R N Johnson, Walpole, NH Losing John Deere

[ctlguy]

I have a tough time buying the simple explanation of JD Bad, Dealer Good, also. Probably doesn't help Deere's image by any means atleast in that direct area but there is most certainly more to this story than what is being related by the dealership. MFG's don't just pull franchises on whims, and it has been made known to dealer principles for "decades" that if you are not growing your orginization you are going to fail. The status quo of just surviving is gone, you certainly don't have to like it or agree but that is the case. But there is just too many avenues that the dealer may have taken beyond growing, market share, etc that caused this too happen. Too many dealers in the last few years have had great revenue and growth, I think that RN just took their eye off of the ring for a bit and they got gobbled up. As Messick mentoned it is very easy to do so, but I would say that the 2.5% figure is a tad low for high end dealer groups. I would imagine that this was not a surprise at all to RN but I can't blame them for wanting to lay blame on the MFG. As a side note 2012 was a good year to sell a dealership as succesful owners who had the opportunity to sell to groups took that option in 2012 as opposed to waiting for higher taxes in 2013. I am starting to sound like quite the Deere chearleader but wanted to point out some of the motivation behind some of the dealer sell out in recent time.

 

[murphy1244]

Bottom line is JD is getting out of the stand alone dealer biz.

 

[MessickFarmEqu]

3217986 but I would say that the 2.5% figure is a tad low for high end dealer groups.

That's actually an average number from our dealer association. Not something I made up.

 

[AKfish]

I have a tough time buying the simple explanation of JD Bad, Dealer Good, also. Probably doesn't help Deere's image by any means atleast in that direct area but there is most certainly more to this story than what is being related by the dealership. MFG's don't just pull franchises on whims, and it has been made known to dealer principles for "decades" that if you are not growing your orginization you are going to fail. The status quo of just surviving is gone, you certainly don't have to like it or agree but that is the case. But there is just too many avenues that the dealer may have taken beyond growing, market share, etc that caused this too happen. Too many dealers in the last few years have had great revenue and growth, I think that RN just took their eye off of the ring for a bit and they got gobbled up. As Messick mentoned it is very easy to do so, but I would say that the 2.5% figure is a tad low for high end dealer groups. I would imagine that this was not a surprise at all to RN but I can't blame them for wanting to lay blame on the MFG. As a side note 2012 was a good year to sell a dealership as succesful owners who had the opportunity to sell to groups took that option in 2012 as opposed to waiting for higher taxes in 2013. I am starting to sound like quite the Deere chearleader but wanted to point out some of the motivation behind some of the dealer sell out in recent time.

Often here on TBN, the discussion on prices for new equipment has recognized that there are local and regional differences between dealerships. Comparing tractor sales in Maine to Indiana comes to mind...

Annual return to a dealership in some of the less populated areas or regional locations where agriculture, landscaping and urban buyers is small (or nearly nonexistant) that 2.5% might be on the high end!!!

So, for those consumers as well as entrepeneur's in small market locations -- what can they expect from JD or other OEM's - that have embraced the Walmart business model??? SOL... maybe?

The concept of "growing your business" and "taking your eye off the ring" or facing the grim reaper from corporate headquarter's seems to fly in the face of reality for those areas of the country that do not (and most likely will not) see expansive market growth for years and years.

AKfish

 

[wdchyd]

The magic secret to success in business is buy low, sell high....unfortunately if the equasion is upside down then time will catch up to you.....maybe this was the case with RN J

I've said in another thread of favorite quotes...."When your outgo exceeds your income, your upkeep is your downfall"

It certainly is challenging in business to satisfy everybody how wants "their" money when running a business and it can become a tug-of-war to the owners if money is tight.....at some point there is a factor of changing the business direction/strategy, or moving on to greener pastures

2.5 percent is certainly not a huge pile of cushion should things go wrong after everyone else gets paid

 

[ctlguy]

That's actually an average number from our dealer association. Not something I made up.

Not saying you did, but there are peer dealer groups doing better than 2.5%. I did say a tad, but better.

 

[ctlguy]

Often here on TBN, the discussion on prices for new equipment has recognized that there are local and regional differences between dealerships. Comparing tractor sales in Maine to Indiana comes to mind...

Annual return to a dealership in some of the less populated areas or regional locations where agriculture, landscaping and urban buyers is small (or nearly nonexistant) that 2.5% might be on the high end!!!

So, for those consumers as well as entrepeneur's in small market locations -- what can they expect from JD or other OEM's - that have embraced the Walmart business model??? SOL... maybe?

The concept of "growing your business" and "taking your eye off the ring" or facing the grim reaper from corporate headquarter's seems to fly in the face of reality for those areas of the country that do not (and most likely will not) see expansive market growth for years and years.

AKfish

Taking their eye off the ring was just my thoughts on what was probably just a very small part of what may have happened to these folks. As far as the entrepeneur in the small market and some of these oem's being SOL you are probably right. Good or bad that seems to be the case. I guess the main point that I was poorly trying to make is that I doubt that one day "out of the blue" a big wig slopped himself down in the owners office and said your done selling our equipment. I am certainly not a market expert just my arrogant opinion.

 

[AKfish]

Taking their eye off the ring was just my thoughts on what was probably just a very small part of what may have happened to these folks. As far as the entrepeneur in the small market and some of these oem's being SOL you are probably right. Good or bad that seems to be the case. I guess the main point that I was poorly trying to make is that I doubt that one day "out of the blue" a big wig slopped himself down in the owners office and said your done selling our equipment. I am certainly not a market expert just my arrogant opinion.

I understand... I would not expect that JD or any of the other manufacturer's would just "show up outta the blue" and demand they turn in their keys! But... the one size fits all philosophy of business ala Walmart - Superstores - is not the kind of development many small-town, low population density area folk's accept with open arms!

AKfish

 

[Coyote machine]

Its survival of the fittest.JD and other huge companies no longer look at or care about the mom and pop model of business, even if it was how it started out in this country for their product and it's growth. 80 years, fourth oldest, doesn't mean squat anymore, it's all about the computer model and growth of AGRABUSINESS. What was farming and agribusiness has and is going by the wayside, and small volume areas like New England, which are loosing more farms each year, are small potatoes to multinational companies like Deere.
What's really relevant to the local area about this trend is one needs to start TODAY figuring out where and how to buy their farm related equipment. Who IS there for you- blue, orange, red? Who will be around for the foreseeable future to service and sell parts, etc.
Vote with your wallets, and choose a company that is local enough to be able to take care of your needs.
To the poster from VT who's looking: did you try Champlain Valley Equipment in Middlebury? Or one of their other 5 stores in VT? They service and sell Kubota and N. Holland? I recently bought my HLA snowplow from the Middlebury store. They took good care of me over the phone....
Sorry to those Deere guys who are getting the shaft by the corporate methods being employed today. This has little to do with the individual dealer as much as it has to do with the corporate culture. We all loose out in the megastore model- especially smaller stores and communities.

 

[NHmitch]

RN had their auction last week, and now they are running a "yard sale" for several weeks. I went today, on day 2, and they had a warehouse full of tractor parts, tools, tires, shelves, rims, and just about everything a large tractor dealership acquires since 1929. I actually felt bad being there, because they looked pretty sad. It was one of the owners, and his daughter, and a mechanic who had been there since 1973. Amazing what a massive effect a company pulling their product can have. I wish that I had been there for the auction, and had extra spending cash, because they had a John Deere LA, and I have always wanted one. Maybe someday. Well, back tomorrow to pick up three barrels, a suitcase bracket, and whatever else I can find to bring home past the wife