The following article is based on Todd Kanua's presentations at the 2017 Dealership Minds Summit. To watch the presentations, click here and click here.
Due to the number of attendees that preregistered for this topic, the “Valuation Data Sources: What, Who & Why?” roundtable was held both days of the Dealership Minds Summit – Roadmap to Mastering Equipment Remarketing. The majority of dealers attending this session were looking for better tools to use when placing a value on used equipment and trade-ins. One dealer said, “It is an inefficient marketplace, the information is bad. How do we get better information?”
Dealers use a few locations for gathering information: online auctions, local auctions, TractorHouse and Fastline were mentioned. Dealers typically are only looking for information to value equipment they do not sell new (off color). Both John Deere and Case IH dealers listed tools provided by their OEM designed for valuing equipment.
John Deere has a solution called JD Machine Finder, while Case IH also has a new online tool for valuation or quoting.
Monitor Auctions
When looking for equipment values, auctions show both the dealer and farmer what the equipment is worth. One dealer noted, “Auctions are the only time the real sales price is out there.” Some dealers utilized auctions to get rid of equipment they either could not sell or that had been on their lot too long. Dealers tried to provide value for the auction company by giving them some good used equipment from their inventory to sell and not just the stuff from the back of the lot. However, dealers are hesitant to use auction pricing to set their used equipment prices. “If used equipment from a dealer is no better than auction equipment, we should all sell out,” said one dealer. “Not every customer is an auction customer,” noted another dealer. Dealers also stated that they only use auction pricing on “off color equipment,” not their own brand.
One dealer said, “Use your sales guys to set used pricing. Ask what they can sell it for and who they will sell it to? Make them give you 3 customer names.”
Think Dealer Frist, OEM Second
The market share discussion OEMs push on dealers came up with one dealer stating, “If you are in the business for market share you are probably going to be out of business.” And another followed with, “Be in business for you first and market share second, the OEM has not written me any checks for capital.”
Discussion on what to do with used equipment in inventory centered on making upgrades to the equipment to make it “Field Ready” so it could be purchased. One dealer stated they priced their used equipment at wholesale prices and then upsold the customer repairs or reconditioning to make the unit purchased “Field Ready.” This gave them an opportunity to participate in auction level pricing to move used equipment and an opportunity to fill their shop and provide value to the customer.
