Ag Equipment Pros Share Thoughts on Shortline-Only Dealerships
Lessiter Media Inc. recently polled a few experts on farm equipment sales and asked their thoughts on shortline-only dealerships.
Take a look at these excerpts from their responses:
Get Your Expenses In Order – “Theoretically, dropping a mainline should result in a decline of total sales. Getting the proper number of employees to address the reduced-sales level and reducing expenses proportionally can be a difficult task.
“But a reduction in gross sales should not mean an automatic reduction in gross margin. Perhaps, it should provide an opportunity for increased gross margin.”
—John Schmeiser, CEO of Western Equipment Dealers Association
Offer Value Over Mainline Dealers
“If you’re going to succeed as an independent supplier of specialty products to customers who purchase their main farm equipment from another dealer, you must know those customers far more thoroughly than do your competitors.”
—George Keen, Senior Consultant with Currie Management Consultants
Closely Manage Margins & Costs
“Without a major tractor line, the independent dealer often sells products with lower average prices. As a result, he must depend on selling higher unit volumes of less costly product, or he must maximize the margin on each sale. So, in addition to a concentrated customer focus, these dealers must also focus on closely managing their costs.”
—George Russell, Executive Partner with Currie Management Consultants
Schmeiser also said in his response: “I expect to see more shortline-only locations as increasing demands from the mainlines encourage dealers to reduce their overhead and focus on speciality products where they can make a significant profit. There is growing pressure from the full-line manufacturers on their dealers to focus only on their products. To get a better foothold in their distribution channels, shortline manufacturers will need to treat their dealers better than the mainliners do. This will encourage dealers to make the shortline his mainline.”
Lessiter Media published the advise as part of a shortline-focused series. See it at FarmEquip.org/series. S