How to open an Agricultural Equipment Dealership

[darrant]

Hello Everyone,
I am a student working on a paper on the Ag Equipment Industry. I need to know how agricultural dealerships are setup. Any help is greatly appreciated.

Do manufacturers sell to dealers on consignment or is it cash on delivery?

How much on average do manufacture charge dealers as an upfront cost to set up a dealership?

Is it hard to be a dealer for a large agricultural equipment manufacturer?

I apologize, some of these questions may seem stupid but I need to educate myself about this industry.

Thanks,
Darren

 

[sweettractors]

Hello Everyone,
I am a student working on a paper on the Ag Equipment Industry. I need to know how agricultural dealerships are setup. Any help is greatly appreciated.

Do manufacturers sell to dealers on consignment or is it cash on delivery?

How much on average do manufacture charge dealers as an upfront cost to set up a dealership?

Is it hard to be a dealer for a large agricultural equipment manufacturer?

I apologize, some of these questions may seem stupid but I need to educate myself about this industry.

Thanks,
Darren

IMHO,The best way to setup a dealership is to save your money and buy inventory on a cash only basis. You can be a lot more competitive this way. Tractor and Implement mfgrs usually want you to stock a minimum amt of inventory and that varies on the location your in. Most
will floor plan it for you for a specific time. Maybe 6 months to a year. When that time runs out you pay in full what is on your floor plan. If a individual wanted to setup a dealership in todays economy, he would need lots of money and a low IQ. Ken Sweet

 

[darrant]

Hi Ken, Thanks for the reply.

So in essence, the manufacturer would stock your floor for 6 months to a year and then you pony up the cash for the inventory?

btw, what's wrong with today's economy? I heard that there was a shortage for agricultural equipment even used equipment.

 

[RickB]

Dealers selling to large production agriculture commodity growers are doing well. Dealers selling to a suburban/small and medium sized hay and forage/livestock customer base are still in the economic crapper with the rest of the country.

Plan on $1 million in equity to get the attention of one of the 4 mainline manufacturers. And having that much cash and proposing a single store business model won't guarantee that they return your inquiry.

Poor product availability spells frustration and lost profit for dealers.

 

[jbooth]

IMHO,The best way to setup a dealership is to save your money and buy inventory on a cash only basis. You can be a lot more competitive this way. Tractor and Implement mfgrs usually want you to stock a minimum amt of inventory and that varies on the location your in. Most
will floor plan it for you for a specific time. Maybe 6 months to a year. When that time runs out you pay in full what is on your floor plan. If a individual wanted to setup a dealership in todays economy, he would need lots of money and a low IQ. Ken Sweet

Lots of money and a low IQ. I like that answer. Before retiring I had to supervise other employees. My favorite was; "I would trade 40 points off of your IQ for a bit of ambition".