Executive Editor Kim Schmidt and I hit the road this week for a couple of dealer visits in Indiana. One of them was our first visit to AgRevolution’s newest store in Vincennes, Ind., which opened in the summer of 2022. For those unfamiliar, AgRevolution is the moniker of the 7 company stores owned and operated by AGCO since the fall of 2020.
I admit that in nearly 20 years of covering the business and as a business owner myself, there’s a heaping helping of skepticism on the subject of the viability of the company store. I’ve heard the stories of the failures of the past, including how factory people didn’t get what “real” farm customer service meant (and what would drive farmers to the competition) and what happened when no real entrepreneur and/or fully deputized decision maker was in the building. Someone had to bring the ship in – come hell or high water – and company stores were ripe for complacency and lack of expense controls, I’ve been told.
Those sharing that “conventional wisdom” would often say so in a way that almost “invited” the company store competition; that an independently owned dealer would outperform the OEM store every time and resulted in the major-line exiting with its tail between its legs, just like it always has.
So I was eager to see AGCO’s company stores for myself. I’ve got to say that when we arrived at the Elkhorn Road store in Vincennes that late afternoon we were a little underwhelmed. The building had modern curb appeal (but not a great location) and was smaller than anticipated, though it had a handful of new machines, including Fendt tractors, a Gleaner combine and a few shortline products, most notably a couple of Brandt tillage tools.
But even though the place very much resembled the startup that it is, the two staffers we met with (several others were in the field) may have chipped away at my company store biases.
Job titles notwithstanding, Larissa Rinsch is the go-to of the store and is proud of that self-appointed responsibility. She has a 30 year dealership parts background and struck me as a go-getter with a “whatever it takes mentality” and is appreciative of her new employer. And I can surmise from a few minutes of “straight talk” that she wouldn’t say so if she didn’t mean it.
She said she’s empowered to take care of the customer without seeking a boss' approval or having it stall out in bureaucracy. An empowered and “in the know staff” will be a must-have to have any chance of avoiding the company store problems of the past.
According to our recent Ag Equipment Intelligence List, “North American Manufacturer-Owned Ag Equipment Dealerships,” there are 30-plus company owned and operated farm equipment stores today. Even if “reluctant participants" in the company-store model as most of them say, the shortline manufacturers on the list include Claas, Krone, Equipment Technologies and Kinze.
As long as I’d been attending Farm Equipment Manufacturers Assn. meetings, the idea of shortline dealerships was celebrated and promoted, though there’s little evidence in any of those manufacturers personally investing in one, or in tandem with one another. An exception is Great Plains Manufacturing, who long before its sale to Kubota, launched its own dealership to break into a locked-out territory in Illinois. It eventually added New Holland tractors to try and make a go of it before eventually throwing in the towel.
But now, we have a real mainline (covering all primary equipment segments) back in the retail business with AGCO and its 7 AgRevolution locations.
On the topic of company stores, one industry veteran pointed to “clueless executive leadership not letting the locals run it properly" which led to the epic failures. He went on to say “history also has a way of repeating itself if those making the decisions chose to ignore the reality of history.” He advised every exec to read A Corporate Tragedy, the landmark book by Barbara Marsh detailing the implosion of the once-great International Harvester. (For a cliff note’s version, see “Why Did International Harvester Break Up?” by our friend and former IH executive/dealer Paul Wallem.)
Back to AgRevolution. A couple of more observations on what we saw in Vincennes.
The young salesman, Guy Myers, insisted that he individually take both Kim and I into the Fendt 930 tractor. The offer, much less the follow-through, is highly unusual for a dealer to do with two scribes like us. What he was really doing, as I figured out, was practicing his pitch. I’m certain we got the full technology, creature comforts and screen commands overview that he’d be giving any farmer taking a look at this “other shade of green.” His enthusiasm and presentation was top-notch.
While Myers was demoing the tractor for Kim, Rinsch and I discussed the shortline equipment plans (she’s eager to get their hands on additional shortline wholegoods for the heavy application business in the area) and the company’s parts stockings. She pointed out the sprayer parts and fittings that dominated the small showroom, which has a quick "in/out" vibe to it – attractive for the time-strapped farmer.
“If having plenty of those inexpensive parts on hand is what it takes for the area farmers to get to know me and Guy, we’ll do it all day long.” She also fought for management (it took repeated attempts) to invest in a machine to put the store in the hydraulic hose business after recognizing the void in the area. And once she got the machine in-house, she insisted everyone was trained to ensure all could fully deliver on their new hose-cutting business. She gets both the marketing mindset and the personal interaction that it’s going to take to change hearts and minds.
The pair is also eager to get the planned service shop addition they'll need to handle the bigger equipment and land more share of wallet out there.
As we said our goodbyes, we mentioned that we were dropping by to see our friend Ray McCormick in the Vincennes hospital. They put a Fendt cap in our hands and asked us to share their well wishes. When we presented it to Ray a few minutes later he laughed that he doesn’t typically wear that shade of green, but he’ll remember the gesture and maybe he'll be back in the store for hose or sprayer parts.
The pair had all the enthusiasm that a startup enjoys, but they are getting more business due to having tractors on hand, they say, and attracting buyers well beyond the immediate vicinity and from the announced exit of MacAllister Machinery from the ag business.
I suspect that if this model can be succeed (when others failed), CEO Stacy Anthony will figure out how to structure, lead and execute it. Prior to joining AGCO, Anthony was CEO of Claas’ company store MirTech Harvest Center and prior to that was the international sales director for the large Brandt Holdings (Deere dealer group). He’s been at our Dealership Minds Summit on many occasions, including last year’s presentation on improving absorption rates.
Can today’s advanced communication technologies, ample product availability on company owned sites, and a return to the long lost non-owner’s “ownership mentality” allow company stores to find a revival? As some say, the corporate world of farm equipment retail in today’s consolidation feels more like “company stores” than at any time in history.