Ron Harmon opened Big Equipment in West Havre, Mont., as a shortline and used machinery dealership after a long career owning both a tractor manufacturing company and a Case IH dealership. From 1974-1991, Harmon was the owner of Big Bud Tractor Inc., a high horsepower tractor manufacturing company, and from 1984-1993, he was the owner of a Case IH dealership.

“The fact that I had been a full line Case IH dealer and a manufacturer with dealer locations around the country gave me a unique perspective on being a dealer,” he says. “In the process of being a Case IH dealer in particular, I learned a lot about the level of control the major manufacturers have on their dealerships. For the major manufacturers, everything seems to focus on market share and sales volume. As the majors push dealers to merge, they lose personal touch with customers.

“Becoming a shortline dealer has allowed me to maintain face-to-face contact with my customers and lets me make executive decisions quickly and thoughtfully with the future of the customer in mind, not just how a sale will impact my market share.”

In 1993, Harmon sold his interest in the Case IH dealership and then opened a new shortline and used equipment dealership, Big Equipment, in 1994 with the goal of getting back to the basics. “I wanted to be able to have a smaller dealership, more diverse equipment and I wanted to maintain direct personal contact with my customers,” he says. “I’m still in contact with a lot of my Case IH customers and many of them are now coming to me to buy shortline equipment because of the personal contact and service we’re able to provide. Being a shortline dealer is all about having the ability to deal with the small things for customers.”

Even in 1993, Harmon saw the writing on the wall for dealership mergers and acquisitions pushed by major manufacturers. In his experience, large, multi-store dealerships have less personal interaction with their customers and are subject to the whims and wills of the major manufacturer, something he didn’t want for his dealership.

“Customers want to know who they’re dealing with and be able to trust that if something doesn’t work, they have someone they can call. They want to be able to put a face with the dealership they choose to work with,” he says. “It’s not that there aren’t large dealerships that do a good job of taking care of their customers, but my customers have told me that it’s not the same as being able to walk in the door and talk to the owner who can quickly and thoughtfully make a decision.

“When I sold the Case IH dealership, it was because I wasn’t enamored by the idea of having multiple locations and not being able to give that direct personal attention to my customers anymore. The major manufacturers have so much control in their dealerships and some would say that’s a good thing, but good for who? Certainly not for the owner of the dealership or the customers,” he explains.  

For Harmon, success as a shortline dealer revolves around having the flexibility to go above and beyond to meet a customer’s needs. He sites a case where a customer came in with complaints about a recent purchase. “If I sell a piece of machinery to a customer and they come back and tell me what didn’t work or what they wish they would have gone with instead, I’ll actually go out and try to fix the problem to get them what they wanted. Of course it has to make sense financially, but usually just offering this to the customer is enough to show you are committed to supporting them. Many times after I offer this service, customers will say they’ll give it another try and see if they like it, but it’s the willingness and ability to try as a dealership that is really important.”

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Big Equipment in West Havre, Mont., finds success selling a mix of new shortline equipment and refurbished, decades old tractors.

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Becoming a Shortline Dealer

When Harmon first opened Big Equipment, it was almost exclusively a used equipment repair shop, allowing him to reconnect and work with many of his Big Bud Tractor customers whom he had been less able to service as a Case IH dealer. Over time, though, Harmon says that many of the shortlines he worked with as a Case IH dealer began to approach him about taking on their product lines at Big Equipment.

Today, Big Equipment sells new Versatile, Westfield, Rhino, Pillar, SeedMaster, Ezee-On and J&M equipment and Harmon says that many of these lines approached him first to become a dealer. While he also pursued some of the lines himself, he says he didn’t gather the shortlines overnight.

“We brought on some of our shortlines a few months after opening Big Equipment,” he says. “Others came back to us years later. Either way, when we are approached by a manufacturer or deciding whether to add a line, it has to be proven to me  that we’re going to be able to move a reasonable amount of product. We need to be able to sell enough of the product to give it adequate parts and service support and commit time to really knowing the product. If we can’t do that, we’re better off not taking it on at all.”

With 75% of Big Equipment’s revenues coming from sales of used equipment, owner Ron Harmon says selling new shortline equipment helps generate more used for the dealership to sell.

Harmon says the worst thing a shortline machinery dealer can do is to take on too many lines. He suggests dealers analyze the market in their area first. If they can’t find enough sales to cover support and training costs for a new line, they need to stick with the products they already know they can sell and support well.

When Harmon made the move from a major line dealership to a shortline and used machinery store, he says the one downside was the loss of the manufacturer-provided marketing and promotions information. But having more control over decisions made at the dealership has more than made up for this.

“As a used equipment and shortline dealership, I enjoy the freedom of picking and choosing the shortlines that we feel best fit us in our area,” he says. “It would be an understatement to say that the major line companies don’t look upon shortlines with favor, especially if it conflicts with anything they’re trying to sell. As a shortline-only dealer, we have a lot more flexibility and receive more support on an individual product basis with our manufacturer representatives.”

