You may remember last week I mentioned in this blog how a dealer I'd heard from had voiced concerns regarding disintermediation. After my trip to an online dictionary, I understood this to be the concept of manufacturers cutting out the middleman (or dealer) and selling their goods directly to the consumer.

Apparently it's a trend which has been increasingly seen on the high street during the time of Covid and the dealer I heard from had concerns that the practice was making its way into our sector too.

So I put a call out to see what thoughts our readers had on the subject. We had a couple of interesting thoughts posted below the line on the blog, one of which described the actions of some manufacturers as a "creeping threat".

I subsequently heard from a dealer who didn't want to post publicly, or to have their name revealed, who explained in detail to me just why they believe that disintermediation has become what they termed as a "real problem" of late.

Whilst not naming names to me, they spoke of two manufacturers who they felt in particular believed it was acceptable to undercut dealers with deals that they couldn't afford to offer. Clearly the dealer I spoke to was not happy about the situation to say the least.

They gave me several examples of where they felt these manufacturers were effectively cutting the dealer out of the process. They spoke about a grass trimmer for example, that they said was so cheap that they can (and do) sell it at full RRP, rather than giving a discount. They would make £40+ profit selling it for that - but when the manufacturer sold that machine, they gave away over £50 worth of freebies that the dealer might have sold for extra profit and they received just "a measly £13 commission". 

Another example they gave was related to robot mowers. They spoke of a manufacturer who was offering customers a cashback if the mower was bought directly from them - yet the dealer could not give that same cashback. The cashback was so large, they said, that it gave them a moral dilemma. Do they keep quiet and sell the stock they have bought from the manufacturer or do they do the customer a favour and tell them if they order direct they could save up to £350? 

A final example they cited was from earlier in the year where they said they honoured the promotional pricing on certain machines and the manufacturer then undercut them online by offering lower prices than their own promotion.

And it wasn't just on whole goods sales where they felt disintermediation was happening - they believed after-sales were also being taken away. Some manufacturers, they said, are taking the easy pickings such as mower blades, nylon cord etc. "These things are our bread and butter," they told me.

"I don’t think some manufacturers realise that dealers need the profit on new machinery sales to support their businesses," the dealer said. "We are desperate to recruit good staff but the remuneration we can afford to pay is low. What we pay some of our technicians with years’ of experience is little more than a teenager could get stacking shelves in a supermarket. That’s wrong. But, our service prices are held low because of the value of the products we are working on. The value of those products is in turn held low by the few dealers who insist on giving product away online."

They continued, "Whilst we don’t necessarily match online prices there is only so much more we can get from a customer and our margins are being eroded. If we now have manufacturers jumping into the mix with cheap prices, freebies and other deals we can’t match and they are 'selling it in a box', it does not bode well for the future."

The dealer I heard from said that if manufacturers must sell online, they would like more to adopt what they described as "the Mountfield model", where the dealer receives the same margin as if they’d sold the product.

"We don’t - and never have - expected something for nothing," they said, "but if manufacturers want us to be here to service and support their product they need to make sure that the financial viability stacks up."

Strong, impassioned words. And ones which perhaps many reading this today can relate to?

Please feel free to leave any thoughts below.

With effect from yesterday (17 September 2020) HRN Tractors Ltd has been appointed by Kubota (UK) Ltd as a full-line dealer for Scotland across its six depots.

HRN have featured in Service Dealer's news pages this summer, having recently announced their split from John Deere following 40 years.

The dealership will now represent Kubota construction equipment for all of Scotland, whilst its agricultural products will be available for depots north of Perth, with groundcare and professional turf products for the region north of Dundee.

“This appointment reinforces Kubota’s commitment to its customers and the market,” explained David Hart, managing director of Kubota (UK). “As a full-line dealer, HRN Tractors will be in a strong position to make the future investments required in facilities, technology and staff, to actively support our customers across agricultural, groundcare and construction sectors.”

