To The Point: Too Much of a Good Thing?

Dave Kanicki, Executive Editor

By Dave Kanicki, Executive Editor

They say that bad decisions make for good stories. Of course, it’s usually someone who’s on the outside looking in who’s telling someone else’s story.

It kind of felt that way with the lead story in the April/May issue of Farm Equipment, “Dike Iowa… Five Years Later.” That story, which involved an out-of-control combine rollover program, could have been told from any number of angles. The juiciest of which would have been to explore the human failings that led to the collapse of Walterman Implement. Telling that side of the story is best left to someone who’s much wiser and more compassionate than any of us.

Purposefully, the story angle we chose to explore was how several bad business decisions were eventually rectified. Though few involved in that saga were ever made totally whole, many good decisions were made that prevented a bad story from getting a lot worse.

That story along with ongoing conversations with some farm equipment dealers served as the impetus for the special report starting on page 94 in this issue, “Will Equipment Rollovers Keep Rolling?”

If you’ll remember, for 15 years or more, Walterman Implement in Dike, Iowa, had made a living off combine rolls. The fact is that for many years, the program worked extremely well for both the dealership and its combine customers. A farmer who was a long-term beneficiary of the program said after it all fell apart, “It worked until it didn’t work anymore.”

Most of those familiar with the situation agree that several very poor business decisions were made with the combine-roll program that ultimately led to the dealership’s demise in late 2005 and to a prison sentence for the dealership’s owner.

As you read over the report on equipment rolls in this issue, it’s clear that dealer views vary widely as to the usefulness of this selling approach. Yet, even the harshest critics of machinery rolls admit it’s probably going to continue because major suppliers demand it and a lot of dealers have built it into their growth plans.

A web poll conducted recently by Farm Equipment indicates that rolls have become an integral part of dealers’ approach to growing their businesses. Nearly 80% of dealers report some portion of this year’s wholegood revenues will come from equipment rolls.

While some dealers don’t object at all to using the technique and are doing so with enthusiasm, a solid majority of the dealers say manufacturers are pressuring them to use rolls to capture market share. They often sacrifice healthy margins to do so.

But one dealer, who really doesn’t like these programs, says that while manufacturers need to take some of the blame for what’s happened with these programs, much of it must fall back on the dealers. “The pressure to sell new is only on the first deal,” he says. “The second and third deals are strictly the dealer’s own doing because they’re afraid to let a customer walk.

“Manufacturers are always going to say, ‘If you don’t keep the pipeline full, you’ll have no one to sell parts and service to,’ and this is true,” says the dealer. “But dealers must take some blame as they’re the ones who offer to do these crazy deals on an annual basis.”

The message here is sometimes you need to tell the customer “No.” Sometimes you need to tell suppliers “No.” Sometimes you need to remind yourself of Walterman Implement and remember there can be too much of a good thing.

Click on the links below to read the other articles from the June 2011 issue:

Special Management Report:
Will Equipment Rollovers Keep Rolling?
Machinery rolls teamed with multi-unit discounts are a boon to farmers and manufacturers, but what's in it for dealers?