Spending this week in Omaha, Neb., for our Dealerships Minds Summit event focused on remarketing used equipment, I thought about some of the challenges and opportunities dealers are seeing in this area on the precision side.
While speakers at this year’s Summit went in depth on machinery-centric strategies including discipline with valuation and leveraging “washout” cycles to control used inventory, there are applicable lessons to managing a profitable used precision business as well.
Here are a few tips to consider, gleaned from some savvy precision retailers during the last few years.
- Stock Lean. Carrying a light inventory seems like a given, but if a customer comes looking for an item a dealer didn’t stock enough of, they’ll miss out on a sale and disappoint a client. Carrying only what a store needs can limit the loss dealers may face on aging precision inventory.
- Monitor Inventory. Diligent records keep inventory flow seamless, but it can be a tool for spotting stagnant supply as well. Coordinating and sharing inventory is also more efficient if it’s tracked correctly — a potential problem for bigger dealer groups.
- Maintain a Comfortable Margin. Precision inventory bloat can get a dealer into trouble. But if the equipment is purchased at a comfortable margin, there is wiggle room. Stocking at wholesale prices usually works well when the selling window is small, but building in more breathing room can be invaluable.
Look for full coverage of the 2017 Dealership Minds Summit in our sister publication, Farm Equipment and online at www.Farm-Equipment.com.