HRN Tractors was established by the Barclay family in 1980. In addition to its extensive dealership activities, the family also farms across 2,000 acres of combinable crops and is home to the pedigree Harestone herd. With its head office at Insch, they have depots at Turriff, Kinloss, Muir of Ord, Caithness and Balbeggie.

“HRN is delighted to have received the Kubota franchise,” says Hamish Bruce, dealer principal of HRN Tractors. “It supplies us with a wide range of agricultural, construction and groundcare products to sell to our growing customer base. We believe that Kubota has massive potential for market growth in Scotland, and that HRN and Kubota have a very bright future together.”

According to a report in the Milwaukee Business Journal, on Tuesday this week, a U.S bankruptcy court judge approved Briggs & Stratton’s plan to sell the company to private equity firm KPS Capital Partners

The report says that, depending on when the sale is completed, Briggs’ unsecured creditors will receive 7-10 cents on the dollar.

The paper also states that the legal team working for Briggs & Stratton and its unsecured creditors committee said the sooner the sale is transacted, the more money will be available.

The judge's approval of the plan allows Briggs and KPS to proceed with the transaction they announced July 20 when the manufacturer filed for Chapter 11 bankruptcy. Ronit Berkovich, an attorney for Briggs, told the Milwaukee Business Journal that the sale will be completed the week of September 21st.

The report went on to say that $35-$45 million in funds will be available to the unsecured creditors, yielding 7-8.4 cents on the dollars, according to Rob Start, attorney for the creditors committee. If the funds reach close to $50 million, that figure could go up to 10 cents on the dollar, he added.

According to the report, "Briggs financial performance has improved since July 20 when the company filed for bankruptcy, which will provide more cash than the company and its advisers initially assumed, Berkovich said. Also, the company received regulatory approvals sooner than anticipated, which helps accelerate the deal, she said."

The way clear for KPS acquiring Briggs & Stratton follows first, Generac pulling out of bidding for the company's assets - followed by an unsecured creditors committee failing to file an objection to the transaction by the September 10th deadline.

Catalyst Computer Systems Ltd, the supplier of business management software to specialist dealers, has announced that it has been acquired by Constellation Software Inc. 

Constellation Software is part of the Perseus operating group who are based in Toronto, Canada. The acquisition of Catalyst further expands Perseus’s presence in the UK’s dealership software market, having bought Ibcos in 2012. Overall, Catalyst marks Perseus’s ninth acquisition in the dealership software market, and is now part of the Constellation Dealer Group.

In a statement Perseus said the acquisition will allow two of the three founding directors of Catalyst - Charles Allison and Les Ward - to retire, while Catalyst’s sales & marketing director, Jeff Kingsbury-Smith, will remain in charge as the managing director. Catalyst will retain its headquarters in Mountsorrel, Loughborough.

“We are delighted to have Catalyst’s employees and customers join the Perseus family,” said Daniel Zinman, the vice president of the Perseus Group. “Catalyst’s addition to our portfolio will expand our insight into the industries we already serve in the UK, which will help us pioneer new technologies in ways we haven’t thought of.”

Jeff Kingsbury-Smith said, "Our acquisition by Constellation Software Inc is a major step forward for Catalyst. We will benefit from a depth of resources previously unimaginable, backed by the financial strength and experience that such a large group can offer. Our plan is to continue to develop and combine forward-thinking software services with the friendly personal service we have always offered."

Catalyst say they will remain an independent trading company and will continue developing software. In a statement they say their infrastructure and office are unchanged to ensure minimal disruption. Software development, support, training and upgrades will continue as normal. From a customers' perspective, they say, there will be no major changes.

The company say if dealers have any questions to feel free to contact them in the usual ways. All contact details are unchanged.

Listen to the full Paul Hemingway interview

Magic Distribution have taken their first delivery of BucketBarrow this week.

The company had initially shown the patented wheelbarrow system from Australia which has a bucket and scoop configuration that integrates with the barrow, for the first time at the Garden Press Event back in the spring. However the first stock was delayed due to Covid.

Magic Distribution say with the products supply chain now back to full capacity, the first delivery has now arrived with follow up stock already planned due to the high level of interest already shown.

