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  1. #1
    Veteran Member dgl24087's Avatar
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    Default How do manufacturers choose dealers?

    I'm rather curious as to what is involved in the dealer selection process for Ag manufacturers. My reason for inquiring is based upon a highly successful tractor manufacturer awarding a franchise to a motorcycle dealership about 50 miles from me. Just don't get the philosophy involved here.

  2. #2
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    Default Re: How do manufacturers choose dealers?

    they (the manufacturer) don't "award" it, the dealership has to pay for it.

  3. #3
    Veteran Member dgl24087's Avatar
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    Default Re: How do manufacturers choose dealers?

    But they still have to meet certain criteria, or is it simply a matter of having the financial ability regardless of business acumen, product and marketing knowledge and ability?

  4. #4
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    Default Re: How do manufacturers choose dealers?

    it's like any other franchise, it's your business, but they have certain guidelines for you to follow.

  5. #5
    Silver Member CumminsLuke's Avatar
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    Default Re: How do manufacturers choose dealers?

    I have applied for (and gotten) two franchise dealerships in my life. One a Dodge, Chrysler, and Jeep store and the other a Chevrolet store. First you need enough cash (aka working capital) to meet their guideline for the size of store you plan to have. Then you have to fill out an application. They want to see experience in the business field you are trying to get into, your possible criminal background, your credit history, they contact business and personal references and then it goes pretty well to the top of the company for approval if you get past all the other things.
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  6. #6
    Veteran Member dgl24087's Avatar
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    Default Re: How do manufacturers choose dealers?

    I suppose I should go into a bit more detail. This particular make of tractor, from what I have seen, has only been retailed through other Ag dealers as a lower cost line along side one of the majors. This is the first dealership for them that is less than 100 miles from my location, and the first I have seen not affiliated with an established Ag dealer. It just seems to go against their prior business model.

  7. #7
    Elite Member
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    MessickFarmEqu's Avatar
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    Default Re: How do manufacturers choose dealers?

    what line are you talking about? That would really shed some light on your question?

  8. #8
    Silver Member teeravis1's Avatar
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    B3030HSDC

    Default Re: How do manufacturers choose dealers?

    I inquired to a tractor company about how to start a tractor dealership, and what it takes to do it. I was half seriously thinking about it. Enough to make some calls anyway. I was told I had to own a building and the property with it, that was large enough for me to hold the inventory and such they wanted, and on top of that they wanted me to have $250,000 in quick cash assets for them to even consider seriously talking to me about it. At that point I kindly told them that we had no reason to converse any longer. We went on to talk and it was interesting cause we talked about how important handling used equipment is to a dealership surviving, because the new tractor prices or so competitive the profit margin isn't huge but you still need to make enough to support all your inventory, overhead and stock. Anyway, to start a dealership I thought it would be more like the tractor co. would look at your location talk to you and kind of invest in you a little bit and work with you a bit to help you get going since you want to sell their product, but apparently that isn't the case. So once again I learned something, and once again it was not as easy I thought it might be.
    I'm no Dummy! If you have a better idea, I'll use it!

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  9. #9
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    Default Re: How do manufacturers choose dealers?

    The money helps, the market share that the manufacturer might gain also is a plus. One thing that most good companies also look at is why you want to!

  10. #10
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    Default Re: How do manufacturers choose dealers?

    Quote Originally Posted by dgl24087
    I suppose I should go into a bit more detail. This particular make of tractor, from what I have seen, has only been retailed through other Ag dealers as a lower cost line along side one of the majors. This is the first dealership for them that is less than 100 miles from my location, and the first I have seen not affiliated with an established Ag dealer. It just seems to go against their prior business model.

    Sure would like to hear a brand name but you may have hit the nail on the head. If they don't HAVE a dealer anywhere near by, they might be bending the rules to fill a void in their coverage??

    It doesn't seem to matter what the brand or product is as far as dealers go. I've been to big dealerships that I wouldn't give a dime to or ever trust to service anything and I've been to small dealers that are the same. I have some smaller dealers near me that seem to switch brands every few years and I know that people notice this and don't feel confident buying there for fear of no service in the future. A company can only do so much screening on a person to determine if they would be a good dealer or not.

    If it is a brand that is working hard to grow, they may take some chances on new dealers while some of the big companies like JD have been closing down third generation dealerships in my area in favor of huge volume multiple location dealers. Last year, they closed down two dealers within 10 miles of my location but I guess the local box stores are picking up their sales on the cheaper models?

    Ken

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