Tractors, a division of American Jawa, Ltd., which in turn is controlled by Motokov, the Czech state-owned foreign trading company.

The spec table supports that statement, and the two photos, from Zetor and Agri-Power sales brochures, bear a striking similarity.

If I'm pussyfooting, it's because Dreher, whom we telephoned in mid-November, doesn't agree with my conclusion, and it's only fair to give him his say. Some Agri-Power history

In March, 1982, I&T Editor Bill Fogarty did a column about Agri-Power tractors sold by Menard, Inc., also a Eau Claire, Wis. Those were Fiat tractors, made in Argentina, from 46 to 133 pto hp, priced from $6,900 to $19,900.

The Menard, Inc., Agri-building Div., had imported 1,020 of those tractors, and sold them through 14 retail outfits and by mail order.

Dreher told me the current crop of tractors are not Fiats. He said the Agri-Building division is offering them for lease, but the primary sales outlet is by direct sale to farmers or end users.

Dreher told me that WSA is owned by John Menard, the principal in Menard, Inc., but added "we are not a spinoff of Menard, Inc."

Nonetheless, when we phoned WSA for literature on the Agri-Power 5000, the package that arrived carried material bearing the Menard, Inc., name and warranty statement. It's probably not a big deal, but we ought to clarify it at the outset.

I asked Dreher if the tractor is a Zetor, as claimed by Bill Bousson, Zetor's national sales manager.

"What we have here is an Agri-Power tractor," Dreher responded. "It's built with parts from throughout the world: Czech, German, Italian and U.S. parts. About 25 per cent is U.S. parts and labor, which you have to add in because that's a part of the costs."

Agri-Power literature says the machine uses B.F. Goodrich or Goodyear tires and a Sears Die-Hard battery. Bousson says his Zetor 5011 uses Czech-made Barum tires and a Czech battery. Bousson also says the Agri-Power uses a different, lighter, front axle than the one on the Zetor 5011. Dreher wouldn't comment on that matter.

The table doesn't cover all specs of the two tractors, but to me they seem virtually identical. Variances could come from the different tires used, affecting track and weight, and differences in converting metric into English units. Also, curb weight and shipping weight are different measures. Compared to what?

Neither the Zetor nor the Agri-Power has gone through Nebraska Tractor Test Lab certification, so there's no impartial body of research in the U.S. to give exact figures on either machine. Both Dreher and Bousson say they base their statistics on reports from OECD, the European Common Market body that sets tractor test standards.

All this concern with math can be important to a dealer whose customer is carrying an Agri-Power ad or brochure that says "Compare at $15,000, now only $5995."

If the dealer handled Zetor, says Bousson, he could have picked up model 5011 tractors at a special close-out price of $4995, which included power steering and a heavier front axle. A sale at $5995, matching the Agri-Power 5000 price, would net the dealer a decent profit.

If the reader will admit the similarity of the two tractors, then our hypothetical dealer could tell that ad-waving customer something like, "Wadda you mean, compare at $15,000? Let's compare it with the Zetor!"

Wholesale America did some comparison pricing in a catalog that arrived at the I&T office last March. That comparison showed four tractor models.

Here's how the WSA comparison chart read. We've inserted in parentheses the pto hp shown in Nebraska test reports, or manufacturer estimates, as reported in the 1983 and 1984 Red Books. Remember that the Agri-Power 5000 is rated, by WSa or Menard, at 42.2 pto hp, although the main head on large ads, and the headline in smaller ads, reads "46 HP DIESEL TRACTORS":

Note that while the WSA comparison uses the term "Mfgs. List" with the dollar figures, a sentence printed above the table said, "COMPARE PRICES! Here are the prices of top brand tractors as quoted on the phone by their own dealers."

I asked Dreher a few questions about the comparison chart. Why were tractors in the 50 hp range used for comparison, not tractors in the 40 hp range? Why wasn't the price of the Zetor used in the comparison, since it appears comparable in specifications? Why has the comparison table not appeared in WSA catalogs and ads in recent months, although the line "Compare at $15,000" remains? Here are his responses.

"We used popular brands and models for comparison. We wanted to give people something they were familiar with. If you were comparing cars, you would use Ford and Chevy, not Peugeot.

