In My Opinion: What are you doing differently compared to 10 years ago?

By John D. Hedges

I recently enjoyed a great conversation with Pat, a dealer friend of mine from St. Paul, Minn. We talked about how different our current roles are compared to a decade ago. He said that it must be hard being a distributor today. It is, but so is being a dealer. Let’s look at both.

Let’s start with the role of the dealer today versus 10 years ago. Do you realize that 10 years ago you could still adjust a carburetor (so could the consumer), and ethanol-blended fuels weren’t a concern. Non-permeating hoses were not even considered. There was little, if any, talk of carbon footprints, and CARB (California Air Resources Board) was just gaining ground. Mass merchants exclusively used independent dealers to service their products. When someone needed something, they came to your store and only yours. Things were good.

Remember the competition you had? Most of them are gone by now or have been absorbed into another dealership, maybe yours.

Fast forward to 2013. CARB and EPA (Environmental Protection Agency) are among the things making the small-engine business difficult. The unknown impact of Obamacare on small business is scary. Communications come in the form of smart phones, faxes, e-mails, and UPS or FedEx overnight mail. Your salesperson has too many accounts to see you more than two times a year, many times less. Your new competition is a thing called the Internet, and the consumer is being educated on how to service their own product by YouTube videos. Techs are harder to find because our industry has done a weak job in finding the glamour of being a “small-engine doctor.” The bright and talented begin working on new fangled automobiles. Your service competitors are now large groups, and the masses demand that the manufacturer uses them. Your parts competitor may be the entire Internet.

How can you, the independent lawn and garden dealer, survive another 10 years?

Now let’s look at your supplier, the distributor. Using the same 10-year history, the role of a distributor has also changed significantly. Ten years ago, many of us had partners called SDs (service distributors), which were basically regional warehouses to help get products and parts to you faster. Most marketing was done by the factories; spring orders and other buying programs got 60-percent participation from the dealer base; and selling to anyone other than a dealer was questioned. A normal distributor had three to four lines, and you bought from several. Our industry magazines were at least 50 pages, and no one dreamed of an online version of them.

How can we, the distributor, survive another 10 years?

I believe there is hope around the corner. Manufacturers in our industry are smart, really smart. They’ve been able to keep up with the strict demands placed on them by EPA and CARB. They have withstood the cost of higher labor and continue to make products that are tougher than ever before. Costs are held to realistic increases, and they have hired quality people to take them to the next level. The next level? Survival of our industry.

Ten years ago, a Japanese-made product was accepted as a quality item, but it wasn’t always that way. Today, there is a difference between a Chinese engine and an engine made in China. Our leading engine manufacturers have their own Chinese plants making their own engines and a service network made up of dealers like you. Chinese products, however, are not yet considered the same. But if history has a way of repeating itself, that too will change. Some manufacturers in our industry are predicting they might once again be able to manufacture some items here in the U.S. They better. If they don’t, Chinese companies will buy a factory here and do what we say that we can’t do. They will begin shipping their components here, manufacture wholegoods here, and sell here. It’s about to happen in Beatrice, Neb.

I could go on forever, but I won’t. Here are some suggestions that will help you survive another 10 years:

1) Weak dealers and weak distributors will be gobbled up by the strong. Don’t let that happen to you by being complacent and lazy with your business. If you stay up on the trends, you might be the dealer doing the gobbling! Be a trendsetter by trying new and creative ways to advertise your services.

2) The Internet is NOT the enemy; it is a way to survive. (If you aren’t selling online, you better start now.)

3) Engines produced today are not your grandpa’s engines. They are highly sophisticated, and those that are trained to repair them could be the only repair shop in town. Stay current on engine service updates provided by your distributors. They may seem boring today, but you will be ahead of the game if you remain current.

4) I believe the mass merchants will return to the independent dealer network for repairs. If you were eliminated by one of the national service providers, get over it. When your distributor or manufacturer comes back, greet them with open arms. If you don’t, you may not be making a wise business decision.

5) Your distributor needs to have a lot of inventory in stock. If they don’t, consider changing to one that does. As margins decrease, you want to have a distributor partner that you can rely on when you need something. Stocking programs might be a thing of the past, but they DO add value to your bottom line. A good distributor has the parts you need, when you need them, so there may be no need for you to stock certain items. Consider this: Let’s say you have a good customer (maybe a commercial cutter) who gets stuck in traffic today and arrives at 4 p.m. to order a part. Can you trust your supplier to make sure that part arrives the next day? Don’t fail because of someone else. A commercial cutter, as you know, cannot afford to be down.

6) Your customers WILL eventually buy online if they’re not already. Make sure they know you have a website that will allow them to place an order for what they need, pay for it online, and then select to either pick it up or have it delivered. Plaster your website on all customer correspondence. It’s really that simple to keep your customers buying from you instead of someone 1,000 miles away named Jim or Jack.

7) Go ahead: Have a $99 trimmer in stock when a customer comes looking for one. If you don’t have what they need, you will force them to go to another dealer, mass merchant or the Internet. Once you lose them, it’s hard to get them back. (Thank Bob Clements for that idea.)

8) If you are in the inner city, consider lithium-powered products, reel mowers, or electric-corded products. Those customers have smaller yards, and many people living in the “trendy” areas are against gas-powered products. They need something environmentally friendly that they can use to maintain their yard. If they come looking, don’t disappoint them.

9) Don’t accuse others of selling to “your customers.” As they say, that dog don’t hunt anymore. With the Internet always “open for business,” you cannot wait for customers to come to you. You have to go to them. You also need to offer your better customers a discount-off list. If you don’t, you will lose them. Instead of spending a lot of time blaming others for taking away your business, go get it. Use creative ways to grab their attention. Host a pizza lunch round-table discussion once a month with your commercial cutters. The cost of a pizza will not break you, and the discussions will be priceless. Invite different cutters each month or keep the same cutters. Change it up by inviting one of your suppliers to host the event. Doing this will keep “your customers” coming back.” (The guest supplier can buy the pizza too!)

Good luck, and feel free to write me with your thoughts at jhedges@cpdonline.com.

 John D. Hedges is the director of sales and marketing at Central Power Distributors, Inc. (CPD) in Anoka, Minn.