Myself and Service Dealer's owner, Duncan Murray-Clarke, caught up with our great friend and columnist for the magazine, Sara Hey this week.

Based in Kansas City, Sara is president of Bob Clements International, the dealer training specialists. As such, she has her finger on the pulse of the U.S specialist dealer network - so it's always fascinating to join her on a Zoom every once in a while, to hear her take on the current situation over there.

With all that's going on in the world right now and especially with the heightened state of US politics, Sara had some interesting observations - especially about the current state of the American dealer / manufacturer relationship.

Sara told us it had been an interesting past few months. She felt that the dynamic between the two parties could best be described as 'tense'. To a level that she felt she had not really seen before in all her years working in the industry.

One area of contention at the moment, is the impact of import tariffs. These are really starting to be felt in the US market apparently, and the question between dealers and manufactures is who is going to absorb the brunt of these additional costs? Neither being especially happy about it.

So that's one area causing some friction. The other is to do with inventory.

Now the U.S dealers have a different system of acquiring stock from their supplying manufacturers. Rather than buying kit off them in advance in a 'winter stocking style' like our UK dealers do, they use a process called floor planning.

Essentially this is a 'pay-as-you-sell' financing model. ChatGPT helpfully summarised the system for me as " . .a revolving line of credit that allows dealers to stock their showrooms without paying for the equipment up-front. A lender pays the manufacturer for the inventory, and the dealer repays the loan only once a unit is sold to a customer." My understanding is the kit is financed for a certain period agreed with a supplier, before interest is paid on unsold items.

So quite different to what we have here. Although, where similarities can occur with the experiences of our UK dealer readers, is that some U.S manufacturer suppliers are placing demands on their dealers to take more and more of their stock. And that's precisely where this current tension is mostly coming from.

Sara told us she wrote a blog on the subject recently, one that she had received more feedback on - from both dealers and manufacturers - than she'd ever had for anything she'd published previously. Entitled Are Dealers and Manufacturers Playing Chicken With Inventory? I'd recommend having a read through it today.

In the piece, Sara argues that many U.S. dealers and manufacturers are currently engaged in what she calls a game of “inventory chicken”. Dealers are delaying orders in the hope that better incentives will appear, while manufacturers are holding firm, believing dealers will eventually need the stock. According to Sara, the danger is that both sides end up increasing uncertainty and eroding trust. Her advice is that inventory strategies should be based on customer demand and clear planning, not on waiting for the perfect programme to arrive.

It's a thought provoking piece from Sara and unsurprising that it generated so much discussion. Like I say, even though their industry specifics are different, I'm sure that what she says will resonate with our readers.

So, my question today for our UK and Ireland dealers is, even though their process of stocking is not the same as ours, does any of what Sara has to say about a fraught relationship with suppliers sound familiar to you right now?

Are you experiencing similar conversations with suppliers around stock levels? Is there a tension or are dealer–manufacturer relationships here currently in a much healthier place?

Please feel free to share your thoughts with our community below, or if you'd rather, drop me a line in confidence.