"Every dealer today needs to pay closer attention than ever to remarketing used equipment."
— Jim Walker, vice president North America ag business
Planning for the Next 5 Years. Good times are always the best times to make the hard decisions to put your business on a solid foundation for when the next downturn comes again, as we know it will. This is the time to get strong from a SG&A expense standpoint.
The most important key for dealers in the next few years is how they handle their used equipment. Selling a lot of equipment out the front door and storing it out back is not the answer in the long term. Every dealer today must pay closer attention than ever to remarketing used equipment.
Dealers also need to push hard at improving absorption rates in order to sustain the business as much as possible when wholegood sales slow down. This is really why manufacturers talk about market share. Market share equates to the machine population in dealer's area. Machine population equates to parts and service support, which covers absorption.
Know Your Competition. Our businesses aren't isolated. Dealers need to take into consideration what competitive dealerships are doing. You can't be a Case IH dealer without knowing what the John Deere or AGCO dealer is doing. You need to position yourself in terms of where you want to be and what your capabilities are as far as people and growing the business. You can't do that effectively without a thorough knowledge of your competition.
Attracting Talent. Another issue dealers and manufacturers need to tackle — and the sooner the better — is attracting and retaining talent in the industry. The pool of talent is out there, but our industry must change its perspective and make the farm equipment business more attractive. It needs to promote itself differently than simply presenting ourselves as being in the farm equipment business.
Improving Profitability. There are a lot of components to drive profitability and improve margins. One of the best opportunities for both the dealer and manufacturer is pre-selling. It's an effective way to reduce overhead costs that don't add value and also increases margins. As a manufacturer, we're trying to be smarter about what we produce, when we produce it and how quick we turn it. Of course, pre-selling helps the dealer control turns as well. Dealers need to apply the same principle to used equipment. Pre-selling has all of the ingredients for increasing margins.
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