Another box store announced that it is selling tractors — this time, it’s Rural King. The company has started branding TYM tractors and began selling 10 models ranging from 19-55 horsepower at 7 pilot stores this spring, with plans to sell throughout its 100-store network.
According to the company: “Prices range from $8,299 for the 19HP RK19 Hydrostatic sub-compact to $26,799 for the 55HP, Turbo-Charged RK55 Hydrostatic utility tractor with full HVAC cab.”
The pilot stores will have a dedicated tractor center with trained service teams. The company also promises a complete stock of replacement parts from its Waverly, Ohio, assembly facility within 2 days, along with financing, King Kutter attachments, etc. From the company’s website, here’s their stance on price: “Because we are buying directly from the tractor manufacturer, we can pass our savings along to you. You’ll see that we offer more power for a lower price than any of the other brands in this class. Our pricing also includes freight and assembly, elements that add to the price at most tractor dealers.”
This isn’t Rural King’s first venture into tractors. They announced a partnership with Massey Ferguson in 2011, but I’m unsure how long that arrangement lasted. RLD's former editor wrote about his experience visiting a Rural King store that sold Massey tractors. Maybe you can share insights on that partnership. Here are some comments from dealers on the current Rural King tractor announcement.
One dealer shares this:
“I understand the strategy as the Rural King, TSC and Farm & Fleets look to differentiate themselves from each other by expanding their product lines. However, these companies are essentially mass retailers and are not constructed to be in the service business. On the other hand, dealers are essentially service operations where 90% of their staff are located with a retail component. Especially in the lower end of the lawn & garden equipment, margins are so compressed that the only reason to continue to sell is the residual parts and service business. The mass merchant business strategy is simply not built to provide service after the sale… I give it 24 months before the venture collapses unless a major shift in RK's business model is made.”
And another dealer’s perspective:
“These stores are not much different from a Walmart or other box store except for they are focused on the agricultural market. Is there a point at which they will start selling trucks and other higher dollar products? I don't see them being able to provide much more than a low price point to bring in customers.
How many customers really want to make a higher dollar purchase like this from a box store? My personal opinion is that they will only appeal to the 1 in 6 shoppers that is only focused on price. Then, if this customer group has dissatisfaction, their base will be eroded. However, I think they stand a much better chance of success in markets where the current tractor dealer base has failed to provide the customer experience that is a critical component to overall success.”
There’s the key: Succeeding because dealers fail to provide what customers need. You can’t blame mass retailers and manufacturers for taking advantage of a strong market. Some rural equipment manufacturers swear their allegiance to the independent dealer, while others have a history of selling through mass channels.
Is it too far-fetched to think, then, that Walmart could someday offer at least subcompact tractors? On a seasonal basis, maybe? If rural lifestylers are buying pro-sumer zero-turn mowers, they’ll be ready to take the next step with property maintenance and a box store may be their first stop.
Rural King didn’t want to comment, but did share that local dealers have been visiting their stores and some are up-front that they are dealers. Others are a bit more clandestine and are leaving their business cards in the cabs of tractors. “Guerilla marketing” can be a good tactic, but not these underhanded approaches. They make the dealers look desperate or worse.
Rural King may have it figured out, although I suspect they will have the same troubles you do in finding qualified service techs. Regardless of whether they are a long-term player or not, there will always be another big box competitor.
So, back to the original question. Anyone, including the Goliath Walmart can sell tractors. Make sure you know what your customers need beyond steel and tires and combine that with what you have that your competitors don’t — be it your reputation, your service philosophy, your atmosphere, your experts or any number of things. You may lose a customer here and there, but if “you do you” right, they’ll be back.