Deere Drops Schmitt Implement in Iowa

Deere has taken a turn off the road that made them great. It started 10-12 years ago when they bought out all the old boys that knew how Deere got where they are. The "educated" group took over and decided we'll be everything to everyone. Used to be John Deere green meant premium equipment, now premium is a tractor option. It will take some time, but these lower quality units will bite them. Look at the resale value of lawn and garden tractors with the $1400 JD mowers at Home Depot. Bigger is not always better, but it is easier for Deere to deal with a few dealer principals than many. It is not about the customer or the dealer making a living, it's about Deere making profit. They could care less if the dealer made any money. I don't understand why they want to have less dealers when it's not costing Deere anything. Anything the dealer needs or wants, from signs to tools to meetings is paid for by the dealer. And be careful John, your owner wouldn't think twice about throwing you under the bus.

Say what you will about how big a mistake John Deere is making but I'll tell you this.... if smaller dealers were creating more Deere customers, that would be the direction they would be headed. I completely understand the reluctance we all feel in moving away from the "one-man" owner operator style of business. It's part of our heritage as American's. But that's not the world we live in today. Why is Wal-Mart so successful or why are neighborhood grocery stores or local butchers a thing of the past? Becasue it's not the most cost effective or efficient way to move products to the market place. I also disagree 100% with those of you who say the customer is the forgotten part of the equation. As the manager of one of those multi-store operations, my customer are important to me and to everyone of my staff members. I don't own the store but you can't tell me my cusotmers get treated like second class citizens becasue I'm not an owner. Just like many of the people who've responded to Deere's actions, I bristle at the thought of a corporation pulling the plug on a business that's been around for 40 years. But the facts of life are these; if you don't change, you get left behind.

We want to correct the people that commented, "Schmitt Implement's market share was 15-20%, our store wasn't doing something right."

For 8 years in a row, our market share averaged 41.9%. During the next 5 years, when John Deere wanted to get rid of us, our market share kept dropping because the big box stores were moving in. But it was a surprise to us in 2007 when we won 3 trips to Ireland, yet we were so low on the totem pole with market share. We will put our customer satisfaction up to against anybody's.

Someday, I will let you all know how John Deere determines market share when you don't know how they did the same to you.

The Schmitt Family

all the major ag companies are pushing for large multi store dealers. maybe they need to reconsider. Agco,s plan is for multi store dealers also. It is not working well for Agco. In Utah the Challenger dealer with 12 stores cancelled their agco contract. This was Agco largest Challenger hay tool selling dealer in north America. This move has left Agco with 2 dealers in the entire state. Kinda tough to support the customers without any dealers. this could happen with any brand.

The world is a changing place and the dominance of the large American manufacturers is assured for some time in the large tractor business but not forever. There are more tractor brands being sold in Australia now than there ever has and the true market share is not known. I would not be surprised if Deere CNH and Agco added together could not reach 50% market share. Deere are a very smart company and they know these facts. The one thing they seem to devalue is the connection between their success and the part played by their dealers in that success. I am watching closely the events in North America because you guys get hammered first, we are close behind.

I Was told a while ago that Deeres market share are about 50% in the States What is the numbers nowadays.

How big is the market share for Deere in the States? Pistol Pete said it was about 50%.

Deere isn't the only manufacturer that puts a lot of emphasis on market share. I know that the market share figures can be skewed by registering the sale in the primary area of responsibility even if the unit was sold out of the area. Rental fleets are good example of how that is done with the unit considered sold by the manufacturer when the unit is placed in the rental fleet and considered used when sold to the retail customer with even subsidized manufacturer financing available. The dealer can't access the market share figures to check for accuracy and can only take the manufacturer's word that it is accurate. It is Very Unfair with so much at stake for the Dealer. If the manufacturer is so concerned about market share why don't they assist the dealer to improve instead of using it as a lever?
The manufacturers use the excuse for the push to consolidate that it reduces their costs. My question is what costs? When the Dealer bares the brunt of the costs every month, the only additional cost to the manufacturer is the sales rep showing up once in a while to check inventory, maybe the freight of the parts stock orders and of course their fancy Dealer meetings which the Dealer also shares the cost of.
If a Dealer treated their customer the way manufacturers treat Dealers how many customers would they have left after telling a customer that they don%u2019t do enough business with them even when they have money hanging out of their pockets? My point being the Dealer is the customer of the manufacturer not necessarily a business partner as the manufacturer many times states, as the manufacturer has nothing invested in the dealership to make it a partnership. When the time comes to part ways, the Dealer and his customers are hurt with the decision, the manufacturer just finds another sucker.

