To read the introduction to this "Greatest Mistake" series click here.
“My biggest failure occurred in the lead-up to the used equipment market crash in November 2013. Our used inventory turns slowed going into the fall of 2012, which raised questions as we forecasted for 2013. Despite what the data showed, I dismissed it as a timing issue; not a big problem.
“Many of our trade-ins were coming in later in the season than normal due to factory availability of the new equipment sold. My gut told me that’s why our inventory was turning slower; we just didn’t have time to sell it before the season of use. That same gut served me well leading up to the market peak as many decisions were made that helped our business grow substantially.
“But this time, my gut failed me like never before. We’re in a business that is rarely black and white. Most of our decisions involve intuition.
“We always weigh a multitude of factors, including many that are intangible as we aim to serve all stakeholders. But in many cases, our ‘gut feel’ is the trump card. The risk is when overconfidence in your ability to make those types of decisions causes you to discount or dismiss hard data. That’s what I did leading up to what has been the biggest used ag inventory crisis our company has ever faced. If I’d done more analysis when the turns slowed, I would’ve discovered what we eventually did almost a year too late. Our used sales outside of our AOR had dropped substantially.
“As a dealer that has always done many multi-unit discount (MUD) deals, our inventory of low-hour late model trades had been good wholesale and retail property in areas of the country where those items weren’t readily available. Record commodity prices had made it possible for those dealers to do their own MUDs instead of purchasing our units. As those dealers began to do their own rolls, their lots began to fill with late-model trades at the same time as ours. It was a perfect storm.
“I don’t know how much of the crash we could’ve avoided, as it came faster and harder than anyone predicted. But I know that, at the very least, we could’ve slowed our new sales earlier. Since the crash, we’ve developed a robust inventory analysis and valuation process to assist in making the decisions we need to make daily. We are an entrepreneurial company that’s aggressive in our market, and we’ll continue to make the best decisions we can as we serve our stakeholders. Just as before, many of those decisions will require us to use our gut. But that gut instinct will be data-dependent. When the two conflict, however, more analysis will be done before we make any final decisions.”
Keith Kreps, Executive Vice President, RDO Equipment, Fargo, N.D. (2010 Dealership of the Year)
“My biggest failure occurred in the lead-up to the used equipment market crash in November 2013.
Leo Johnson, President, Johnson Tractor Inc. (2012 Dealership of the Year)
“The fact that I’ve been in the same farm equipment dealership for 38 years may not equate to success as much as stamina.
Brian Carpenter, General Manager, Champlain Valley Equipment, Middlebury, Vt. (2009 Dealership of the Year)
“When asked to share a mistake I’ve made with other dealers, I was challenged to find a lesson learned that was instructive.
Tom Rosztoczy, CEO, Stotz Equipment Co., Avondale, Ariz. (2013 Dealership of the Year)
“In 2001, we purchased 6 locations from 4 owner groups in Utah and Idaho over the course of 4 months (Mistake #1).
Kent Buchholz, Finance Manager & Sales, Kennedy Implement, Philip, S.D. (2012 Dealership of the Year)
“Own everything you do or don’t do. Good or bad times don’t matter; every decision made, or not made, must be owned up to.
Steve Cubbage, President, Record Harvest, Nevada, Mo. (2007 Dealership of the Year)
“If there’s one mistake those of us in the precision ag business make, it’s falling into the trap of thinking there’ll always be something new and better to sell tomorrow — the ‘next big thing.’
Don Van Houweling, Owner, Van Wall Equipment, Perry, Iowa (2016 Dealership of the Year)
“As I look back at my most significant mistakes, I’d say that I’ve entered into sales agreements with companies that didn’t possess the capabilities financially or from a management standpoint to support our goal of being the ‘Clear First Choice.’
Ron Ritchie, CEO, Ritchie Implement Inc., Cobb, Wis. (2015 Dealership of the Year)
“Our team is always looking to the future. We use our mistakes as an opportunity to learn and move on.
Tom Janson, Janson Equipment, Reese, Mich., (2011 Dealership of the Year)
“I don’t dwell on mistakes but instead look forward on how best to improve my business.