Rural Lifestyle Dealer’s Dealer Business Trends & Outlook survey asked dealers to share their top concerns for 2020. The main causes of concern include finding employees, the economy, margins, healthcare costs and marketing as well as box store and in-line competition.

Finding Employees 

“Taxes, financing employees.” …  “Labor shortage.” … “Attracting younger employees. Competing with online companies.” … “Finding another qualified service technician. Probably have to attract him from another dealer.”

“Top concern is finding good employees. It seems that I am always hiring. Offering a competitive wage and health benefits help. We’re also trying to hold our margins and part of that is the cost of tariffs and how to absorb them. For example, Honda generators were hit hard. We’re keeping an eye open to replace STIHL as they have now gone over completely to box stores and are not the quality they used to be. Also, Honda has gone head first into box stores. Echo/Bear Cat has a great line of generators and I'll bring them in. They are the best distributor we have by far.”

“Handling the volume of work at a quality and level of customer service that is our legacy, but with a limited workforce. There are fewer children on farms now and those folks used to be our pipeline to good employees.” ... “We need to be knowledgeable for all our customer groups and have a work ethic that fits our own and customers' expectations. We continue to train all that we can and support 2- 3 apprentices as well as co-op students from our local high schools. But even at that, a reliable and capable tech takes 5-10 years to really know the variety of equipment that comes in our doors.”

“Keeping quality employees, parts people who are qualified. Support from manufacturers has been inconsistent.” … “Finding good employees and getting them trained properly. I am hiring an expert to assist.” … ““Economy, local drought conditions and finding qualified & experienced employees.”

“Personnel has been an ever-growing concern over the last several years. The strengthening job market and state-mandated $15/ hour minimum wage being phased in has made it very difficult to find and retain good talent. We've always offered a comprehensive benefits package, however, lately we have had no choice but to raise our starting pay grade for new hires. Employee retention remains an issue nonetheless.” …

“I employed a motorcycle tech for 5 years and he decided to go back to motorcycles, for less money, because of the prestige of working on them instead of power equipment. He told me stories of my customers that would bring their bikes in and get thousands of dollars’ worth of accessories and complain about me charging them $3 for a spark plug. My next concern is the internet!! Because everyone is looking for a DEAL. How do you compete? The only way I see it is SERVICE and maybe cut back on the number of off brands we work on.”

Economy & Politics

“If Democrats regain control of our government, I expect the economy to go into a recession or depression.”… “High taxes for small business.” … “Economy, political environment. Watch inventory levels and remain flexible.” … “Election, stay positive and roll! Riding the Trump train!!” … “Local economy, leadership of government” … “A Democrat that is elected president.” … “Commodity prices and global trade” … “Stability in trade deals and overall economy. There is no stable planned direction for how we are going to get this settled.”

“The stock market.” … “The fear of the unknown — Trump, China, the economy, the election. Just continue to fight for every deal.” … “Water storage and California government, can't really combat either.” … “Overall economic growth, housing, grain and cattle market” … “Political uncertainty and economic growth, interest rates, taxes, etc. can continue growth in the economy or stop it in a heartbeat. Also, the media changes business more than anything. If they keep saying we are going in a recession, people will stop spending. Customers tell me they quit watching the media and do what is best for them. We need positive media versus all the negativity people are tired of hearing doom and gloom every day.”

“Election year is a concern, may be some pushback” … “Farm economy coming back up. If farmers have money, they spend money.” … “The economy and weather. And neither of them can be predicted very well! We will watch them closely and be conservative with our inventory levels.” … “Poor economy due to elections. We plan to reduce inventory on wholegoods.” … “U.S./Canada relationship which affects the currency exchange and tariffs” … “Planning for slow steady growth. Being the go-to place to buy, service and to work.”

Costs & Margins

“Manufacturer relations. Poor leadership and decision-making from the manufacturer. Product quality issues. Manufacturers push for market share regardless of dealer margin.” …  “Tight cash flow at the moment (every winter) but fewer paychecks to write and more enthusiasm may help...” … “Shop expenses and combating “shade tree mechanics.” … “Lower wholegoods sales. Making sure to communicate with customers to identify possible needs.” … “Customers have too much credit card debt and low unemployment.” … “Manufacturer pressure for orders.” … “Labor costs required by law, have to raise prices. cost of regulations.”

“Many are going to online ordering for convenience, and prices. Parts are very easy to find online for nearly all products. The growing online price comparison and buying is the greater threat for rural dealers as the volume and margins creep lower.” … “Customer financing: Salespeople need to find the right tool or used equipment to fit their needs rather than new, due to pricing. Parts and service: Do a lot better at having customer's financing in place to prepare them for higher expenses. (They have held back on spending and equipment is going to have a larger amount of money invested to bring it back to good working order.” … “E-commerce parts sales of aftermarket parts that appear to be the same as OEM.”

“Financial stability for consumers. Already downsizing orders for next year as I have concerns.” … “Top concerns are manufacturers denying legitimate warranty claims, product quality and parts availability.” … “Used equipment sales — will just have to be diligent and have already begun being very aggressive in the used equipment market.”

“Healthcare costs and employee satisfaction.” … “Health insurance costs. Many of our people are getting older and these costs are getting out of hand.” … “Cost of healthcare. It’s 4 times higher than 3 years ago” … “Economy, healthcare and interest rates. Not a lot to do except to shop rates, and vendors for best deals.” ... “Weather. It was a bad year and half of the ground went unplanted.” … “The economy and weather and neither of them can be predicted very well! We will watch them closely and be conservative with our inventory levels.”

Marketing & Competition

“We moved outside of town instead of being in the city center.  We are afraid our parts sales will drop, so are advertising heavily.” …  “Dealers selling outside their area of responsibility.” … “Adjusting inventory levels to current market conditions.” … “Adjusting to our new location. We will make the move before the season starts and run promotions early to get customers informed of the move.” … “Same brand competition from other dealers.”

“More competition from box stores and less profit due to manufacturer pricing. Also, more competition from internet sales of parts via Amazon & EBay.” … “More community legislation on both noise and air pollution of fossil-fueled products ( bans on blowers and lawn equipment.” … “Road construction. We will market differently to try and keep us in people’s minds.”

“Concerned about year-over-year growth when business has been strong in recent years. Competition is strong and we are working hard to differentiate ourselves. Tractors are new to us and we must address these customers differently than our traditional construction/landscape customers. We are hiring a specialist who can focus on this market.” …“Brand purity, strive to improve market share” … “Getting our name and location known to a wider population. We are participating in trade fairs and local events and advertising in papers and radio media.” … “Adapt & spend money to compete through online sales.”

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