With new equipment and technologies being released all the time, dealers may find it increasingly difficult to manage sales, implementation, education and customer relationships across an ever-expanding universe of products.
One management approach is to employ precision subdealers, but this relationship can bring with it a host of potential challenges. Dealers share some of the things you need to consider if you’re thinking about selling through subdealers.
1. Manage Volume
The main reason for selling through subdealers is to increase sales volume. Subdealers essentially act as additional sales people, potentially working across a broader geographical area, so logically that could lead to increased revenue and customer reach. However, figuring out the compensation package for subdealers can be tricky.
David Orr of Topcon Agriculture says when setting up subdealers, it’s important to “find the sweet spot, where you can be profitable selling products from a specific manufacturer through a subdealer and also have your subdealer profitable enough that they don’t decide to go directly to the manufacturer for the full discount structure.”
He adds that it can be done, but it’s very challenging because it’s different for every subdealer and every territory area.
2. Focus on Core Competencies
Another big reason for selling through subdealers is to allow everyone to focus on what they’re good at. As the saying goes, if you try to be everything to everyone, you’ll end up being nothing to anyone.
So if your primary salespeople are good at selling and servicing iron, it might beneficial to use a subdealer to sell precision equipment.
3. Constant Communication
Keeping everyone in the loop is a significant challenge when working with subdealers. According to Andy Thompson of Yetter Mfg., getting the information from the manufacturer down to the subdealer can be a big problem.
“We’ve had a lot of dealers selling through subdealers and it’s probably worked well less than 10% of the time, and the lack of communication always ends up hurting the subdealer and ultimately the customer,” he says.
Getting details in black and white and establishing clear lines of communication will help facilitate that relationship.
4. Clarify Expectations
Ultimately, the most important aspect of working with subdealers is to clearly define expectations and identify what each party will be responsible for, including who does sales, implementation, customer service and other logistics.
Spelling all details out clearly may seem like a monumental undertaking but it will smooth out the relationship and help create a win-win for all parties.
