Last month I wrote about the difference between a used equipment manager and remarketing manager. I am not sure I can do justice to both with just one article, so I will spend some time looking at what the used equipment manager does and what kind of person is needed. The basics of the used equipment manager’s role are the same as the remarketing manager. Both are responsible for evaluating equipment by current market conditions, understanding auction market trend lines and managing the reconditioning process. On the surface, they look the same, but they have a completely different mission.
In a perfect world, a dealership would have both a remarketing manager and a used equipment manager. The used equipment manager is geared more toward data management and analyzing used equipment trend lines so the dealership can be proactive and not just reactive. But, unfortunately, shifts in the market are something that happens, and being caught on your heels hurts.
Rewind to 2014. The old saying hindsight is 20/20 is fitting, but the writing was on the wall in bright neon letters about what would happen. Every conversation I had during 2012-2014 revolved around how we would make a soft landing. The combine auction values had been on the slide since 2012, and North American inventories were climbing at a rapid pace. Even used row-crop and articulated 4WD tractors were stumbling. Customers experienced record on-farm income and highly sought new equipment, not just because producers had a bunch of extra money. Section 179 was only available for the purchase of new equipment, and interest rates were at all-time lows. This flooded the market with the late-model, low-hour equipment creating a problem that lasted for 6 years.
The used equipment manager would have been the person that saw this downturn coming and would have been sounding the alarm. They would have seen the data and understood the trend lines long before a remarketing manager. I want to be clear when I say this. The remarketing manager isn’t obtuse to what is happening; instead, they are wired to see what is happening right now. The used equipment manager understands how to find data, extract that data and build a plan based on the data.
During the 2014 market downturn, used equipment managers were looking at inventory location as much as price. Because of the data they extracted from the business system, conversations with location management and boots on the ground sales reps, the used equipment manager would know what location will sell more higher hour combines. Therefore, the cost of moving equipment ahead of peak selling cycles is easily offset by increased inventory turn.
Inventory turn is the “Holy Grail” of the used equipment matrix. The primary focus of the used equipment manager is to make this number as high as possible. The more focused they are on inventory turn, the more entrenched they will become in the data and the more they will see the trend lines develop. Focusing on inventory turn also makes inventory plan adjustments easier. Minor proactive tweaks to the dealership’s inventory plan are less painful when eaten in bite-sized chunks. Trying to eat an elephant in one bite not only hurts, but where do you even start? The used equipment manager plays the long game, listens to data and leaves the emotions out.
The used equipment manager isn’t going to be the most significant at selling equipment. Not because they are incapable of selling equipment, but because they are spending more time focused on data and where the market is heading. In doing so, the used equipment manager is setting up the dealership staff to sell the right mix of equipment successfully. This focus also set a clearly defined intent of the wholesale sales rep/manager in motion. As a result, the wholesale department knows what equipment isn’t right for the market or abundance. In addition, this intent allows for more minor and frequent adjustment to the dealership inventory plan, avoiding significant reactive decisions made in haste rather than decisions made with data.
Lastly, the used equipment manager and the remarketing manager are different people with different skill sets. Rarely is a mathematician and a novelist the same person. They have very distinct traits allowing for one’s weakness to be the other strength. The questions each dealership needs to ask is, “What do we have, and how are we supporting their strengths and weakness?”