Agricultural equipment dealers: what they need from a manufacturer to push your brand

A maker's first question to a dealer is usually "what margin do you want?" That is the wrong start. A number comes back, the maker agrees or haggles. Nothing changes in the shop. A better way is to sit with one dealer and ask the questions below. What follows is an invented conversation between a groundnut digger maker and a dealer in Junagadh, with the maker's note after each answer. The words are made up, but the worries are ones farm machinery dealers raise.

"Why do you keep one digger in the corner and push the other brand?"

The dealer: "When the digging season starts, a farmer wants the blade the same week. If a share breaks and the part is in Rajkot, he loses days while his crop sits in wet ground. Then he blames me."

Maker's note: this is a spares answer, not a margin answer. A dealer recommends the machine that can be mended fast. Ask which three parts sell most and whether they are held.

"What do you need on the shelf before you will stock more?"

"Blades, bushes, bolts and the chain. If I hold ten of each at a price I can mark up, I can mend on the spot. Do not send me a catalogue of two hundred parts."

Maker's note: list only the fast-moving parts, price them so the dealer makes a living, and put the list on one sheet. Agree how the first lot is paid for, and write that down too.

"How do I know I am being paid the same as the other dealer?"

"Show me the sum. Price I pay you, price the farmer pays, what I keep. If there is a year-end bonus, tell me how it is worked out, in plain words. I have been told 'good incentive' before and received nothing I could count."

Maker's note: one sheet, one line per machine, no mystery. If you cannot explain an incentive in two sentences, it is too complicated. Our post on creating dealer incentives without damaging margins goes into the design.

"Who comes when it breaks on a Sunday?"

"The farmer calls me, not you. If I cannot answer, I have a problem. Give me one number to ring, and tell me honestly how long you take."

Maker's note: promise only what you can keep. If a repair visit takes a day or more, say so and tell the dealer what can be done meanwhile. A mechanic trained on your machine, in the dealer's own shop, is worth more than a polite promise.

"Will you send a demo before the digging starts?"

"Farmers believe what they see in the next field. Send a machine and an operator for one afternoon, then tell me which village. I will bring the farmers."

Maker's note: a demonstration helps most when the dealer picks the village and invites the people, and when it falls ahead of the season, not in the middle.

"What about the farmer who wants credit till the crop is sold?"

"I carry the farmer already. If you also want payment in thirty days, I will go to the maker who gives me time."

Maker's note: this is where a vague answer costs most. Decide your limit, your period and your rule for delay before the first order, not after the first default. State them on paper, and let your own lawyer read the paper, since terms differ by state and by how the dealership is set up.

"And if you open another dealer two villages from me?"

"Then I will stop selling your machine. I paid for the demo and the farmers' trust. Someone down the road collects the order."

Maker's note: territory sits under every answer above, and it also answers how many dealers a district needs. Two active dealers with clear areas do more than five who each keep one machine in a corner, and a third is worth adding only when the first two are ordering. Write each dealer's area, and agree what happens to an enquiry that comes from outside it. Our post on what to put in a dealer agreement covers the points in order.

What the maker does with the answers

Put the answers in a table. It may show one gap that the others hang from.

Fill the second column after three dealer conversations, not one. Write the dealer's own words, not your reading of them, because a paraphrase loses the real cause. A dealer cross about a late consignment can make a small problem sound large. Where two or more say the same thing, fix it first.

When a dealer is not the answer

Sales through a dealer stall if the machine needs trained fitting and the dealer has nobody for it. They stall too when your volume in a district cannot give the dealer a living. In those cases, should a manufacturer sell through dealers or directly is the question to settle first.

Take the questions to your best dealer

Ask the questions above over a cup of tea and write the dealer's words down as they are said. Fix the spares first, because a late part is the loss a dealer notices first. In an invented follow-up, the Junagadh maker stocked the fast-moving parts but could not fix the margin sheet in time, and the dealer still kept the other brand in front. The trade is on our agricultural equipment sales and marketing page, and the setting-up work sits under dealer and distributor programme. If you want help turning the answers into a dealer programme, tell us what you need.