Service Dealer held another of our regular calls with a panel of dealers from around the country yesterday, offering us the opportunity to take the temperature of the network at the start of the year.
Joining us were a cross-section of our readers, representing domestic, commercial and agricultural machinery dealerships of varying sizes. Once again we'll be keeping the panel anonymous to help engender an atmosphere of speaking freely and honestly. We thank those who joined us, for their valuable time and for sharing their forthright, expert opinions.
Positive start for many
We kicked off the discussion yesterday with a general chat regarding how our panelists felt business had begun this year for their dealerships. And I'm pleased to report that it was all rather positive. One dealer in fact in fact described the start of 2023 as "Phenomenal. The best start to a year for us ever."
Comments such as this were echoed with tales of workshops being busier than ever before. Several said how they had not even had to market special offers this winter season to get customers to bring their machines in for a service.
Others talked of, if not a booming start, but a healthy one - and this was across sales as well as servicing. There was a sense perhaps, that people were nervous coming back after the new year to what January and February might hold - but thankfully they had been pleasantly surprised.
Stocking situation
As has been the case for the past couple of years now, the conversation inevitably turned to how our panelists were finding the current stocking situation.
We heard that on certain tractors for example, dealers can still be given extremely long lead times - 2024-long lead times in some cases. And dealers of domestic products can find themselves with piles of batteries without tools, or tools without batteries. Also they may find themselves taking delivery of items that have been on order since the back-end of 2021!
So getting hold of stock can still be sporadic we heard, with suppliers varying in the the quality of their communications and messaging to dealers.
We then raised the subject of whether dealers at the start of 2023 are finding themselves overstocked with goods? With all we've talked about for past couple of years, it almost seems bizarre to be talking about this, but it is something that some readers have raised with us. The theory is large orders were put in when nothing was available, and now when these deliveries have finally come through, dealers are finding themselves with too much piling up in the storeroom that isn't shifting. We did actually have several manufacturers theorise to us about this during the height of the supply problems, concerned this would eventually come to pass.
However, with the dealers we spoke to this week, this didn't appear to be an area of great concern for their businesses. Some spoke about having ordered cautiously to avoid just a scenario, or in having been pleased with their accurate forecasting. Others who may have had more items stored than would be usual, we're not overly bothered by this as it was felt demand is still there amongst their customers - and it may help as we move into the season to have product to hand. Some were clearly burnt by lost sales these past couple of years, so having a level of stock in now wasn't seen as a bad thing necessarily.
Growth areas this year
Moving on, talk turned to where were our panel would be looking for growth in the dealership this year? We heard some interesting ideas around this, with the search for increased margin and profits common across them.
Interestingly, none of our panelists were talking about wild diversification into completely uncharted territories. It was concentrating more deeply on areas they were already involved with, or ones that were related to what they were already doing, but which offered opportunity for growth.
Several dealers who may have traditionally dealt more with domestic machinery, spoke of concentrating greater on professional trade customers. Selling to contractors or professional arborists for example, was seen as a more fruitful pursuit for their businesses this year. Concentrating on higher value machines, such as top-end battery goods, leaving the low-end petrol mower sales to other outlets, was a priority in 2023. Professional users and wealthy homeowners would be where online and in-store marketing would be targeted we were told.
In terms of a specific product that one dealer was convinced would be big this year, boundary-less robotic mowers were cited as an exciting and potentially profitable development. Apparently quite a pre-release buzz has generated around this new technology online ahead of them hitting stores. It was felt that these machines, which several manufacturers would be bringing to market this year, could have a big impact with customers - and with dealer profit margins.
Sustainability
Related to this area of progressive technology, the notion of sustainability was also brought up and whether our panelists were making the most of the opportunities that this highly topical and important area can offer to dealers.
A consensus certainly appeared to be that battery technology, with a particular emphasis on the higher-end machines, is an ever-increasingly crucial part of a dealership's arsenal.
A discussion was also had around electric ATVs and whether selling these would be good for the business? One expert dealer thought what is available right now in this regard, might not quite meet the demanding needs of all users quite yet - but technology is always in development with manufacturers and it's clearly the way things are going.
They said that as dealers, they need to be aligning themselves with the right brands and right sustainable technologies, because if they don't, they will be left behind.
Again, we would like to thank the dealers who shared with us their time and their opinions this week.
