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  IN THIS ISSUE                            APRIL/MAY 2014 

Shortline Dealer Finds
Success with Many Lines

Brand diversity allows Flaman Ag to negotiate with suppliers and meet its customers’ needs.

Back in 1959, Frank Flaman made the jump from farmer to farm equipment dealer somewhat by accident. Flaman was in need of four new grain bins, but was told if he ordered 10 he’d qualify for dealer pricing. So he ordered 10 and was able to quickly sell the additional six bins for a profit. He used it to place another order, says Don Flaman, co-owner and one of Frank’s three sons now involved in the resulting business, Flaman Agriculture.


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The Flaman Group of companies operates 9 ag equipment dealerships throughout Western Canada. The group represents 27 different product lines.

Photo Courtesy of Flaman Agriculture

From that first purchase of 10 grain bins over 50 years ago, Flaman has grown into a 9-store specialty equipment dealership in Western Canada with 150 employees. In the 1990s the company diversified and now, in addition to the ag division, Flaman also has nearly 100 rental locations in Canada and the U.S., as well as 37 fitness equipment stores throughout the country. Flaman Fitness is now Canada’s largest specialty fitness equipment retailer.

The dealership group carries 26 different product categories from 27 different suppliers, with grain handling, storage and drying equipment as their primary product areas. “We’re constantly looking for new things, and every year or two we’ll take on a new line or the odd thing will drop off,” Flaman says.

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While the company has grown and changed over the years, one thing has always remained the same. It has never carried a major line tractor or combine.

“We’ve been very busy doing what we’re doing. There’s really never been any discussion about adding a major line. The company is steadily evolving and we continue to grow,” says Flaman. He says their biggest growth has been over the last 10 years. In that time, revenue from the ag division has tripled.

Similar Yet Different

Flaman says there’s little difference in how the dealership is run compared to a more conventional mainline dealership. “We deal with pretty much the same customers, we’re just selling a different product. In many cases, it’s a very similar product to the same customers,” he says.

The dealership’s customers are primarily grain farmers but it also works with some customers who deal with cattle as well. “The size of the farms really vary up here, but they keep getting bigger. We have equipment for everybody,” Flaman says.

While customers might be able to get similar products elsewhere, Flaman says many come to them because of their focus on specialty equipment. “Shortline products are our livelihood so we have to be focused and true experts for our customers. To a mainline dealer, his big equipment — tractors and combines — may be more important to him than some of these shortlines. This is our livelihood so we have more accessories and better trained service and sales people because they specialize in a very wide range of equipment,” he says.

“The one similarity is we’ve all got salespeople and we have a very high percentage of repeat customers, similar to a mainline dealership,” Flaman says. “The difference is their parts and service departments would be larger and both of those would be a much larger profit center for a mainline dealership than they are for us because of the nature of the products that they sell.”

Flaman adds that mainline dealerships also deal with far more trades and used equipment. “Our products are smaller products, and for the most part they’re cash sales as opposed to trades,” he says. While Flaman Ag does offer financing options it’s not to the same level as a mainline dealer because of the smaller products it sells.

The lack of a row-crop tractor and combine line helps keep the dealership focused on its specialty equipment during the spring and fall when other dealers who carry a mainline need to focus on seeding and planting or harvest equipment, says Hal Carnago, sales manager with Schulte, which supplies Flaman Agriculture with mowing equipment.

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Because the dealership represents so many lines, a big difference between Flaman and mainline dealerships is the amount of parts inventory they carry.

Photo Courtesy of Flaman Agriculture

Like most dealerships with multiple locations, Flaman moves equipment and parts among its 9 stores. Flaman says there is often just more demand in areas the dealership serves for certain products than in others. Depending on the season, the dealership makes transfers among the stores at least weekly. In the busy season, the trips can increase to several times a week, he says.

Frank Flaman’s business philosophy that led him to buying 10 grain bins instead of 4 all those years ago still influences how the company does business. “When we started with Flaman, we gave them the best discount we possibly could and Frank put down a large sum of money in front of me and he said, ‘When that’s gone, let me know and we’ll come back and order some more stuff.’ That was Frank’s philosophy, to buy right and sell right and basically go at the manufacturer and get the best discount he could by putting in the best order he could,” says Carnago.

Having numerous locations has aided Flaman’s ability to buy right. “Our buying power is far greater at times because we are spread out across western Canada,” Flaman says.

Being a multi-store dealership has also helped the shortline-only model work for Flaman because marketing and other overhead expenses are shared across all the locations.

Diverse Offerings

Twister
Meridian
Westeel
J&M
Bruns
Wheatheart
Batco
Up North Plastics
Grain Guard
All Size Perforating
OPI Integris
Saftfil
Foss
Whishek
Kello-Bilt
Farm King
Rite Way
Kodiak
Schulte
Kioti
Wil-Rich
Trailtech
Haukaas
QMP
PolyWest
Luck Now
Meyers

With so many different product categories and brands, it may seem like the dealership is willing to take on any product. That’s not the case, however. Flaman says there needs to be customer demand for the product. In addition, the manufacturer needs to provide a good, quality product with good people to work with. “We handle better quality products and don’t tend to have the cheapest products on the market,” he says.

“We’re looking for good people who do what they say they’ll do,” he says. “What we look for is people we can build a good relationship with.”

The dealership isn’t shy about carrying competing lines, either. Flaman says they carry several competing brands. “Every product is different. We’ll have two or three different competing products on our lot because customers have different preferences and in some cases we need more than one supplier because some of them can’t supply us with enough volume,” he says.

Generally, all Flaman locations carry all the lines. However, there are a few exceptions. In some cases, certain locations just don’t have the demand for a particular product that the other locations have. “In other cases, there may have been a dealer carrying that brand in town already. For example our, Swan River store doesn’t carry any Schulte products. Before we opened that store there was already an established Schulte dealer in town,” Flaman says.

Today, Flaman has grown into a well organized and successful organization, but it wasn’t easy getting there. “We’ve grown up with it and it’s taken a long time to build the business. We do carry a lot of inventory, and I don’t know if someone would want to jump into a business like this with the cost required to get involved,” Flaman says. “We’ve been doing it a long time and have made it work.

“At this point, this would be a hard business to start because most of the mainline dealers also carry many of the shortlines that we do.”

Rental Leads to Sales

Flaman says equipment rentals have been a large part of the business. Rental customers often return to purchase equipment. “There are a lot of people who only need a piece of equipment for one day a year. Tillage equipment and trailers and some livestock equipment are big rental items, but also big discs and rotary mowers and even some field equipment,” he says.

The oil boom in Western Canada has helped grow Flaman’s business. “The lease roads that go out to the oil barracks have to be maintained. So the snow removal equipment is one item that is needed. Then there’s rock removal equipment for starting and building the roads and rotary cutters for cutting the grass out to the lease wells, which is also very good business,” Carnago says. “Flaman’s rent a lot of its equipment in that aspect — and sell a lot in that aspect as well. The rental division has done quite well for them.”

Exclusively online extra

Alternative Distribution: How Many Options Really Exist?

 
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