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The Ultimate Wake-Up CallDave Kanicki, Farm Equipment

It’s been said that the only difference between a rut and a grave is their dimensions.

The analogy comes to mind because of how often the term “rut” was used by the shortline-only dealers I interviewed for the special report in this issue (see p. 81, “Life Beyond the Majors: Succeeding with Shortlines”).

They used it in reference to their time as dealers for the major equipment manufacturers.

They got into the rut of thinking that trading profit margin for volume discounts was the normal way of doing business.

They got into the rut of not looking around and comparing their major’s equipment offerings to other — often times superior — products on the market. They got into a rut of wasting time trying to please their major supplier; time that should have been devoted to pleasing to their customers.

Those ruts could have become graves. Ironically, for many shortline-only dealers, the turning point came when their major suppliers — for all the usual and ambiguous reasons — terminated the dealers’ contracts or otherwise forced them to walk away.

The real message of this report is that being cancelled by a major doesn’t have to be the death knell of your business.

Our best estimate is that there are about 970 independent dealers — those not carrying one of the four best known brands of farm equipment — operating in the U.S. alone. They are 970 success stories.

While 3 of the 5 dealers we interviewed one-on-one for this feature are fairly new to the business of shortline-only, the other 2 — H.G. Violet Equipment and Tweed Farm Equipment — are veterans at taking on the big guys. Violet has been an “independent” dealer since 1996, and Tweed has been at it since 1999 when it gave New Holland notice.

There are no real secrets why they’re succeeding. It’s because they carry top-of-the line products that they know their customers want, and they offer the services their customers expect.

Not only are they making it as successful businessmen, but they’re also probably irritating the hell out of the big boys, which by itself may make it all worthwhile.

There are many lessons to be learned from these dealers and hundreds of others like them. Here are just a few.

First of all, if it really is your business, then brand it as “your” business. The products you carry are only a means to an end. If you carry a color of equipment that a lot of customers desire, good for you and good for the manufacturer.

But if you’re expecting the “brand” to carry your business, just watch how your dealer brethren have fared when lulled into thinking their major would solve all their woes. It’s you, the dealer, that makes the difference. Nothing really happens until someone sells something.

Another lesson learned is that market share is only a measurement, and largely an artificial one at that. If it must occupy a place on your priority list, it should be somewhere far below profitability and customer satisfaction. As one dealer recently told us, “Try taking market share to the bank.” And do you really think your customers care about your market share?

Which takes us to another example of what these dealers say they’ve learned: you can’t serve two masters. Is it your customers you’re in business for, or your suppliers? Comedian Bill Cosby may have said it best: “I don’t know the key to success, but the key to failure is trying to please everybody.”

Getting kicked to the curb by your major is never easy, but when has the farm equipment business ever been easy? Going it alone won’t be easy either, but at least you can do it on your own terms.

Posted June 15, 2010


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