After my piece on Dealer Purity earlier this summer, a longtime colleague from the manufacturing side called me. We talked about today’s challenging business environment — slower sales, rising costs and workforce shortages.

What he really wanted to talk about, though, was a growing temptation among equipment manufacturers to sell directly to farmers — bypassing the dealership network that built this industry and gave their brands market presence.

This isn’t a new issue. When dealerships merge or one is bought out, one of the first discussions is which lines stay or go. I remember debating this in 2018 with the Farm Equipment Manufacturers Assn. (FEMA) board. The question on the table was: should shortline OEMs go direct to farmers or continue using dealers, even though their retail distribution channels were being threatened?

Recently, a major OEM launched an initiative to convert one of North America’s largest per-acre customers. The OEM initiated and led discussions on pricing and unit volume directly with the customer — an aggressive play aimed solely at growing market share, and in my opinion, pride on converting a very large customer to their brand. Although the dealers in this customer’s territory were eventually “brought into the deal” — making sure the aftermarket support was there and taking responsibility for all future trades, they felt they had no choice. It was clearly an OEM direct-sales effort.

The fallout across the dealer network and among loyal customers was significant. Some dealers lost their allocation to complete this deal. The pricing of the used equipment coming back from the transaction also created a lot of uncertainty. Longtime, loyal brand customers looked at this and wondered, “A converted customer got a better deal — where’s my reward for brand loyalty?”

Or even worse, larger customers started asking their local dealers to connect them with the OEM reps who led the deal so they could bypass the dealer entirely.

Most major OEMs have a “national sales” division for clientele that meet certain requirements. However, this direct sale to a large producer reignited a broader discussion: What is the future of dealerships? Are more of these transactions going to take place — and if so, what will the dealer’s role be going forward?

It’s easy to see why some OEMs — both mainline and shortline — might consider it. Technology makes direct sales look simple, margins appear larger and large commercial operations seem ready for it. But what looks efficient on a balance sheet can cause deep harm in the marketplace.

Selling equipment directly to farmers disrupts the competitive balance, weakens local service, and erodes farmer trust.

I’m a firm believer that the best retail model in agriculture remains the one that has proven itself time and again: an established, professional farm equipment dealership.

Farmers don’t just buy equipment — they buy uptime. When something breaks during planting or harvest, it’s the dealer who answers the phone, sends a technician and gets the farmer back to work.

No direct model can replace that. The plant can’t dispatch a service truck at 10 p.m. on a weekend or deliver a part across town before the rain hits. Dealers provide local, responsive support that keeps the industry moving.

Farmers want to buy from people they know and trust. These relationships are built over years of advice, service calls, and shared community connections.

When a manufacturer goes direct, it severs that human link and replaces it with a transaction. The result isn’t just a loss of loyalty — it’s a loss of confidence in the brand itself.

When that OEM executed the large multi-unit deal, my phone rang off the hook — from dealers of all colors. Without question, it upset the marketplace. Dealers of that brand — who have invested heavily in facilities, staff and inventory — felt undermined. Dealers of other brands were left wondering whether their own OEM might do the same to compete.

That kind of market interference leaves a bad taste. It creates the perception that loyalty no longer matters and that large customers get special treatment while everyone else plays by a different set of rules.

There are several states and provinces that protect dealers from a significant “change in competitive circumstances.” Unlike motor-vehicle franchise laws that often bar manufacturer-owned dealerships, most state farm-equipment statutes focus on protecting dealer relationships rather than banning direct sales per se. That gap can invite market-disrupting one-off deals unless lawmakers tighten protections or clarify prohibitions.

In the Canadian province of Alberta, however, provincial law actually prohibits a manufacturer from selling directly to a farmer. The intent is to protect both consumers and the dealer network that serves them. Elsewhere, this isn’t the case — and it raises a legitimate question: Should similar protections exist across other jurisdictions?

At the same time, no one wants to limit opportunities for smaller, innovative manufacturers entering the market. These companies often need to sell a few units directly to establish credibility before partnering with dealers.

There’s a balance to be struck — one that allows new entrants to grow while preventing major OEMs from destabilizing established markets through direct, preferential deals.

Dealers Add Value that Direct Models Can’t Replace

Dealers do more than sell — they provide financing options, demonstrate equipment, train staff to be trusted consultants, invest heavily in parts inventory and service what they sell. They go above and beyond to support their communities and, in many cases, are among the largest local employers.

They provide the parts and expertise that keep complex machinery productive for years — and, to the relief of OEMs, they handle the trade-ins.

If manufacturers take that on themselves, they inherit all those costs — or worse, leave farmers to fend for themselves. Either way, the total cost of ownership rises and satisfaction falls.

Dealers who feel protected in their territory also invest more in marketing, inventory and service. When a manufacturer sells directly into that same area, it undermines those investments and damages trust. A well-defined, respected dealer territory ensures everyone — manufacturer, dealer, and farmer — knows where they stand. That clarity is the foundation of long-term partnership.

The Long Game is About Loyalty

In our family dealership, we had generational customers who were loyal because we were local and because they saw that we did our best to service their needs. They stayed with us as we moved from John Deere to Cockshutt to White to Massey Fergusson and then finally to New Holland. Farmers rewarded us for the consistency in how we took care of them during planting and harvest. Loyalty, once lost, is difficult to win back.

Ultimately, the manufacturer, dealer and farmer share the same goal — reliable, productive operations. When manufacturers respect the dealer channel, they gain advocates who understand local conditions, protect brand reputation and ensure that farmers receive the service they deserve.

The temptation to go direct may seem modern, but it’s shortsighted. Agriculture runs on relationships, service, and trust — values that can’t be downloaded or shipped.

The dealer model, no matter the size or ownership structure, provides the stability and trust that sustain brands for generations. Manufacturers that stay committed to their dealer networks demonstrate that they value relationships over short-term sales spikes.

The future of farm equipment sales doesn’t lie in bypassing dealers — it lies in strengthening them. That’s how manufacturers, dealers and farmers all win together.