First of all I have to pay tribute to John Walker, one of the most knowledgeable product support experts on the planet, for his contributions to MHW and its readers and his always helpful attitude when I asked a dumb question. I read (and studied) every column he produced (saved many of them) and have a library of materials he has sent me along the way. Good luck to you John .......but you can still expect a call from me when I have another dumb question.
And now we welcome David Baiocchi to take up where John left off with his own version of the product support business. Based on David's resume he sure has a lot of industry experience to share with us. I have not spoke with David as of yet, but plan on doing so later this week. I hope all readers of MHW appreciate the body of knowledge found in these pages every month. I read it cover to cover and constantly say "Boy, there is lot of money making information in this publication." I hope you pass it around your shop and make use of each contributors’ commentary. Believe me ....the price is right.
I have been spending quite a bit of time lately finding out how the digital world and telematics is going to impact our industry. After making some initial studies I can truly say the pace quickens for any company associated with any type of equipment sold through dealerships or rented from a rental company. I am sure each one of you can relate to a business you have been familiar with that is either no longer there, has disappeared from the scene, or has been replaced with some form of digital transactions. I can think of many businesses that have just become obsolete and are no longer viable business models.
Since I love reading I recently attended a book fair on the south side of Chicago in an area called Printers Row. I remember this area from my earlier auditing days when I was doing audits of various printing companies located in Printers Row. There were blocks of massive building with all this heavy noisy printing equipment, located next to the Chicago River which was used to transport the paper to these buildings. But now.....they are all condos without a printing press to be seen or heard. ....and this transformation took place not too long ago.
There is no industry exempt from economic and industry cycles. They keep coming, and they keep accelerating making it almost impossible to stay ahead of the game. What do we see happening in the lift truck business?
· Market kind of flat
· New electric truck technology
· Less dealers
· Different rental patterns
· OEM's consolidating
· OEM's consolidating their dealer network
· Telematics changing the product support opportunity
· Move to national accounts
· OEM's selling direct
· OEM's selling to rental companies
Please continue to add to the list and please send me a copy of your additions because I am always interested in what you have to say.
ON the construction side of the equipment business rental is taking over the utilization of the equipment. About 60% of the units in the field belong to a rental fleet. Can the lift truck business be far behind? Not only are OEM's asking their dealers to be a rent-to-rent store, contractors are asking for telematic information on their own equipment as well as on the rental units the dealers provide. Again, can the lift truck business be far behind? I have even come across OEM's of rental equipment looking for dealers to sell their products. How long before we are all rental companies that happen to have new units available for sale? If that happens say “so long” to a number of OEM's that missed the rental boat before it left the harbor.
Just imagine for a second how VR is going to impact the equipment business, from training to repair and maintenance work, with the work being performed because the machine called you to tell you it needs to be serviced. Guess what, the machines will last longer, maintain their residual value and push out the replacement cycle (the only cycle not accelerating.) Say so long to more OEM's.
How do you envision your company three years from now....five years from now.....ten years from now?
If you plan to stay ahead of the game I suggest you participate in a 20 Group or Performance Group so that you can interact with other dealers looking to manage and increase shareholder value. I can tell you from experience that these work and will help you set attainable goals related to the current trends in the industry.
Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail email@example.com to contact Garry.