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.