What Is a 'Dealer' These Days?

Toro recently announced that it would be taking steps to keep dealers in the loop when it sells product from its website. Several Toro dealers are fired up about this move, saying it will be a good thing for Toro dealers. Others aren’t so sure. Others are downright mad. That’s to be expected, as independent servicing dealers are often all over the map on a host of issues—especially controversial issues like “Internet selling.”

My belief is that Toro is trying to do the right thing by its dealers. Internet selling is indeed a growing phenomenon, and will only continue to grow. Toro is taking steps to tap into this increasingly popular retail channel without bypassing its dealers. Other manufacturers have taken similar measures, although their efforts to communicate the measures haven’t been nearly as organized as Toro’s.

I am puzzled, though, that Toro says it will also continue selling through www.powerequipmentdirect.com. Toro calls PED a dealer. I spoke to a couple of other manufacturers that said the same thing: “PED is a dealer.”

Really? PED is a dealer. Don’t dealers offer parts and service support? It appears as though PED merely suggests parts and service support. The Illinois-based company doesn’t even have formal arrangements with actual servicing dealers to service the products they sell. PED simply tells its customers to search OEM dealer locators to find service centers. At the same time, PED is advertising perks like “free shipping” and “no sales tax.” Manufacturers continue to turn a blind eye to activities like this.

Kudos to PED, quite frankly. They are doing what smart entrepreneurs do in a free-market economy. But the precedent of calling a company like this a dealer concerns me.

This could be the future of the lawn and garden equipment business: mega-dealers who sell online, and small shops scattered throughout the country who pick up the pieces and provide service. Maybe that’s not a bad thing. One thing I’ve learned over the years is that service-focused dealers often struggle when transitioning to the retail game.

At the same time, good-size dealers with solid retail savvy that still provide parts/service can continue to hammer home that servicing dealer advantage: high-end product, expertise, and aftermarket support throughout the life of the machine. That’s what I thought a dealer always did.

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