With most products, two-step distribution means the manufacturer sells it to a retailer or wholesaler, who then sells it to the customer, whether that’s a consumer or another level of retail. Rarely does the final consumer look to the retailer as a representative of the manufacturer. They don’t consider the local grocer as a Coca-Cola supplier.
Not so with construction equipment. The machine brand is often incorporated into the dealer’s name. Even with multiline distribution, the brands are boldly and, often, proudly displayed in the dealer’s signage and marketing.
Brands are important, and as technology becomes more intricately entwined into construction machines, manufacturers realize their dealers’ ability to represent them on the front lines has become paramount to brand success.
Distributors will most likely be the first to hear the questions and concerns raised by end users considering a new machine, which, by the way, also has a few thousand dollars worth of electronic hardware and software tacked onto the retail price.
After a machine is acquired, distributors will certainly be the first call when an end user runs into any problems with the machine, whether that problem is mechanical or technology-related. Manufacturers’ foreheads bead up with sweat when they think about that call coming into some of their less-sophisticated distribution outlets.
Editor Walt Moore explains how manufacturers are moving to ensure that those who represent their brands are capable, willing, and equipped to handle the technically challenging demands coming their way.
These circumstances are no surprise to manufacturers, and I have suggested an increased dealer importance for a long time. But as fleet age finally catches up, forcing equipment managers to re-enter the new-equipment market with a vengeance, the fact is many distributors will start to show the cracks behind their facades. Equipment managers may not know what to expect from the company that has been an able partner for years until they start asking the hard questions above.
Manufacturers exhibiting at Conexpo next month will display their equipment and the technology associated with it. Take the opportunity to ask a follow-up question or two about how their products will be supported by their distributors.
Brand and dealer have always been two top considerations for equipment managers purchasing new equipment. The stakes in making the right choices have just been raised.
