The forecast for 2019 remains solid for the rural equipment market according to Rural Lifestyle Dealer’s 2019 Dealer Business Trends & Outlook Report. The 2019 report marks the 11th consecutive edition, the only one of its kind to analyze the growing rural lifestyle niche. The survey found that, compared with their production ag counterparts, rural equipment dealers are more optimistic, even when considering an improving ag economy.
Making it easy to do business is always another influencer, with financing being an important part of that. More than 72% of dealers say customers seek financing from them at least half of the time, close to what dealers said in last year’s report.
Rural Lifestyle Dealer looked at how technology, such as artificial intelligence, blockchain and smart contracts, will drive changes in financing in an interview with two experts from Capgemini. One of the experts, Jeff Boots, says, “I think that within the next 1-2 years, people in this industry will be employing artificial intelligence and then they will start to look at smart contract and blockchain capabilities. Within 5 years, you will see people in this space utilizing one, two, perhaps all three of these technologies to service a customer base that is increasingly technology savvy and looking for optionality in their financing programs.”
Tune in to this podcast to learn more, www.RuralLifestyleDealer.com/SmartFinancingPodcast.
Offering rental is another way dealers are providing equipment — in the arrangement that certain customers prefer. About 45% of dealers say they offer rental equipment, up from 40% in last year’s survey. The top 5 equipment categories rented are skid steer loaders, tractors less than 40 horsepower, tractors 40-100 horsepower, backhoes and front-end loaders. (See “Product Categories Rented”.)
Larry Kaye, CEO of Script Intl., a contractor consulting company, says dealers need to pay closer attention to what rental can do for their profitability. “In the traditional business model of sales, parts and service, the two that make the most margin are flat or in decline. That means a dealer has to make up 70% of his business through sales, the area with the lowest margin. Rental, which offers gross profit margins of 30% or more can be the solution,” Kaye says. Go here to read more on the topic, www.RuralLifestyleDealer.com/RentalGrowsRevenues.
There are many opportunities for dealers to have another solid year. However, you also face several recurring issues including finding employees, low sales margins and healthcare programs and costs. Those issues ranked as the top 3 for issues dealers are most concerned about. (See the table “Rural Lifestyle Dealers’ Most Pressing Concerns for 2019”.)
Finding good employees has been at the top of the list for several years. Last year, healthcare programs and costs ranked second, while low sales margins ranked third.
Sara Hey, vice president of business development and operations for Bob Clements Intl., offers ways you can enhance job listings through search engine optimization. Go here to view the discussion, www.RuralLifestyleDealer.com/FindingHiringEmployees.