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News & Articles

Oct 1, 2010

Iowa and Nebraska Ag Equipment Dealers' Profit Drops in 2009 on Same Sales

Posted by: Jill Casey - 10/01/2010 2:20 PM (Articles, Farm Equipment Industry)

The Retailer (I-NEDA)
by Tom Junge
Iowa Field Director

According to the 2009 Cost of Doing Business Study (CODBS) conducted by the North America Equipment Dealers Association, net income before taxes (NIBT) dropped from 5.32 percent of sales in 2008 to 3.72 percent. (In 2007, NIBT was 3.50 percent.) Total sales actually increased slightly from $10.6 million to $10.9 million. On the national level, NIBT declined from 2.99 percent to 2.66 percent, while sales remained constant at $9.8 million.

Iowa-Nebraska dealers once again did a better job controlling expenses. Their expenses as a percentage of sales were 11.69 percent versus 15.48 percent for nationwide dealers.

Sales margin in whole goods dropped from 8.4 percent to 6.5 percent, while parts sales margin dropped from 30.3 percent to 29.2 percent and service margin sales dropped from 60.2 percent to 56.7 percent.

The 2009 CODBS results are available from the Association office for $99.00.

"Real-Time" Cost of Doing Business Results?
The results of the Cost of Doing Business Study are a helpful tool. Dealers want to know how they are doing against their peers in the industry. However, the problem is that dealers are looking at the past since it's common to get the results nearly 12-18 months AFTER you close out that fiscal year's business.

Wouldn't it be nice to see how your are doing in real-time? That potential is coming soon!

Recently we met with Spader Business Management to learn more about True* Online Graphic Dashboards and Reports. Initially, True* 24-hour, interactive dashboards will provide dealers with online reports and graphics illustrating the dealer's year-to-date performance compared to budget, past year's performance and industry averages.

Due to Spader's vast experience with ag equipment dealers, they will be able to assist a dealer in setting a budget and can forecast the dealer's future performance with their trending/seasonal factors. Wouldn't it be nice to know how the year is going to look before the end of your fiscal year?

With as little as 30 dealers from Iowa and Nebraska participating in True*, Spader could provide improved comparative industry data in real-time (previous month results). If enough dealers participate, the comparative data could even be broken down by volume categories and major company brands. Other possibilities include reports for our states, such as months of supply for used combines, balers, etc.

Having these types of industry reports for our two states is exciting. Expect to hear more about True* at the Annual Conference and future dealer visits. 

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