John Deere weeding out dealerships

[jmc]

Interesting article in the Wall Street Journal today about JD consolidating dealers. Seems that small dealers, $5 to 8$ million in annual sales, don't have the critical mass for inventory management and staff. Deere Corporate told them all in 2002 they need to either be buyers of other dealerships or sellers of their own.

Another factor is dealers too close together end up competing with each other, and people (like you guys on TBN) are comparing prices on the internet!

Deere is reportedly trying to force some dealers to sell only Deere products and that is ending up in some lawsuits against Deere.

The article also mentions that Agco and CNH (New Holland?) are consolidating but not as aggressively as Deere.

John

 

[Dutch445]

would love to read the article,
can you post a link or
copy the article into TBN?

thanks

 

[art]

John, that is nothing new and it's been going on for as long as I've been in the industry. It doesn't make to much difference as to what the brand is so much as the urgency with some companies.

Deere was doing it in the late 70's, and IH was to trying to improve the images of the dealers that didn't have show places for business. Just think of it this way. If a rep can see seven dealers a week and they cover a larger area with more stores being all the same name then he has less paperwork and less people to see to get the job done and less accounts to deal with on an individual basis. They can make his area larger and hopefully have more dollars with less people. Helps their bottom line when it's all working right!

 

[Farmwithjunk]

John, that is nothing new and it's been going on for as long as I've been in the industry. It doesn't make to much difference as to what the brand is so much as the urgency with some companies.

Deere was doing it in the late 70's, and IH was to trying to improve the images of the dealers that didn't have show places for business. Just think of it this way. If a rep can see seven dealers a week and they cover a larger area with more stores being all the same name then he has less paperwork and less people to see to get the job done and less accounts to deal with on an individual basis. They can make his area larger and hopefully have more dollars with less people. Helps their bottom line when it's all working right!

Same has been going on in auto sales for "The Big Three" in recent years. You'll hear fans of the "old dealerships" or fans of smaller market brands badmouthing the concept, but think about it in the terms described in the article. It just makes sense.

Like them or not, Deere has always been at the forefront of business and marketing in their field. This is just "the modern way".

 

[ChuckinNH]

On paper, many of these concepts make a great deal of sense, and there are some very bright people who have spent many dollars learning these methods, and much time at computers optimizing the projected results. Unfortunately, people who are interested in using many products like to deal, and interact with others who share that interest, and some experience. These people are sometimes not inclined to spend hard earned money at places where there is no knowledge base, and on products that were designed more for marketing purposes than for actual use. I was involved in the firearms industry for many years, and saw the same things happening there, and also saw lower interest in products that some "expert" wanted to save $.03 per unit on. It takes the hard work of many people to build a strong company, and many loyal customers to support that. I find it amazing how fast these companies can forget the things that got them there the first time the quaterly reports don't meet growth expectations. Perhaps they should look back at what made those expectations possible? Efficiency is imperative to success in these days of severe competition, but often that only means doing things the right way the first time, and understanding the needs ( and perhaps more importantly the wants, and dreams) of your customer base. Consolidating your dealerships, for example, is a poor replacement for having a product recall, or problematic products in the field. Too bad that many companies won't invest as much in their people as they do in this kind of effort!

OK, I'm off my box now........
Chuck

 

[swines]

Agco is doing the same thing. The JD dealer I use was a Massey and Hesston dealer. He had Hesston for nearly 15 years. Agco told him he had to either drop JD and go all Agco or they'd terminate the dealer agreement. Hmmm...he has 60% of the local tractor sales with JD products....so, he dropped Agco. Now, the nearest Massey or Hesston dealer is 210 miles away...smooth move..eh?

 

[jmc]

would love to read the article,
can you post a link or
copy the article into TBN?

thanks

Dutch445,

Here's a link but its a pay site. They offer a free 2 week trial offer. Pasting copyright material here is not allowed. Otherwise, check your PM.

John

Free Article - WSJ.com

 

[Dutch445]

thx

 

[Deadman]

My JD dealer just closed because of this crap.

 

[capt_met]

i can't stand my local jd dealer. the next closest one has now changed from selling jd skids steers and mini-ex's to jcb. the folks at this dealership were great and i was coming very close to buying one from them however now all bets are off. cat and new holland all are have great sales staff that really seem to want the bussiness. at the closest jd dealer when i drive up with bussiness signs on the truck that show i work in excavtion they don't give the time off day. the only thing that makes it worse is they don't seem to know as much about their product as i do. no jd for me as much as i would like till something changes. as of now i am hoping the local nortrax will get the compact jd construction equip. then i can go shopping. till then looking more like new holland.
good luck,