Titan Machinery introduced a new concept to the used equipment market in 2006 with its Titan Outlet Store. The outlet handles 900-1,000 units of used equipment each year with at-cost pricing and no-trade ins philosophy. Its goal: Assist Titan’s ag retail stores to manage used equipment inventory while holding the company’s equity together.

Your used equipment inventory may not be as large as Titan’s, but its impact is still critical to your dealership’s success.

“Moving used inventory is almost as important in gaining market share as finding customers who want to buy new,” says Don Aberle, manager for the Titan Outlet Store Moorhead, Minn.

It’s also critical to a healthy dealership. Aberle lists the cost factors that can affect profitability, including interest, storage and value depreciation for equipment that doesn’t sell, plus wasted time that could be better used on good margin business.

“I believe it is more critical than ever to have a plan to move used equipment. The cost of equipment has gotten so high that the swings from a good market to a bad market could be very severe,” Aberle says.

That’s why it’s so important to make the right decision on a trade-in.
“Anyone can offer money for a trade-in to sell a new piece of equipment,” says Aberle. “But what if you take in 10 combines on trade and your history is only to sell five combines a year?”

Aberle says poor trade-in decisions could signal the end for a dealership in just a few years.

“It’s about changing behaviors and not just being rogue,” he says.

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