from both Mahindra and Branson Tractors. But what the dealer is most proud of after six years of growth is that he remains debt free.
As the West Coast distributor for Mahindra, Dave’s Tractor maintains a “huge” inventory of equipment.
connect loose. He insisted that this wasn’t the case and was convinced that the bucket was broken.
“So, I called one of my mechanics and sent him up there on a Saturday. He drove all the way up, connected the quick-connect and drove home. “The customer called the following Monday, saying, ‘You guys are the best. I’m telling my friends how wonderful you are.’ I think as a token of his appre- ciation he also sent someone to buy a grill guard and some other things.” Siemens says that it would have been easy not to have reacted that quickly. “We don’t get paid under warranty for things like this and I didn’t charge him, but now I’ve got a customer for life. It cost me $100 dollars for my guy’s time.”
Not Everything Works As he’s gone through his “dealer” learning curve, Siemens says he’s tried a number of things to grow the busi- ness. Some have worked out well, while others haven’t.
Convinced that his customers would only want the highest quality equipment, Siemens began by only car- rying the best. “We said we’re only going to sell top-quality, top-of-the-line implements. If customers want to buy a cheap implement, they can buy it
Participate in the 2008 Rural Lifestyle Dealer of the Year Program!
For information on nominating a dealer, contact Lynn Woolf,
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But as the price on top-of-the-line mowers, blades and scrapers escalat- ed, he was having difficulty competing. This summer, the dealership added an economy line of implements. “It’s something I resisted for a while, but we’ve added the Pegasus line and it’s given us an inexpensive line of imple- ments to compete against Tractor Supply and that sort of a retailer. “It makes sense to use a high-quality implement on a high-horsepower, high- use type tractor,” says Siemens. “But on a 25-hp tractor that’s going to grade a driveway only twice a month, we found we had a hard-time selling that quality against price. We still offer the more expensive brands, but we have an option now, and when you have an option, you can sell both. Customers like choice.” Another mistake Siemens won’t make again is buying a few low-cost Chinese-made tractors. “I saw deal- ers selling so many of them, I thought maybe I was missing something. This was a mistake. I got them here and realized they were of poor quality.” What’s happened, he says, is cus- tomers look at them and end up buying another tractor. He’s decided to keep them on the lot so people can look and compare. His biggest mistake— “I should have only bought one.”
Still Debt Free
Besides receiving 2007 Rural Lifestyle Dealer award and Farm Equipment’s 2006 Best-in-Class Dealer of the Year award, Dave’s Tractor has also earned outstanding dealer awards
Since opening the store, Siemens purchased an additional 7.5 acres of land and built — and paid for — a new 6,000 square-foot facility with offices and full service shop. “Coming into this, we set money aside and made sure we had zero debt. Now, we’re getting calls from people who bought a couple of years ago who are saying, ‘Things are getting kind of slow and I’m selling my tractor and trailer,’ and we’re able to buy some good used tractors.
“We take trades whenever we can, which sets us apart from some dealers because they’re so cash strapped they can’t do it. We encourage trade-ins and set some capital aside so that we don’t lose a good deal.”
“We’re debt free and it feels good. This past June and July were terribly slow. We almost got completely caught up for the first time ever in getting our trade-ins ready for resale. I was getting concerned. Then in August things took off. It just seems to be very important not to be in the hole.”
Still Learning
Siemens still has much to learn to maintain his early success. “In every issue of Farm Equipment, I read com- ments about keeping inventory turning and about making money in service and parts. We’ve really focused on turning our inventory, and for the first time, we’re seeing service and parts as a profit center as we have a tractors out there that are getting to be a few years old,” he says. Despite the recent slowdown, Siemens still sees plenty of opportu- nity down the road. “I hear some guys grumble because farms are being bought up around here and broken down into smaller parcels. When you break a 640-acre section into 5-acre plots, what I see is 128 potential customers. If I only get 20% of those, it’s still a lot of tractors. Not that I like to see a big farm broken up into 5 acre lots, but somebody’s got to win.” RLD
26 RURAL LIFESTYLE DEALER DEALERSHIP OF THE YEAR SPECIAL REPORT JUNE 2013
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