Generic Parts Mean More Versatility

 Adding the Versatile line was the best decision Big Equipment has ever made, Harmon says.

Success in Shortline Machinery is a new regular feature in E-Watch, our bi-weekly e-newsletter. It is brought to you by Versatile.

Versatile, celebrating 50 years of 4WD production, is a full-line equipment manufacturer known for building products that are simple, reliable and easy to service and maintain. Versatile is seeking independent-minded dealers capable of selling and servicing equipment for large scale farming operations. If you want to add more horsepower to your bottom line, contact Alan Graff at agraff@versatile-ag.com or (920) 819-9039.

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“Adding the Versatile line has given me the choice of selling new or used machinery. I was interested in Versatile because they’re one of the few companies that still builds equipment with generic or widely available, non-OEM parts,” he says. “The transmission is built by Caterpillar, they have a full line of Cummins engines that are generic across the country. They didn’t go overboard with electronics, so just about anyone can service a Versatile tractor. We use that as a selling point to customers. They have options if they own a Versatile.”

The versatility of Versatile equipment has allowed Big Equipment to expand its sales area. Harmon says he sells equipment all over the U.S. and parts of Canada and this works for both the dealership and customers because they aren’t tied to Big Equipment, or even another Versatile dealer, for parts and service.

“I make it clear to my long-distance customers that I can’t be at his doorstep when he has problems,” he says. “But I tell those customers that just about every part of that Versatile tractor can be resourced through other people. There’s almost certainly a Caterpillar dealership or Cummins distributor in their area.”

For warranty work, Harmon says Big Equipment will coordinate repairs and work with Versatile to manage this work for long-distance customers. 

While the term generic is sometimes paired with the idea of a cheap product, Harmon says this isn’t the case with Versatile. “I’ve found that Versatile is one of the most heavy duty tractors in the industry today. They have one of the largest cabs and the creature comforts in these tractors are excellent. They have a full complement of equipment and I haven’t found any of it that wasn’t good.”

Mixing New & Used Equipment

While Big Equipment sells a diverse offering of new equipment, 75% of the dealership’s revenue comes from sales of used equipment. Harmon says his new and used product offerings help sell each other, and in many cases he uses his shortlines to generate more used equipment to sell. The dealership actually pushes customers to make a trade when closing the deal on a new piece of equipment and this has made working with Big Equipment desirable for customers across the country.

“When I first took on the Versatile line, I warned them that I wouldn’t be the typical dealer,” Harmon says. “I sell equipment around the country because I’m willing to take in customers’ 30 year old tractors as trade-ins on new equipment purchases and pay good money for it when local dealers are turning these trades away. But if a customer calls me for a cash, no trade deal, I’m definitely not going to be the low price option. If I’m not going to make a really good margin on that piece of equipment, he can buy it from just about anybody cheaper than from me.”

Big Equipment owner Ron Harmon is passionate about selling old, high-hour used equipment, like this Big Bud tractor, because Harmon says the dealership sees its highest margins with this equipment.

Selling old used and new shortline machinery is all about higher margins for Big Equipment, and Harmon says Versatile is very supportive of the entire operation. “My Versatile representative supports us in every way possible. He understands our used equipment niche and understands that he’s going to get more sales out of Big Equipment because of our used equipment business,” he says. “If I was a major line dealer, I can tell you from experience that this relationship would be much different. We are offering a service to our customers because we don’t look down on anyone trying to trade in a 30 year old tractor. We actually like those here.”

Harmon says the dealership’s margins are much higher on shortline equipment than when he owned a major line dealership because customers value the dealership’s ability to take high hour trade-ins.  “In many dealerships, selling used equipment is a challenge. It’s a cuss word. If you have to take in a used piece of equipment to make a sale, it’s a bad day,” he says. “But at Big Equipment, I see used equipment as our future.”

Big Equipment is passionate about used equipment because Harmon says the dealership sees its highest margins on updated, good condition, high hour used equipment. “We use our new shortline equipment largely to generate used equipment because of the margins,” he explains. “When we take in used equipment, it’s with the mindset of generating a future sale. For example, we will take on a 30 year old high horsepower tractor with mediocre hydraulics and electronics because it has a nice engine and transmission. At the end of the day, we know that after we upgrade the hydraulics and electronics, put in a new seat, add a new GPS and replace the wiring we will be able to sell this tractor for much higher than book value. A book might tell you this specific tractor sells for an average of $20,000-$30,000, but after I invest $10,000 into upgrading and fixing it, I can normally get between $60,000-$70,000 out of that tractor.”

Success in Shortline Machinery is a new regular feature in E-Watch, our bi-weekly e-newsletter. It is brought to you by Versatile.

Versatile, celebrating 50 years of 4WD production, is a full-line equipment manufacturer known for building products that are simple, reliable and easy to service and maintain. Versatile is seeking independent-minded dealers capable of selling and servicing equipment for large scale farming operations. If you want to add more horsepower to your bottom line, contact Alan Graff at agraff@versatile-ag.com or (920) 819-9039.