As we work with dealers, one conversation that comes up often are the product lines that a dealer carries. For many dealers, the lines they carry can easily become their identity. They put so much effort into making sure that the brand is known and respected in the community. A struggle typically emerges when a dealer starts thinking about bringing on an additional line or removing a line. How do you know it’s the right move? How do you do it in a way that doesn’t jeopardize your customers experience with your dealership?
Seasonality of your line up
The first thing I would encourage you to look at is the seasonality of your current lineup. Typically, one of the reasons we would encourage a dealer to take on a new product line is to help with the seasonality that happens in the dealership. For example, we have many compact tractor dealers that have added a trailer line. Not only is this a product that they can sell in conjunction with their existing equipment, but it also has less seasonality in some areas of the country. Another complementary item with limited seasonality is generators. Many of our dealers have the technicians to support a line of generators in their business, and there is minimal seasonality to the item.
When thinking about your line up, you need to ask the question: “What lines do I have that are competing?” By this I mean, do you have two premium products that are competing for the same customer? The goal should be to have several lines at different price points. We know that the customer who buys a budget friendly piece of equipment will probably come back in a few years and want to upgrade. Do you have different options for customers, no matter what their budget might dictate? The other thing we often see when a dealer has competing lines is that one of the lines will get most of your attention. You will be more comfortable with a particular group of products, and you will be more inclined to move your customer towards those. Bringing on a line just so a competitor can’t carry it, is not a good reason to bring on a new line. Each line you bring on eats up not only your floor plan, but your focus as well.
Where Are You Taking Your Business/Who is Your Customer?
The third thing you should ask yourself is a bigger question: “Where are you taking your business and who will be your target customer as you move your business in that direction?” If your goal is to move your business where you are laser focused on the commercial customer, it won’t serve you in the long run to have several residential lines. However, if your goal is a focus on the Rural Lifestyle market, the makeup of your lines will be different again. We also have to keep in mind that if we do decide to get rid of a line, it is our responsibility to our customers who have bought from us that we have the parts on hand for those products for at least the next 24 months.
There is not a hard and fast rule for adding or removing a line from your dealership, however, when you look at all the products you carry in an objective manner and clarify what your goal is for the dealership over the next 10 years, your ability to make decisions regarding product lines will become easier.