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If you had to explain the value of two-step distribution, could you? Two-step distributors buy products from the manufacturers and then sell the product to independent dealer businesses. The dealers, in turn, sell it to the end user, thereby earning the two-step definition.
For those of us in the OPE industry, it is the way we do business so we do not think about the inherent value. It just is. Many times the simplest and easiest way to explain something is to just list some of the benefits for the dealers; explaining why they would want to use distributors, and then do the same thing for the manufacturers.
Starting The Process
Have you been debating whether or not to expand your client base to include municipal and government entities? While this may seem like the perfect way to expand your profits, pursuing this type of customer is not for every outdoor power equipment dealership. Many dealers do not have the staff, equipment, and time to successfully roll out a plan to follow up on this type of business. Like most business projects, it pays to start slow and ramp up if you start to see success. If your business can handle the new influx of work, then here are some tips to successfully engage potential municipal and government clients.
Dealers who have worked with manufacturers directly in the past may wonder how distributors fit into the equation and what value distributors can add to their retail business. When I speak with dealers who purchase and promote power equipment available through distribution, I hear a wide range of reasons why dealers get excited about working with a distributor. Here are the benefits I hear most frequently from OPE dealers.
Have you ever walked into a store and encountered a display that was almost empty? I have, and the thing that comes to mind is “this store doesn’t carry the merchandise I need.”
As a customer, that can be a very frustrating experience. After all, he or she took the time to drive all the way to the retail store only to be disappointed with the apparent lack of inventory available.
We cannot begin a conversation about a customer-centric business approach without first defining “customer centric.” To make it simple, it is putting the customer at the center of your business. Understanding what the customer needs and putting them first creates long lasting business value.
In order to develop a customer-first approach, get to know your customers and ask them these questions.
- What goals are they looking to achieve with a new piece of equipment?
- What challenges are they currently facing with their existing equipment?
- How are these challenges impeding their success?
- What would success look like to them?
According to the Bureau of Labor Statistics, the number of small business births is exceeding the exit rate of companies, or company closures—a positive trend we haven’t seen since 2007. With increasing competition, how can your small business stay ahead of the pack?
An increasing number of Lawn and Garden dealers are starting to realize the benefits of selling plows in addition to lawnmowers. They can satisfy more of their customers’ needs during the summer and winter months as their current landscape customers who are cutting grass from May to September are also the ones pushing snow from November to March. Servicing the needs of your customers year round will drive more business to the bottom line.
The question becomes where do you start?
More and more commercial landscapers have grown their companies into year-round businesses. They are not only cutting grass and maintaining lawns throughout the summer growing season, but many commercial landscapers have matured their business to include snow and ice removal throughout the winter months. Upwards of 60% of commercial landscapers are now also pushing snow. So, what does that mean to most Lawn and Garden shops throughout the Northeast? It means you are missing a great opportunity!
Chances are, you have been extremely successful in earning the commercial landscaper’s respect with his lawn equipment. That landscaper places his trust in you when it comes to purchasing and repairing his lawn equipment. Don’t you feel he would do the same when it came to purchasing his snow and ice removal equipment?
KPM's first guest blog post comes to us this week from Joe Miller, the Marketing Director at c-Systems Software, Inc. Joe is an outdoor power equipment industry leader in software, and works closely with KPM on a host of dealer-focused enhancements to c-Systems’ BMS. Click here to read more about Joe.
According to various industry surveys, at least 50 percent of outdoor power equipment dealers still do not utilize a computerized business management system (BMS). This is not to say that these same businesses do not have any type of computer system, as many dealers do have computers to access the Internet, conduct parts look-up, submit and receive email or generate office documents. These same surveys indicate that the most successful dealers (by dollars and size) utilize “industry-specific” BMS at their dealerships.
Does this mean you must have an industry-specific business management system to be successful in the outdoor power equipment industry? No, but it does indicate that a BMS could factor heavily into the successful operation of your business.
Here are some reasons why you should consider adding a computerized business management system to your business: