Wilson Lawn & Garden Inc.
In our area of south central Virginia, we are experiencing both problems. On the one hand, some manufacturers continue to put product in every available square inch of floor space the mass merchants will give them.
On the other hand, the quality of dealers has improved somewhat, but some dealers don't really have any good idea what their daily cost of operation is. This tends to give them a false sense of security, especially during the spring selling season when sales are good.
A dealer's focus has to be on off-season expenses and, thus, garnering enough profit during the selling season to take care of the slower times. I have to say it is better than it used to be. Today's dealer, if he has survived the low-ball competition, knows what it takes, but most likely does not have the cash to improve his visibility and image.
The repair-only dealer is the one who needs to raise the bar. They tend to be marginal businesspeople who are not very well-trained in many cases. Unfortunately, they will get a portion of the repair business without the overhead. Today's "give me more for less" customer is not leaving a stone unturned in order to find and take advantage of these poor folks, and I mean poor folks because those types of customers intend to keep it that way.
If the manufacturers would give us an area we could call our own and not be choked by dealer on top of dealer (mass merchant or independent), we would have the opportunity to grow our businesses. We might even have enough profit to modernize our facilities and get more trained people on board in order to have longer hours and better locations.
Look at the manufacturers, one in particular, who are investing in their dealers and helping them grow, through business management training and technical training. I challenge all manufacturers to check out this company's growth numbers and the channels in which it distributes.
West Chester Lawn & Garden
Liberty Township, OH
The mass channel is driving down name-brand products to levels where, as servicing dealers, we need to consider not selling them. We started selling lawn and garden equipment in 1988, at which time our low-end tractor was selling at $1,999 with $450 in our pocket after the sale. Today the low-end name brand product sells for $1,299 with $140 in our pocket after the sale. This is the big issue, and dealers who don't step up and start working together won't survive in the future.
Dealers must get proactive and start working with each other so we can make the profit levels we all deserve. Some dealers hurt the industry image and profit levels, but I firmly believe they won't survive over the next couple years without developing better networking with other fellow dealers.
Medina Tractor Sales
The big box stores have hurt us over the years. We have lost the market of the average consumer, which had really helped us with our sales revenue. We dealers have a lot of inventory to move, so we've responded to the need to lower our margins, and the result is diminished profits.
The biggest issue now is the trend for consumers to buy commercial equipment. There are too many lines competing to get the share we need to cover our overhead costs. Plus, when a homeowner purchases any commercial product, we need to have the profit up front to cover the lack of parts and service. The homeowner does not put the same wear and tear on a commercial product that landscapers do, so they have no need to come back to us for a long time.
Hopefully the commercial users will start making more money so they can update their fleets. Keep in mind that this is northeastern Ohio and our winters have been overall lean on snow, creating another diminished-profit crunch during our off-season.
In summary: Big box store pricing, the manufacturer's lust for more market share and weather patterns are some of the biggest forces we fight. They are also the reasons many of us are not making enough to survive.
Sharp's Small Engine Repair
The cut-throat, cheap, sub-par dealers are our worst enemies right now—and in the future. They do nothing positive for any of us and only serve to drag the whole industry down to their level in the customer's eyes.
If you want to call yourself a dealer, it takes more than just signing an agreement with a manufacturer. It also means that you care about your profession, which includes your peers. You will strive to make the best of any situation you are presented with and will act professionally at all times when dealing with customers.
The cheap, sub-par "dealers" do not care about their customers, and most likely they are just doing the "lawn mower fixing thing" as a supplement to their day jobs. This type of "dealer" is what the public should not even be acquainted with, much less do business with.
This type of "dealer" does not think that you need the special tools, manuals, computers, etc. that the true dealers have worked years to acquire. These guys do not actively search for better ways to run their businesses, nor are they interested in the new products coming out that they will eventually need to work on. They are only interested in the quick sale of parts and equipment, and do not understand that they are losing money when they discount everything to beat other dealers out of sales. Unfortunately, as the turnover of shops grows, this type of dealer can make a resurgence in the industry if manufacturers do not do something about it.
True dealers actively seek out the latest service books, tools, etc. to add to their knowledge of the products tha they sell and service. They take pride in their work and stand behind it. From the one-man shops to the mom-and-pops to the large million-dollar shops, true dealers are active in their industry. We make the most of what we have and are proud to share ideas with other dealers.
Louis Lawn Mower Inc.
I consider both big boxes and cheap-selling dealers in the same category. It seems like the dealer selling cheaply is threatened by the box stores.
It does not matter how huge a dealer is—he cannot compete against the big box stores. That's why we personally don't try to. Our business has much more to offer than the box stores. We go to meetings and schools to know what we are selling. The box stores do not have the knowledge and never will.
Just like gas station owners are not smart enough to charge a fair price for gas, many dealers compete to be the lowest priced. Dealers can't compete with box stores on the price level. But when it comes to product quality and after-sale service, we should be the only place to buy.
Still, I think the biggest problem we face is the lack of support from the manufacturers. Manufacturers just want to sell units; they do not see the long-term value in service after the sale. If a certain manufacturer decides to get out of small locations, it's clear to see where they think their future is.
Country Mower & Small Engine
Colorado Springs, CO
Most dealers in my area have gotten used to the big box stores' so-called threats and have worked around or through them. Our immediate threat comes from low-balling sales and service providers. They seem to pop up, sell low and provide poor-quality repairs. This hurts the dealers who have invested in their businesses for the long haul and follow all the guidelines.
I personally fault some of the distributors because they will sign up just about anyone. I believe enforcement of dealer standards is necessary to prevent this from happening.
Leiser's Rental Barn
Forks Township, PA
I gave up selling commercial mowers because a local independent was selling just above cost. In a more recent issue, my snow thrower distributor set up a hardware store without onsite service 1/4 mile from my store. I haven't seen the e-Bay sellers take my sales yet, but I keep an eye on the prices. It seems shipping charges tend to keep them from making a big difference.
Carl's Mower & Saw
We feel that dealers under-cutting other dealers is definitely a problem. Why do we do this to each other? All we are doing is hurting ourselves in the long-term. Just the other day I had a dealer 10 miles away who undercut me by $80 on a chain saw. Why? Dealers cutting prices just helps the big boxes.
Send us your thoughts on this subject, or anything else that's on your mind, for possible inclusion in a future installment of Market Views. Send an e-mail to Gregg.Wartgow@cygnuspub.com, or send a fax to 920-328-9011.