MANUFACTURER & DEALER RELATIONS
70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 %
CONSIDERING THE MANUFACTURERS YOU DO NOT ENJOY WORKING WITH , WHAT DO THEY DO WRONG ? SELECT ALL THAT APPLY .
58.6 %
Communicate rarely
55.2 %
Disrespect my independence , and focus on larger competitors and big-box stores
65.5 %
Provide slim profit margin opportunity , I need to sell large numbers
24.1 %
No training or education
31.0 %
34.5 % 34.5 %
41.4 %
I spoke with both manufacturers and dealers about these things . ( And manufacturer readers will see here that it ’ s not all about complaints .)
Respect For Independent Businesses The word “ respect ” is loaded here , but it boils down to this : Dealers want to feel they are at least as important as the bigbox chain stores . “ The independent dealer is gradually being crowded out with online sales and big-box stores as many ( manufacturers ) are offering products for them ,” said one dealer , anonymously , through the survey we conducted . More directly , Britny Funk from Montana pointed to Toro , saying , “ They say we will get warranty work ( following sales from bigbox stores ), but the people who do come in for service visit us with a negative attitude right away . And it makes it difficult to take care of our customers .”
I spoke with Chris Vogtman , managing director in Toro ’ s residential and landscape contractor division . “ From a customer care and customer service standpoint , we have a full support team and they support dealers all day long ,” he said . By “ customers ” Vogtman means Toro dealers and end users . He added , “ We ’ re in a relationship business , and we put a lot of focus on that . From a warranty perspective , ours are the tops ,
Don ’ t return my calls or emails
Charge me high fees for marketing and advertising
Produce and sell too many or too few equipment options , the wrong mix
Service and warranty claims are difficult and we honor those for both dealers and customers . Not every manufacturer can offer this level of support .”
Does this just mean that they will need to “ agree that they disagree ” here ? Vogtman said , “ One of our core goals is to be easier to do business with . We want to remove that friction for dealers . We know we have work to do , and we want to go from Good to Great .” He said that Toro is making investments in communication tools and practices because “ we want to make the dealer ’ s life easier .”
Toro might not have to look too far for answers , at least according to Britny Funk . “ Exmark is the most phenomenal brand relationship we have , which is interesting ,” she said . Toro acquired Exmark mowers in 1997 . “ They are separate from Toro ,” she said . “ They sell differently and treat us differently .”
Respect is also about online sales , at least for most of the dealers we spoke with . When beginning my research for this story , I googled this : “ manufacturer dealer relations in OPE .” I found an old-but-seemingly-popular article from Harvard Business Review that quoted then CEO of Caterpillar , Donald Fites , who said , “ We ’ d sooner cut off our right arm than sell directly to customers and bypass our dealers .” This article is from 1996 , so Fites said that back when AOL was mailing CDs to people ’ s homes , well before online shopping became a thing . Today customers can buy Caterpillar parts online and have them shipped directly to their home , no dealer involvement required .
Times change , though several manufacturers who sell online do require that customers pick up goods at the dealer . Kubota , for one , sells through its “ K-Com ” platform . “ Customers have to go through a dealer , said Don Lowe , Kubota ’ s executive director of sales . “ We do not want customers coming to us directly . For wholegoods , we are still analyzing that , but we will never go direct . And we ’ re not interested in selling through big box stores .”
Stihl has taken a leadership role in providing an online sales framework that seems to support independent dealers . “ We have a policy allowing dealers to sell online a few different ways ,” said Jeremy Krueger , Stihl director of business development . “ Dealers can have a website vetted for Stihl standards and compliance , enabled with ecommerce . Customers can buy and either pick up items in store , have dealers deliver the products personally , or a dealer can ship the Stihl products .” Krueger emphasized that dealers are not required to participate . “ It ’ s their choice ,” he said . “ We saw a big uptick during the pandemic . It gives dealers a storefront that ’ s open 24-7 . It ’ s not a huge cash cow for dealers ; it ’ s more incremental .”
A few dealers we surveyed pointed to Stihl as a fair and understanding partner . “ Stihl supports the dealer with exclusivity ,” said one . “ They understand our business and offer us a decent profit opportunity ,” said another .
20 OPE Business September 2023 www . OPEBusiness . com