New Tech Old Planters: The Birth of a New Industry Trend

The Planter Market has been a rollercoaster since 2014. Four years ago, if you had a planter larger than a single row you had a hard time getting rid of it. Like other equipment segments, planters were highly produced and the market was flush with inventory. Used planters had piled up on Dealer’s Lots and the Auction Market was the new place to buy Used Planters. Week after week auctions bill where loaded with planters. They were everywhere! Of all the equipment in the last 5 years, planters took the worst beating. New planter sales fell from Highs of 50-60 to even 100 per year to lows in the single digits. Planters were being rebuilt instead of trading for new. High speed technology was introduced from manufactures but “Bolt On” equipment had been available for several years at this point. Older planters started getting a face lift with new high speed technology. 

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Casey Seymour
Has the Auction Market Become the New Retail Buying Market or is Supply and Demand Driving Pricing at Retirement and On Farm Auctions?

It is not a shock to anyone when I say the last five year auction activity has greatly increased. At the end of 2014, Used Equipment Inventories where at all-time highs. The Auction Market became a dumping ground for all kinds of equipment. Late model, high hour, and everything in between. There was nothing sacred. The use of the auction market is still strong today with Dealership Liquidations, Farm Retirement Sales, and Farm Liquidation. With large amounts of equipment selling on the open market; has the buyer become more retail minded at the auction? In this article, I will give some examples supporting auction activity and Retail Pricing at Dealerships. 

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2013: A Paradigm Shift in the Ag Equipment Business

In 2013, the signs of a looming collapse were becoming clear. In Farm Equipment Magazine, Dr. Jim Weber had been writing a series title, “The Business of Selling.” An article from the series “Gathering Storm Clouds” was posted July of 2013.  I am paraphrasing but, the article, Dr. Weber talks about low return on sales, dealerships dependence on volume and market share payments. Because of the low returns, dealerships should have been failing in droves. Because of record high commodity prices, record low interest rates, and record on farm income dealerships were able to spike margins with New and Used Whole Goods. 

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Where does Inventory Management Start and Why Does it Matter?

Inventory Management has become extremely important for larger dealer groups with tens of millions in inventory and millions at risk.  Auctions have grown because it’s a controlled method to reduce inventory levels and risk.  Because of the growth in auctions, the amount of inventory being sold at auctions has caused equipment values to decline.  Additionally, consumer confidence and the decline in the Ag Economy have put pressure negatively on auction values as well.  On top of this, we still have pressure to meet manufactures demands and sell new equipment… So you have to ask yourself, are you setting yourself up to repeat the not so distant past?

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Inventory Issues: It’s More Than Just Having Too Much.

If you ask anyone in the Equipment Business if they have any inventory issues most of the time the conversation will revolve around how they have too much inventory. The conversation will lead into the models or category causing the biggest problem and “If I could just get rid of X number of units how wonderful life would be.” Very rarely does the conversation start with “I have a big inventory problem; I don’t have enough!” In this article, I am going to talk about what happens if your inventory is to low and holes in product mix won’t allow for the washout cycle to be complete. Lack of inventory will have the same effects on Used Equipment Matrixes and Ratios as having too much. These three examples outline why.

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Understanding Used Product Segment and Turn

In my last column, I talked about the importance of understanding the Washout Cycle and how understanding time to hold and number of units to sell through, effect your future inventory. In this edition, I am going to write about the importance of segment turn and how it effects overall Used Equipment Turn. To the people reading this article it is no surprise the bulk of the Dealership’s Cash is tied up in Used Equipment. The risk of every dealership is in used equipment. So much of the Dealership’s profitability is directly tied to its ability to generate cash by selling used equipment. The faster your dealership turns used equipment the more available cash there is to move to the next machine or project. Understanding how each inventory segment effects your overall turn will greatly increase your ability to achieve your turn goals.

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