Combines speaking of dealer changes

[northernfarmer]

The Deere dealers in Sask are joining forces, becoming partners, we'll be lucky if we have 4 seperate Deere dealers by spring...Next step: closing of the less profitable stores.

 

[tbran]

the problem, from a farmers standpoint, as I see it, is once all the competitive dealers are gone, it will be like a catalogue, here it is , order it a year in advance, and pay sticker price. We may or may not want your trade - there will be an auction here next spring, put it in it. Competition is good for farmers when buying equipment. lets say a loaded combine and 12 row head invoices for $300,000. Dealers strive to make between 8-12% margins. IF they did that on combines, thats a 30grand lick. It doesn't happen - too competitive. If a dealer washes out 2-5% on a deal they are lucky. Sooo if there is no competitiion..... the farmer will pay 15 thousand or more on a deal this size -- think about it.

 

[Jake]

We have the same situation in midwest ohio and in mideast Indiana, fortunately two different corporation owners. the competition is still alive between these two. This took place almost 9 years ago for us. I would guess in the near future they will become one.

 

[big_orange]

Here in Eastern Iowa, it is not quite to that extent, but Deere told 2 local dealers they would have multi stores or not be a Deere dealer.One bought the other out.

 

[R_O_M]

tbran, you have surprised me! Small business usually has to look at around a 15% markup to stay in business. After looking after pernickety customers, warranties, taxes and employee fringe benefits and the good lord only knows what else, it sure does not leave much for the owner _ operator. 2% to 5% markup, even on big ticket items is bordering on suicidal. A collective of agents will usually and eventually fall over due to personal problems between participants over a host of issues. Branch type structures survive due to a one owner decision making process so I would not get too concerned over the long term, particularly if the big Heavy ie. JD is leaning on everybody to go the way they want rather than the way the customer and maybe some dealers want. We had the same situation in Australia where we only have 4 major banks and a number of small regional banks with some thousands of branches in small towns right across Australia. In the name of efficiency and profits, the big four banks started to close the small branches everywhere. The customer could travel to the big branches to do his business, couldn't heIJ Result! The small banks piled into the suddenly available areas with all sorts of innovative structures such as part owned community banks, franchised banks and etc in the small towns. The big four banks are now rushing around trying to reopen branches but the horses have thoroughly bolted. The heavies in business, with the usual built in arrogance, will always try to set the situation up for their benefit regardless of what the customers want! longer term, what the customer wants, the customer eventually gets! The cycle will roll around and there will be much angst in some very high powered board rooms. When the Elephants start to mate, they become very distracted and the mice can come out of hiding and start to make some very good hay! Cheers!

 

[Kaye2]

locally our green dealer bought another store that had just closed. In the last three years or so a few dealers in MI thumb area went into one group called JandD implement, I hear they are in Ohio too. Now there are at least three big new JandD implement stores and lots of lawn equipment type outlets throughout MI.

 

[tbran]

The higher the price the lower the margin one can make is the rule of thumb. The sad thing is, according to the North American Cost of Doing Business Survey (most all dealers, all brands report through the implement dealer association) the pre tax bottom line on implement dealers is less than 5% net profit on total sales in the highest profit multistore units and below 0 before "other income" which is volume discount on the rest of the reporting dealers. The company hold back or volume discount is the profit. It is getting harder to meet volume requirements. Several million in wholegood sales to reach a 2-3% level. The implement business profit is directly tied to net farm income with a 180 day lag time - has been for my career - over 30 years. I did not know you had elephants down there. Is that where CIH combines get their 'elephant ears'IJ I figured they came from somewhere besides S Africa due to all the USA animal rights activist over there ! Madonna even brings a few kids back every now and then.

 

[meaner_gleaner]

tbran i saw the other day where the 20 or so dealers here in our area of tennessee went into tri green.time will tell how it works havent heard to much about it other than if you want to go to a dealer that normally just sells small equipment you can now go there and buy a cotton picker if you choose at the same price you could get it anywhere else.i am also curios why a couple of dealers in the area didnt go along with this .who knows what they are up to.

 

[R_O_M]

Elephants, No! Camels, yes! We even export them back to the Saudis as racing camels. Apparently our camels are quicker than theirs. Maybe a bit of syrup helps! The animal rightist, caffe-latte sipping set could not possibly survive if they left the city and had to face the rigors of the Aussie outback to protest over a few flea bitten camels! Count your blessings and be grateful! Madonna is Argentinian so we can't even blame you for inflicting that on the world!

 

[R_O_M]

Elephants, No! Camels, yes! We even export them back to the Saudis as racing camels. Apparently our camels are quicker than theirs. Maybe a bit of syrup helps! The animal rightist, caffe-latte sipping set could not possibly survive if they left the city and had to face the rigors of the Aussie outback to protest over a few flea bitten camels! Count your blessings and be grateful! Madonna is Argentinian so we can't even blame you for inflicting that on the world!