Many decades ago, I sat and watched my grandad cut out potato (potatoe if you are a Dan Quayle fan) eyes for the making of potato slips for our clan’s garden needs. Each year at harvest, we would first go to the “potato house” and clean out at least 15 bushels of old crop potatoes and throw them away to make room for the new crop. 

I hated to dig the spuds, thus my motivation to ask Pap: “Why don't we just plant half what we normally do so we will not have this issue?" His reply was: "Nope." He never looked up and continued with: "…might be another depression" and just kept on peeling. 

He was feeling the scar that was left from a hellish chapter of his life. Those of us who lived through the 1980s feel the same scar as we hear talking heads on TV conjuring up what might or might not be a recession in our future. 

Earlier this year the “Retail Doc" told dealers to clean up our act, lean out our business and make sure our line of credit and floor plan availabilities were current and in order.  This sounded kind of dire at the time, but now as our inventory starts to build, we are thinking this was some good advice. If history serves as a teacher, inventory of what is not selling will multiply. The pipeline will work again, the pre-sells will be filled and then we will come to work one day and find it is once again a "buyers' market."

The slowdown in sales will trigger a manufacturer response of “we need to be selling our superior features, benefits and dealer support and not be selling on price.” Then either a sales manager or product manager will get a report that shows a market share loss or big volume drop. Next the report will hit a bean counter's desk, and they will castigate others up and down the line, and the result will be new sales incentive programs of either longer interest waivers, cash discounts or other incentives to revive sales or at least stop the bleeding. No one wants to go to a board meeting with a less than stellar report (the sound of heads rolling is a motivation factor above all else). 

There is another ingredient. All those upstream from the dealer level get their pay based on sales numbers, market share and percentage increases. When sales turn negative, the stuff hits the fan and all the mommas ain't happy no more. The emails roll upstream, downstream and one of the manufacturers recants and issues a larger increase in discount programs that triggers competition from all the others in order to spur sales and win the prize of king of sales.

In our 50-year participation in these cycle processes, we also hear from the powers that be that "It will be different this time." But it never is. Cycles are a fact of life and people are people — this never changes. Each cycle has a more detailed, faster analysis of the process but again, as in the old saying, “stuff happens.” 

One cannot and had better not plan for failure and lower sales, but we should go to battle in the marketplace with all the tools we can carry. The most important weapons are a sniper scope for sales trends, a wide-angle lens for our inventory and its pipeline, plus an open line to our suppliers as to market conditions. Many companies today have some highly educated, tech-savvy people in charge of forecasting and all the things that go with it. But folks, we in the trenches know what is really happening before they do. 

Till next time, wishing you miles of smiles and profits. Sell your socks off!

Told from the perspective of an in-the-trenches owner/operator — Tim Brannon of B&G Equipment, Paris, Tenn. —  Equipment Dealer Tips, Tales & Takeaways shares knowledge, experiences and tips/lessons with fellow rural equipment dealerships throughout North America. Covering all aspects required of an equipment dealership general manager, Brannon will inform, entertain and provide a teachable moment for current — and future — leaders within equipment dealerships.



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