comes in the diversity of its product range. “One of the things we struggle with is when you look at the bench- marks for profitability on new equip- ment, you’ll see New Holland’s is from 3-11%. Those dealers look at sales per person and they’re selling $300,000 combines or $15 million worth of equip- ment with 20 people in the dealership. “That can’t be our business model, because we sell 600 lawn mowers at $2,000 to $5,000 a pop, and we have balers that are service hogs. The good news is we sell a lot of parts and ser- vice. Granted they’re not $10,000 repairs on a combine, but there’s lots of pieces on the shelves to support all of our rural customers.”
S&H has 10% of the market share
for Kioti tractors and for New Holland tractors under 100 horsepower its share is close to 20%, while hay tools are in the 30-40% range. “Lawn and garden is anybody’s guess, but I would think our market share is decent for a one-store complex,” says Eric Schnelle. “In the Rogersville market, there are so many people dividing up the pie that nobody gets a big percentage, but I would say with the lines that we carry, we get our fair share.”
The economy around Rogersville is diverse, and that’s helped support S&H’s product line. Between the cities of Joplin and Springfield, there are a number of large firms that provide off- farm income. The farms are a mix of hay, cattle and poultry operations. “When one sector might not be doing well, you have another sec- tor that may pick it up,” says Wayne Schnelle. “If it’s a bad season for grain over in Kansas, then everybody’s doing bad. You don’t have the off-the-farm income there to the extent we have in Rogersville, which really boosts our business. That gives us a greater opportunity for diversifying our market, allowing us to pull in customers who are looking to buy different kinds of equipment at different times.” In addition to putting goals in place, the Schnelles say they’ve made huge strides over the past year when it comes to expense control. “Monitoring overtime has probably been our big-
gest — because that’s about the only expense that has a lot of variation,” says Eric Schnelle. “Utilities and insurance are fairly set. Those costs you don’t swing a lot. When you’re looking at costs, you must monitor overtime and staffing needs.”
A “Car-Buying” Experience
If there’s one thing that differenti- ates the rural lifestyle customer from the farmer, it’s their frame of refer- ence. “That takes a little time to get beyond,” says Wiles. “Equipment deal- ers are often viewed as a car dealer- ship because that’s the consumer’s only frame of reference.”
When the ag guys come in, they know how farm equipment dealerships operate. When lawn mower customers come in, they think the salesperson will attempt to increase the price with all sorts of add-ons, like they do with rust- proofing in the automobile world. That’s not the approach S&H is inter- ested in taking. They’re not going for the high-pressue sale. “Once the con- sumer realizes we’re going to be fair and take care of them, they relax,” says Bergmann.
However, there are ways to work with that car dealership background, such as in stocking the yard. “Dad’s thing is you can’t sell from an empty basket. We’ve seen the direct correlation with compacts and skid steers,” says Eric. “If you’ve got a row of them, I’m talking 10-plus, people see you’re in the busi- ness of selling and servicing them. “On the other hand, if you’ve got only one machine on your lot, your sales are directly proportional. You wouldn’t drive past a Toyota dealership if it had only two cars sitting on the lot. Customers would think they must not sell cars because they’re not stocking them.” Eric Schnelle says the key is hav- ing a supplier that is able to keep your inventory up to where you look like you’re focused on selling the line, something that can be a challenge with today’s shorter terms.
When companies have a replenish- ment program or offer fast delivery from the factory, Eric says it’s a win-
Dealer Takeaways
• Some rural consumers love to farm, but know nothing about equipment. However, many of them have the money to spend on good machinery.
• Monitoring employee overtime is one of the most effective ways to control expenses.
• Clearly pricing equipment on the lot can help encourage the impulse buy.
win because he can keep the store fully stocked. “If you have to order twice a year, it’s going to be feast or famine and you won’t always look like you’re in the business. “Inventory control keeps me up at night. With this equipment and the rural consumer, we’re talking about impulse buys. You don’t think about all those attachments for compact tractors as being a impulse items, but the rural life- styler doesn’t want to place an order and then wait a week to take delivery. They want to use it this weekend. They’re shopping on Saturday morning so they can use it Sunday.”
RLD
A clean, organized showroom enhances the retail experience for rural lifestyle customers. Inside the dealership, S&H showcases the variety of equipment it sells. Scale models and tools are also available.
DEALERSHIP OF THE YEAR SPECIAL REPORT JUNE 2013 RURAL LIFESTYLE DEALER 11
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