Critical Condition

As the number of lawn and garden dealers has continued to dwindle, more dealers are feeling as though their voice has been lost. As one dealer put it, “Manufacturers act like we need them to survive, but I think they need us more. Until all outdoor power equipment becomes disposable, dealers are badly needed.”

Servicing dealers are undoubtedly needed. The question is: how many?

According to the U.S. Census Bureau, the number of “lawn and garden equipment and supplies stores” dropped 12% from 2002 to 2008. The number of “outdoor power equipment stores” specifically dropped 7%. The attrition of service-only businesses has been even more dramatic. The number of “lawn and garden equipment repair and maintenance” businesses has dropped 28% since 2004, and 47% since 2001.

Nonetheless, 2002-2008 represented a period of strong growth in the industry. Now—post-economic collapse where consumers are hanging onto equipment longer and altogether shopping differently—Green Industry observers wonder just how many equipment retail and/or service centers are needed to satisfy demand.

Regardless of the number, it’s important to remember that the manufacturer/dealer relationship is symbiotic. The North American Equipment Dealers Association (NAEDA) is trying to draw attention to that often disregarded fact. They’ve established an OPE Industry Relations Task Force that will regularly bring dealers and manufacturers together to discuss important issues.

Internet selling

Selling parts and equipment on the Internet is at the top of the priority list, according to Mike Williams, NAEDA’s treasurer and vice president of government relations. How pricing is published and how territories are protected are among the biggest challenges.

Manufacturers selling direct to end-users is definitely a growing issue. Dealers are also concerned about heavily discounted Internet prices. When a consumer sees this type of pricing on the Internet, and then stops into a dealership and sees the dealer’s price, the dealer is put into a difficult position.

The same can be said for parts. “It’s not that dealers feel they can’t compete when it comes to Internet parts sales,” Williams points out. “The problem emerges when you have someone who’s undercutting everyone else and then gets rewarded with a volume discount.”

“With outdoor power equipment there aren’t always well-defined territories,” says Paul Kindinger, president and CEO of NAEDA. “On the ag side there are, so there are more ways to police and control Internet selling.” For instance, financial incentives that encourage dealers to only sell within their territory sometimes prove effective.

That doesn’t stop the box stores or online wholesalers like Power Equipment Direct from doing what they do, though. “There are way too many Internet sites selling parts and equipment,” one dealer said. “Manufacturers say they monitor it closely, which I don’t think is true. But if they do monitor it, they sure don’t do much about stopping it.”

The problem is that the Internet is becoming too enticing for some to resist. Roughly 163 million people bought something online in 2009. That number is expected to grow to 201 million by 2015. Online retail sales are soon expected to surpass the $200 billion-per-year mark.

It’s not just books, video games and shoes that consumers are buying online either. Small appliances and garden tools both made the top 20.

“The Internet has some outstanding potential for us dealers to benefit from,” says Josh Ahearn of Ahearn Equipment in Spencer, MA. “We’re hoping that manufacturers will work to adopt comprehensive Internet marketing policies. Overall I’m not opposed to Internet selling, as long as it’s locally targeted and done responsibly. It would also help if manufacturers did more to educate consumers on the benefits of purchasing equipment locally.”