Many experts see a lull ahead for the economy and dealer forecasts also show some moderation. It’s always a good time to watch expenses, but especially now with uncertainty ahead.
We asked dealers to share their thoughts to this question: What cost-cutting measures have you put in place recently or plan to implement this year?
“We are watching every expense going out. We’re calling our internet and phone companies asking for promos or to lower our bill; checking our insurance coverages and adjusting them for a better rate; checking workers compensation; checking employee hiring costs and wages; and finding ways to cut advertising.”
— Josh Ormsbee, Quality Truck Equipment, Bloomington, Ill.
“Our current business system is up for our 5-year contract renewal. The new contract is DOUBLE what we now pay and I am reviewing other providers. The switch may be difficult, but it’s better than getting stung by a current provider who claims to be your ‘partner.’”
— Kelly Emery, Emery Equipment, Baton Rouge, La.
"I think that there will be a lot of dealers looking to cut cost through the down time. However, I think expenses should have been managed well up to this point. So, my point is keep your expenses where they are at and work on increasing your sales volume to make your expenses become a smaller percentage of your total sales. If expenses were in line before any major effort, to cut them further will only likely lead to handicapping your dealership's ability to take care of the customer and operate at peak efficiency."
— Joe Lorge, Service Motor Co., Seymour, Wis.
As most dealers are doing, we are in the process of implementing measures to ensure better efficiency of labor use. These measures will include better training of personal and assigning the best person to each task beforehand. We are continuing to stress safety and clean work areas. We are also fully completing a parts order list to ensure we don’t miss something on our first order. We are placing more attention on special tools that manufacturers offer that employees are not expected to purchase. We are adding more efficient lighting. And, we are having meetings at the start of each day, outlining the day’s schedule.”
— Donald Ferguson, Construction Sales & Service, Crestview, Fla.
“I am always looking at things, for example, our local phone book. I know that not many people use it any longer, but I feel obligated to be listed in it. This morning, I cut the cost of our local phone book advertisement from $580 to $207.
“We’re looking at health insurance again. WOW, Obamacare sure has helped with that. The dealers’ association has a company that will take over your insurance account and they say that $1,000 a month is not out of the ordinary.”
— Jeff Suchomski, Suchomski Equipment, Pinckneyville, Ill.
“None. We see momentum and stronger interest in the products we represent. We are actually increasing our marketing, upgrading facilities and increasing inventory to meet market demand. I’ve never had so many items presold in our 67-year history…that I can remember. It’s an exciting time to be a Massey Ferguson and RhinoAg Dealer and we’re seeing growth every month. When you have the right products to sell, you don’t have the downturn others may be experiencing. Full steam ahead!
— Doug Vahrenberg, Vahrenberg Implement, Higginsville, Mo.
“There are many things you can do, but it is more important to look at what is the most blatant waste. Don't procrastinate, do it! One thing to do is get rid of the bottom feeders. They often are costing you more than wages. You need employees that want to grow and improve and some just never will.
“I know one company that has had a few extremely successful years and own the market share in most areas of the products they offer. Their idea is to spending below the co-op funds that is available from manufacturers to market their products. I know they will be successful in the long run of sales and making the economy slow down to their desired pace — it never has failed!”
— Art White, White’s Farm Supply, Waterville, N.Y.
“If you are looking for a ‘lull,’ then that is what you are going to get. I’m going full speed ahead. I made it through the last recession without bankruptcy, while GM and Chrysler did not. Who are the experts?”
— Mary Frankfurth, Foote Tractor, Howell, Mich.
“We are doing much more cost savings on the ag end of things. We actually anticipate a very strong year for residential and commercial sales, so we really have not pulled back much on that end of things.”
— Chris Eis, Eis Implement, Two Rivers, Wis.
“We have dropped one shortline that was costing us money; doing an extra push on moving aged inventory; changed our advertising to more digital; and we are looking at our old and obsolete parts stock.”
— Alex Lush, Connect Equipment, Rockwood, Ontario
“We are trying to reduce our health insurance costs with another plan, but beyond that, the last 16 years of Obama has already exhausted our bag of cost-cutting measures. There just isn’t much left that we can do. In fact, rather than duck and cover, we are going the other way with a new addition and a planned move to larger facilities (which we have owned for a few years) in hopes that this more aggressive approach will increase awareness and market share.”
— Roger Zerkle, ZDE LLC, Flat Rock, Ill.