Either through foresight or old-fashion good luck, a few dealers found themselves in fairly decent shape for new equipment going into the 2008-selling season. But even those fortunate few that had stock available found it still wasn't enough.
Most, however, are finding the shortage of new equipment a tough pill to swallow, especially with growers ready to spend and the demand for new machines and technology the highest it's been in decades. Many say it cost them "a lot" in terms of lost sales, maybe even customers.
Good Planning or Luck?
Ken Snow, vice president of Snow Tractor, Ayden, N.C., admits that overestimating what he needed in 2007 paid dividends in the early going of 2008. "We had adequate inventory due to over ordering last year, so we were able to fill most of our customers' needs. In fact, we were able to fill some competing dealers' customers' needs too," he says.
"Fortunately we were not as bad off as some because at least we had the right orders in the system," says Foster of Birkey's Farm Stores. "While this will not get the equipment in the customers' hands as quickly as they want, it will allow them to at least get it at some point."
Jones of Atlantic Tractor adds that in 2008 good planning still wasn't enough. "We bought more equipment for stock than we've ever done before. It was enough in some lines but not in others."
And despite having planned ahead and "ordering heavy and stocking the shelves as much as possible," Collins of GVM West, adds, "we still had to 'ask forgiveness' more than any of us would have liked to."
Suchomski of Suchomski Equipment also points to the downside of maintaining inventory of expensive machinery. "We had several sprayer units in inventory that were paid for. We finally moved them this year. That was a relief. When you step up to the plate and order but don't sell these things, they're your babies."
Four of Five Dealers Lost Sales
A count of the dealers responding to Farm Equipment's survey on equipment availability showed that for every dealer that reported they didn't lose sales due to the lack of new machinery, four others did.
While most could quantify — by units, dollars or percentage — how much was lost due to the inability to procure new equipment, some simply responded, "A lot."
Kacy Coulter of Ag Power in Mineola, Texas, can pinpoint exactly where he fell short this year: two 6000 series tractors, two square balers and one 7000 series tractor.
In terms of the dollar value of opportunities lost, others estimated anywhere from a few hundred thousand dollars to millions.
"If we could have gotten it, we would have made another couple hundred thousand," says Paul Bader, president, Bader & Sons, St. Louis, Mich. The inability to get no-till drills, field cultivators and tractors were his biggest problems.
"I lost a $750,000 in retail sales this spring because I couldn't get equipment in time — even factory ordering — to be used this season," reports Garry Robinson, Friesen Equipment, Duncan, British Columbia.
James Sommer of Service Motor in Dale, Wis., kept it short. "We will lose out on $1 to $2 million in sales because of lack of availability."
The highest estimate for lost revenue came from Wallin of Colorado Equipment. He says, "We probably lost $2.3 to $3 million in sales. Another problem we're having is getting deals completed because of slow shipment of GPS components that the tractors need to finish the deal."
Not a Total Loss
While it might have been nice to ring up a few extra sales, some dealers say they handled just about all they could. The hot market for equipment had pushed their staffs and resources just about as far as they could go.
"We really sold about as much as we probably have the support team to take care of," says C. Van Houweling, president of Van Wall Equipment, Perry, Iowa. "So in the end, it was a healthy increase."
Tim Young of Young's Equipment doesn't look it as lost revenue, either, explaining, "We booked all the sales we could handle. This is a complex business where you should not sell more than you can get ready. We sold all the units that our service department could handle with many used units being sold as-is."
Rick Hirai of Liberty Farm & Lawn, Quincy, Wash., adds that he couldn't really attribute lost sales directly to equipment availability. "I don't believe it is as bad as you might think," he says.
"We usually lose some deals regardless of the year due to last-minute decisions by customers, and our salesmen have been working at capacity. So I would almost say that lack of manpower would have been as much to blame as equipment availability."
New Manufacturing Model Requires New Retail Approach
Equipment Shortages 'Worst in 30 Years' With Little Let Up in Sight
Dealers Count Lost Sales in Wake of Equipment Scarcity
What Good are EOPs that Don't Deliver?
For Customers and Dealers, 'Early Order' Can be a Tough Transition
Post a comment
Report Abusive Comment