John Hall, managing director of Magic Distribution said, “This is truly a unique product that we fell in love with as soon as we saw it. Not only is it a great idea that is useful both to casual gardeners all the way through to use on building sites, but it is also meticulously engineered for ease of use and durability. Even the entry level URBAN88 barrow would hold it’s own against most trade barrows. The PRO models have extra durable materials and reinforcements making them suitable for even the toughest jobs.” 

Magic Distribution say BucketBarrow is instantly available to all dealers who work with Magic Distribution selling the other brands in their range; Sherpa Tools, Ambrogio & Robomow - but there are also opportunities for new dealers looking to add something different to their showroom or website.

“In these tough times we are confident that BucketBarrow will offer something different to dealers and gain them incremental business while offering their customers something really special. As this product is so unique, we are keen to build relationships with new dealers who maybe don’t deal with us on our other brands, but for who a wheelbarrow like this could really suit their customers”.

GGM Groundscare say they are taking their dedication to being an eco-friendly organisation to the next level and are committing to improve their green credentials even further.

The Colne-based organisation says that over the lockdown period the business took stock and investigated ways to enhance their environmental awareness, undertaking several new measures including investing in renewable energy, reducing energy consumption and CO2 emissions and helping improve air quality locally.

GGM's two new electric vans

The move came after the company completed a full energy and environmental audit and joined the Chamber of Trade’s Green Rose programme, and are currently working towards the ISO14001 environmental standard.

Chris Gibson, managing director said, “GGM Groundscare recognise that, as with every organisation, our business activities impact upon our environment in terms of both our routine operations and our development. As a responsible and environmentally aware organisation, we acknowledge that we have a commitment to help protect the environment in every way we can.

“To this end, we’ve undertaken a range of measures to improve our already excellent green credentials. We are committed to ensuring our operations take into account the impact on the environment by reducing the consumption of fossil fuels and to incorporate long-term strategies for efficiency into our Environmental and Sustainability policy planning and development, with the goal of achieving ISO14001 Certification on the pathway ultimately to carbon neutrality.”

The company says the new drive includes the addition of two new electric vans to their fleet and will they will replace the existing vehicle fleet where appropriate with electric vehicles which will be used for supporting service and hire customers. GGM say this move is calculated to save 30 tonnes of carbon in the first year, reducing the carbon footprint as well as improving air quality in the local community. In addition, the business has installed electric vehicle charging units which are offered to customers and suppliers free of charge.

The business has also invested in Solar Photovoltaics Technology (Solar PV Panels) with the support of the Chamber’s Low Carbon grant programme which will improve energy and environmental efficiencies. The company says that investing in solar energy allows them to dramatically reduce their CO2 emissions whilst also reducing costs and assisting them in meeting environmental and sustainability targets. In addition, GGM decided that they would benefit from upgrading the current lighting system, which would lower energy consumption and additionally install lighting controls to further reduce excess energy consumption by using motion / light sensors and timing controls, along with LED lighting.

The business has also undertaken several additional green initiatives which they believe will have a positive impact on employees' health and wellbeing, as well as the environment. At Colne, showers and a secure bike rack are being installed with the support of Lancashire County Council’s Connecting East Lancashire initiative, which the company hope will encourage take up of their cycle to work scheme. Plus at Haydock a wild flower oasis has been created to encourage biodiversity and provide an area for the team to take a break and help maintain good mental health.

Chris Gibson concluded, “GGM are proactively investing in greener initiatives to minimise our carbon footprint and demonstrate to our customers, suppliers, employees and the local community that we care about the local environment.

“We’re proud of the progress that we have made so far and we will constantly strive to improve in every way we can”.

Claydon Drills has announced the appointment of Robert D Webster Ltd to handle the sale and service of their Opti-Till crop establishment products in East Yorkshire, parts of South Yorkshire, and North Lincolnshire.

A family business which was established by the late Bob Webster, Robert D Webster Ltd has gone from strength to strength for over 50 years and now operates three depots, at Owstwick, Hutton Cranswick and Howden.