"I don't think we misrepresented. We listed tractor models and horsepower. There was no misrepresentation as to the model and horsepower.

"The table was put in when we first ran the ads. I decided not to put it in there after three or four months. There was no pressure or complaint. As you know, advertising costs are based on space.

"What we're trying to get across is we've acquired a very quality-built tractor. We outweigh every 50-hp tractor in the U.S., and offer it an unbelievable price to the farm market.

"The comparison would be just as valid if other tractors with lower horsepower ratings were used in the table. Notice the line says compare at $15,000, while the average prices shown in the table are much higher."

Let's lok at the Red Book one last time for the weights on the comparison tractors against the 5,226 lbs. of the Agri-Power 5000: Deere 2350--7,630 lbs.; Case 1290--5,390 lbs.; Allis 5050--4,150 lbs.; IH 584--5,890 lbs. Word from Nebraska

As noted earlier, neither the Zetor nor the Agri-Power 5000 have been tested in Nebraska, and by law an uncertified tractor can't be sold in that state.

Chris Shubert, attorney for the Nebraska Dept. of Agriculture, told us that several months ago he sent a letter to WSA and Menard notifying them "to discontinue advertising that is likely to reach the Nebraska public unless it has a disclaimer that the offer is not valid in Nebraska." Shubert said no further formal action was taken, as none seemed to be needed.

I&T had some people in Nebraska call WSA to request literature, but they received none.

Dreher said he wasn't too happy with Nebraska's request, but complied with it. "We would like to go through the Nebraska tests," he said, "but they are so expensive we'd have to raise the price of the tractor. It's a very efficient tractor, as shown in OECD testing. I wish Nebraska and OECD would get some arrangement to accept each other's figures.

"I think the Nebraska tests are a very good thing, but with the cost of the tests, it seems in this situation they only harm the good people of the state of Nebraska, since they're being told we can't sell them our tractor." What about service?

Dreher said WSA stocks parts to service the tractors, and has a "10-year minimum guaranteed parts availability which goes on as long as we're in business." To get warranty service, he said, the owner purchases parts from WSA, installs them, sends the bad parts back to WSA and receives a check for the parts and a flat-rate labor payment.

"One thing customers really like is the flat-rate warranty, because there's no middleman," Dreher said. "Dealers have to reduce their parts inventory to stay alive. Any time you have only one central location, as we do, it's so much easier to keep all the parts in stock."

Back at Zetor Tractors, Bousson says he's had to overstock on parts to handle the needs of the Agri-Power tractors. He says Zetor will sell parts at discount only to Zetor dealers. All others must pay full list price and accept C.O.D. order.

"The tractor is being sold under the Agri-Power name, not Zetor, so theoretically there's no obligation on my part to take care of warranty claims," Bousson said. "They dealt direct with Motokov, and are outside the dealer system we've established for Zetor." Some final numbers

Bousson contends the Agri-Power is a czech tractor; Argentinian Fiats were bought by Menard and sold as Agri-Power tractors, and that figure was never disputed.

Dreher said he wasn't sure if the, 1,700 figure included the Argentine tractors, or only the current batch. He said he could check out the exact sales data, but didn't when we spoke.

Let's look at U.S. Commerce Dept. import figures for tractors in the 40 to 80 hp range. In 1983, through Sept. 30, two Czech tractors in that range were imported. By Dec. 31, the count had risen to 184. For 1984, through Sept. 30, 676 Czech tractors were imported, valued at $3,368,005, an average unit value of $4,982.25.

In the 12 months ending Sept. 30, 1984, someone imported 858 Czech tractors in the 40-80 hp range.

Many dealers may ask, "Is this a one-shot deal, or will Agri-Power be around a while?"

Dreher told me, "This is not a closeout. They are finish assembled in Eau Claire at our plant. We are not a tractor liquidator. We are a main line, with a theme of no middleman. Often we're looked at so negatively. I think it's because we're not following the traditional lines, we're going direct to the buyer.

"I suspect that the same dealers who are upset are the ones who tried to call us, dealers who want to get financing. We offer no credit for a dealer or a retail buyer. We have our own way of doing things, and we've been successful. We're just trying to make a living."