How things have changed. This column originally appeared 10 years ago — in the June 2008 issue of Farm Equipment — when, the industry was dealing with equipment shortages.
Selling all you can is a mission. Meeting customer demands is the goal. Somewhere in between is a strategy for accomplishing both.
With the shortages of new and used farm equipment during the past year or so, most farm equipment dealers accomplished their mission, but fell short of their goal.
Manufacturers say that pre-selling and early ordering is the strategy.
As one equipment builder said: “Preordering reduces costs and complexity within the system. As a manufacturer, we can better plan our production at the plant and reduce inventory costs, as well as manage risk because we know what the coming year’s business will look like.”
He goes on to say that retailers and customers will also reap benefits. “Dealers reduce their risk and inventory,” he says. “Customers have the opportunity to preplan their business, save money and precisely spec out the machine to match their operation’s needs.”
From the manufacturer’s perspective, this makes perfect sense. Many dealers agree, too. Eliminate the guesswork. Use resources efficiently. Make some money. The concept is hard to argue with.
But then again, when it comes to planning, one could also say manufacturers should practice what they preach. Granted there have been some extenuating circumstances this year, but it’s fair to question why they hadn’t anticipated their needs the way they now expect you to do.
You see, it’s all a circular argument where one question can only be answered with another question, and no answer makes sense — or matters — to everyone.
When the dust settles, what we can be pretty sure of is manufacturers, dealers and customers will need to do business differently — together. The dilemma at the moment is that most people hate change. But, I think, some will embrace it if they believe it will make things better.
Ask yourself how waiting 12 or 18 months for equipment that a farmer needs today benefits him. As long as there’s choice, there’s an issue. And as just one example, the products that fill up this issue demonstrate that there’s always another choice.
Regardless of circumstances that led to the equipment shortages, most retailers are beginning to accept pre-selling and early ordering as the “new reality” of selling farm machinery; one that emphasizes carrying smaller inventories and better planning all the way around. Whether or not dealers adapt is not the question. Whether farmers adjust — and when — will be the real test.
Totally eliminating “impulse” buying is a pipe dream, but pre-selling and early ordering will become a much larger part of how business is done in ag equipment.
And, if dealers are expected to hold up their end during this transition phase, then so too must manufacturers. Missing or continually pushing out equipment delivery dates will continue to thwart the process. Manufacturers and their brands will suffer when promises made aren’t promises kept.
As good dealers already know, conversations about 3-5 year plans only deepen the relationship and allow the thoughtful dealer to bring more to the table. Farmers need help, and you can gain insight into their entire operation. In this way, the shortages are actually a “gift.”
On the other hand, I’d caution dealers who arrogantly play the “shortage card” as a means to force an early order. Take-it-or-leave-it attitudes or attempts to force customers to do what they don’t want to do and/or won’t make their jobs and lives better just won’t get the job done.
It’ll be like trying to teach a pig to sing. It won’t work and it’ll only annoy the hell out of the pig.