- April 27, 2017
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Branching Out: When You Should Ditch Your Beloved Brand for Shortline Equipment
In today’s landscape of seemingly infinite choice, we’ve all got our favourites: favourite coffee order, favourite TV show, favourite smartphone manufacturer, favourite child. It will come as no surprise then, that machinery operators often prefer to work with one brand of machinery over others; often due more to force of habit and adversity to change than loyalty. However, there is something to be said for moving away from blind loyalty and looking at shortline equipment as a solution for both dealers and machinery buyers.
What is shortline equipment?
An industry term, relating to equipment produced by smaller manufacturers, or on a made-to-order basis, shortline equipment is becoming a household term among the farming, manufacturing and construction industries. As technology such as CNC machining and 3D printing advances at a rapid rate, so too do the capabilities of small or niche manufacturers to create machinery which fills a gap in the market. Be it precision agriculture equipment or simply a more affordable range of z-turn mowers, shortline machinery is gaining momentum.
Predictably, there are pros and cons to stocking or purchasing shortline equipment,and the decision is multi-faceted. While opinions vary wildly as to the merits of shortline machinery, it is often a case of survival rather than choice. More often than not, termination of a long-held major manufacturer relationship is at the discretion of the manufacturer, and occurs when they decide to restrict their dealer network. Without a great deal of warning, your local farming machinery dealer may receive their very own ‘Dear John’ letter from their supplier, and be left scratching their heads and searching for alternative options. John Deere’s 2009 dealer network ‘trimming the fat’ exercise so flawlessly illustrates this point. This trend shows no signs of slowing down, and dealers are forced to imagine a possibility of life beyond their major supplier. Fortunately, shortline equipment represents a real alternative for dealers and buyers alike.
Benefits and shortfalls of shortline equipment
Relying on one brand to stock your showroom may simplify operations, however it can mean leaner margins and restricted opportunity to apply mark-ups. Major manufacturers often squeeze dealer margins in an effort to increase revenue, in which case dealers must rely on high volumes of sales to remain profitable. Shortline equipment offers dealers the opportunity to stock products with higher margins, but mostly importantly, range equipment which varies in the value-offering for customers.
Shortline equipment manufacturers looking to set themselves apart and carve a space in an already competitive marketplace may offer dealer and user incentives to tempt clientele. Extended warranties, a stronger service model, and bonus offerings all represent an opportunity for shortline manufacturers to attract attention.
The brand-purity encouraged (or even insisted upon) by major manufacturers not only restricts dealers in their solutions for buyers, and can also lead to a less than optimal experience for users in the market who are willing to shop around. A diverse product offering from dealers creates a one-stop-shop for end users, and can greatly improve the experience. There are a few caveats to this assertion, of course. It is integral to the success of a dealership stocking shortline equipment to have an extensive knowledge of the product, provide expert advice throughout the purchasing process, and to offer strong after-sales support to clients. After all, users gravitate towards major brands because of reputation for reliability and perceived value for money.
Another aspect for dealers to consider is minimum order quantities and branding/franchise guidelines attached to a major brand alliance. For smaller dealers, these costs can be prohibitive, and can result in a lack of liquid capital to work with, as their assets sit around in the form of heavy machinery rather than cash. Shortline manufacturers offer an enticing proposition to dealers, with smaller minimum order quantities and relaxed (if not non-existent) branding requirements.
For end users
Shortline equipment alternatives don’t stop at your skid steers, tractors or z-turn lawnmowers. As equipment needs expand and diversify in an ever-changing farming landscape, so too do shortline equipment offerings in the ‘specialised equipment’ space. Precision agriculture solutions are increasingly necessary for farmers, who wish to innovate their operations and increase efficiencies.
As Todd Kunau, of Kunau Implement reports, diversifying into specialised shortline equipment was a business decision which has paid dividends for them as a dealer.
“Brand purity falls short of true market penetration if we look honestly at all the business in our market. You need to put it into perspective how you’re choosing to approach your market and serve its needs” says Kunau.
Kunau’s company vision involves offering a range of equipment which adapts to the changing needs of their clientele, and in being specialists in their range. For buyers, this approach offers a unique opportunity to rely on one trusted dealer to present a range of solutions, and the support to back each of them up. Rather than wander from dealer to dealer, in the hopes of garnering truthful information about a range of product offerings, users can expect a range of suitable alternatives in a single dealership; and can purchase from someone who’s interest is in selling the most reliable machine for the task (not simply evangelising for a particular brand.)
That’s not to say, however, that mono-branded dealerships do not have their place. The old adage ‘a jack of all trades is a master of none’ may hold a grain of truth in this instance. Major brands will control the mark-ups (and therefore pricing) of their machines, and these prices are easily verified between dealerships. Shortline equipment prices, which may be stocked by only a minimal range of dealers are more difficult to ascertain. Furthermore, dealers specialising in a single brand are more likely to be well-versed in the servicing, warranty and specifications of that particular make.
For dealers, it is a matter of willingness to invest in retraining of staff, and in ability to market lesser-known brands to their client base. On the other end of the buying equation, users on the lookout for new equipment can only benefit from a wider product range and its inherent range of pricing, functionality and service offerings. While it’s true of the human race as a whole that we’re resistant to change, especially once we’ve settled in to a comfortable existence with a machinery brand, there is something to be said for branching out and exploring the options.