A recent visit to Stotz Equipment, a 23-store dealer group in 8 western states, turned up several intriguing and non-traditional revenue streams for a dealer. Since my flight home, I’ve been considering just how critical the way equipment dealers view themselves can be. On the one hand, a defined focus keeps a business firmly grounded to its core. Yet in a changing world, it can also keep it from pursuing opportunities that may be ripe for the taking.
How do you define your business as a dealer? Are you an iron-peddler and fixer and that’s it? Or can you say you’ll move to whatever, wherever and whenever your farm customer most sorely needs your help — and is willing to pay for that service?
The latter is what I found at Stotz Equipment. I’ll share one with you here — roadside mowing. Keep an eye on Farm Equipment for some of the others.
For the last 8 years, the dealership contracted with the Utah Department of Transportation (DOT) to provide 40-plus tractors for roadside mowing each summer. After 4 months of use, explains Jason Behrend, manager of the firm’s new business development activities, the dealership re-purchases those tractors and retails them. This grew to a $5 million business for the dealership. But every bit as important as the dollars and market share was the fact that it provided farm customers with high-spec tractors at a price they wouldn’t have otherwise been able to afford.
When word got out that the DOT might let the equipment contract run out and privatize mowing, the dealership was willing to look outside of the box to protect its contract, the aftermarket business and those late-model tractors so highly sought by farm customers. So the dealership formed a brand new division, Stotz Mowing, and picked up a contract last year for 620 miles of roadside mowing. This year, the dealership won a 3-year contract for 5,000 state highway miles.
It’s a highly profitable business, says Behrend, that becomes more profitable with each incremental efficiency gain. He says the contract is also a win for the state (Stotz won the bidding process) and area farmers (who get access to high-spec used tractors). And because it was previously state-run, Stotz did not compete with customers in getting it off the ground.
Had the dealership viewed itself only through a lens of an iron peddler, this opportunity would surely have eluded it. Instead, we’re seeing a dealership living by a mantra of “making the customer’s life easier.” From what I know of this group, Stotz appears to take a look — and at least put pencil to paper — at customers’ points-of-pain that they can profitably serve.
The message here is less about mowing than it is in seeing opportunity and having the courage to pursue something beyond traditional boundaries. You are being presented with “new frontiers” with precision ag, data management, irrigation services and other voids that keep your farm customers up at night. Job one is simply being close enough to the action to hear those opportunities knocking.
Jumping into new non-core ventures is not a decision to take lightly. It’s requires talent, capacity and commitment. And you can’t lose sight that anything less than an A+ performance can soil your entire business’ reputation.
We’d like to hear from you on the thought processes that help you identify where it does, and does not, make sense for an equipment dealer to blaze new trails. Tell us what you think in the comments field below.