John Jackson, Robert D. Webster’s aftersales director, said, “Claydon is a logical addition to our product portfolio at a time when farmers are looking for ways to reduce production costs. In addition to selling new Opti-Till products we are also supporting existing Claydon customers in an area from Driffield in the north, across to Doncaster in the west and down to Brigg in the south. Our Claydon demonstration products will be based at Howden, which is within 45 minutes’ drive from our two other locations."

Rob Dunk, sales manager for Claydon in the UK and ROI, added, “Robert D Webster is a highly-professional, family-owned business and we are delighted to be working with them. Their appointment is an extension of our strategy to offer the Claydon Opti-Till range through professional dealers across the UK."

Doosan Infracore Europe has appointed Leicester-based Pioneer Plant Ltd as the new authorised Doosan Dealer for Leicestershire, Northamptonshire, Cambridgeshire and the PE and NG postcode areas of South Lincolnshire in the UK.

L-R: Brian Conn and Steve Corner, joint partners in Pioneer Plant

Pioneer Plant is now solely responsible for sales and servicing of the Doosan crawler, wheeled and mini/midi excavator, wheel loader, articulated dump truck and attachment ranges in this area.

As the latest addition to the UK dealer network Brian Conn and Steve Corner, joint partners in Pioneer Plant, offer over 40 years of plant dealership experience for both new and used equipment. 

Brian Conn said, “As well as many new prospects, there is a high existing population of Doosan machines in our area which we have taken under our wing. We have received a great response from customers and have already secured orders for over 25 new Doosan machines.

A 10-year-old schoolboy has been inducted in to the ranks of Honda Power Products Master Technicians after restoring a Honda lawnmower to factory fresh condition over the summer holidays.

Leon Poots from Essex completed the comprehensive nut and bolt restoration of a 2004 Honda Izy Lawnmower as a summer project in lieu of typical school holiday activities.

With a whole summer ahead of him, Leon said he “wanted to do something different and as my dad repairs all types of lawnmowers, I wanted to know about how an engine works and the various components that make it up. My dad, Richard, said that if I was really interested, he would bring one home that had been scrapped.”

Shortly after, Richard, who works out of the Ernest Doe dealership in Sudbury, presented his son with a 16-year-old Honda HRG 465 C2 PDE, otherwise known as the Izy.

Before the restoration work started, Richard outlined all-important safety measures to follow throughout the project. As a result, Leon exercised due care. Continuing to channel this professional approach, Leon addressed his first issue – working from home – by constructing a makeshift bench out of two chairs and a pallet to create a safe workspace.

Despite being destined for scrap, the Izy lawnmower’s engine showed clear signs of life according to Leon: “Surprisingly it started but it was cutting out on low idle.” Now with an understanding of the job facing him and not shy of getting his hands dirty, Leon set about disassembling the mower down to its constituent parts.

Starting with the steel deck, Richard welded up some holes, leaving Leon to then prime and prepare the area before applying fresh coats of blue paint. Leon then turned to the engine. A complete strip-down saw internals - such as the flywheel, crankshaft and sump - removed and cleaned along with the carburettor and fuel tank. Taking stock, Leon ordered Honda genuine parts to replace those that could not be restored before reassembling the mower.

Speaking on completion of his work Leon said: “This was a fantastic summer project and I learned a lot about the workings of an engine and the process of dismantling and re-construction of a lawnmower, it was really enjoyable.”

To congratulate Leon on his impressive nut and bolt restoration, at such a young age, he was inducted and certified into the Honda Power Products, Master Technician ranks. This was enclosed in a letter of that Leon received along with a Honda-branded gift bundle that included a backpack, wireless headphones and a beanie hat.

Honda UK’s head of Power Products, Steve Morris, said, “It is a great project and example of a challenging spirit in strange times. Better yet, thanks to Leon’s natural mechanical talents, another Honda Lawnmower lives on. I’m in no doubt that Leon has a bright future ahead of him, hopefully one that involves Honda.”

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