AgriVision became a John Deere forage harvester dealer in January 2018 after buying 5 stores in Northern Iowa. The dealership went from no forage harvester contract to being a top 3 dealer within 12 months. “That might’ve been the highest stakes bet that we have placed in a long time,” says CEO Jeremy Ostrander.
“We came in with an aggressive plan to grow the forage harvester market share,” he says, a challenge that must have been a big one for being asked to write checks to a new ownership group.
Ostrander explains the level of risk for this customer base. “When you have 6-8 trucks or tractors and wagons chasing one chopper, and the chopper goes down, you have a lot of expenses and assets sitting there not doing anything.”
AgriVision soon learned that the differentiator in forage harvester sales wasn’t necessarily about the equipment or the parts and service. “For strategic accounts, it is about providing a business solution that includes helping them attract part-time employees and training them. They might have 30 to 50 employees on staff during a 60-day chopping season.”
“When you’re chopping for dairies, quality is everything. So, we’ve gotten into nutrient sampling and testing. For us, it was not just about getting into the chopper business. It was about becoming a total solution for that business.”
That “real value” is found in helping owners understand their level of productivity and make business improvements through data. “If one chopper is more productive than the other, it could be the chopper, but it also could be that we need to do more education and training with other operators.”
Showing them the value of logistics software is another route, he explains. “In Southeast South Dakota, there’s a lot of mile-long rows. “If a truck or tractor driver pulls into the wrong end of the field with a truck or tractor, you can lose a lot of time. Software is just one example. Everyone wants to buy a less-expensive chopper, of course, but if we help them figure out how to get more out of that chopper in a day’s time and make more money, then it makes it easier for us to reach an agreement on costs per hour.”
How They Grew Market Share
Ostrander said their start was all about trading for multiple competitive machines in the first 12 months. “Yes, it’s a high risk to manage all that inventory regularly, but if you continue to look at the risk from the perspective of your balance sheet, it allows you to step out and take some of those risks,” says Mead. “Doing the little things right allows us to step out and take that risk.”
Ostrander adds, “To take that risk and make that business model work, we had to develop some relationships on the West Coast. And we had to take a different approach to trading competitive machines and having a place to go with them vs. just taking the risk. It’s been a steep learning curve for us, but it’s been an exciting one because now we see the success that we’re having. Now, it’s more about how we can sustain it?”
AgriVision paid close attention to the markets where competitive forage harvesters were strong, and was able to work out trades with dealers of those brands they’d taken in on trades. In some cases, they were willing to add service and repair packages to move the off-branded machines.
Ostrander shared a low-tech tactic that helped find owners of the competitive equipment they’d take in on trades -- social media. “The chopper world is pretty small, but these guys are proud of what they do, and post pictures and videos of what’s working. So we can go onto social media and find out who the owners are of certain brands of choppers when he have one of those units that would be appealing to them.”