Deere can manipulate the cost to a dealer by how they (Deere) control a dealers Area of Responsibility (AOR). Through targeted marketing discounts, and discretionary funds as well as other unwritten discounts Deere can push the sale (Market Share) to any Dealer they want as well as away from a dealer that they want to penalize. If you aren't in alignment with the company then you will not get full advantage of all the discounts so again there goes the market share. I have seen up to $3,000.00 difference in dealers cost on the identical tractor. I wanted to buy from my favorite dealer, but because he also sold Kubota and I lived in an adjoining county which he didn't have AOR, he didn't get all the discounts that the other dealer received. I am so upset that I am looking at other brands now. It is like Deere thinks the only reason a customer works with a particular dealership is because they sell Deere, nothing to do with the personality or relationship. Doesn't Deere think that customers are smart enough to know what they are doing.

I'v been involved in retail farm equipment for over 40 years. The one constant is new technology which requires us to change to apply it. Those of us that adapt survive & those that don't won't. That's not any different than our customers. The customers we have now expect us to have trained technician's, each with their own laptop. They expect us to address their RTK system on a Saturday afternoon when it does not work. I believe our customer expectations of us are as demanding as Deere's. We grow or exit the business. I'm not saying I like it this way, but over time I've learned I must adapt to change because change will occur whether I like it or not

this dealer dropping by the so called big boys of ag is not just happening in the USA but Europe as well. i work for an ag dealer in England, we were AGCO dealers for many years but were dropped because of lower market share against john deere. Still devastated we picked ourselves up and now sell deutz & kubota tractors and are we now are on only second to john deere in the market share and agco are now in a lowly fourth place! how the mighty fall against a well backed dealer. Schmitt chin up j.d. not the be all.

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Interesting

Ive been a proud John Deere dealer (two stores) for about seven of the last ten years in business. These dealer closures and consolidations to much larger dealer groups are proving to be a HUGE MISTAKE and most Deere employees know this except the ones that are little college educated John Deere Robots with no common sense, farm equipment background or people skills, but will not comment but in private. Must be one of the reasons Deere was offering a exit package for about 200 white collar employees and nearly a thousand signed up , thats a good sign of what the folks that work for this company think about the way its being run. All its gonna take is one or two of these 8,10,or 15 store operations that dont have the time to know or even meet the customers they hope to serve to go bust and the company will figure out something we all know (The Bigger They Are The Harder They Fall).This company was built with rural mom and pop operators that do and did whatever it took to succeed and always bled green. It looks like those days are over just like every other good and decent thing in or about this great country. Just remember who ultimatly loses in all these nothing but job and cost cutting measures is the dealers that built this company and most important the CUSTOMER, somebody this company forgot about quite along time ago. Sounds like potential anti-trust issues will be on the horizon for this once great brand..

dropped after 40 years

If I read right, their market share is only 15% average? If correct, then I have little sympathy — manufacturers deserve better than that. If incorrect, and their market share is 35% plus, then I agree: Deere is a bully.

I have been in the implement business since 1968 involved in ownership of dealerships, selling wholesale and managing dealerships. In 1968 there was no doubt the John Deere Sales Agreement was the most desirable in the industry. With the current management direction of John Deere I find more value in a roll of toilet paper that a Deere Sales Agreement!

Deere is wearing its shorts too green. It is really upsetting all dealers with its new mentalilty of corporate greed. They concentrate too much on the bean counters and not enough on the dealer relationship. One day all John Deere will be corporate owned stores the way they are going.

We're seeing this in Texas too. I have a friend here who's family had been a JD lawn and garden dealer since 1968. Deere started raising their quota a couple a years back.They made the quota for a while,but eventally couldn't when they kept raising the bar.December 09 they pulled their dealership as well as an ag store not far from us to push for big dealerships, but they are forgetting about customer service that you see with hometown service.I think Deere is going to set themselves up for a hard fall with no one to catch them.

Deere recently left the dealership in Tulsa, Ok with no choice but to sell assets only to the largest dealer in OK. Once Deere had it in their mind to push Green Country out there was no stopping them. They have hurt a lot of loyal, good dealers. They don't realize how many lives they hurt with their big-business mentality. The service, customer loyalty, and dependability of the Tulsa store has been cut in half since the large corporation took over.

Having worked in the industry 45 years, both John Deere and Case, as a parts person and as a sales person, it's long been hinted to work toward only large dealerships, and as few as possible. The days of the gold watches are gone!

We too were recently canceled by John Deere or as they would report a voluntary termination. We had been a loyal paying dealer for 21 years and all we ever got from John Deere people was that we never met up to market share or their expectations. Hey, guess what — we never met up to my hopes and expectations either, but we will be in business long after a lot of these multi-owner stores go broke. Deere will come crawling back to the type dealers that made them what they are today and I will be happy to decline. They have become such a bunch of pompous jerks.

Change is always going on around us. We need to constantly look for ways to cooperate with our vendors. The average new ag tractor in our area costs $190K. Special tools, stocking parts levels, etc. I don't see a way to survive unless we can group up with our neighbors.

I think Deere is shooting themselves in the foot. How do they think they got where they are today? Well, I'm here to tell you it was by the small dealers taking care of business. Once the dealer gets too large the customer suffers. Go with TYM — I did.