Filling in voids | Local dealers offer services or flexibility not available from big companies
It’s the case of the Strange Survival of the Independent Ag Dealer.
It’s a mystery that independent dealers have happily resolved in a beneficial manner.
Five years ago, many thought that independent dealers were a dying breed in Western Canada.
“Yes, I thought it was all going to be over for most (dealers),” said David Edgar, an independent dealer in Sask-atchewan’s Grenfell-Wolseley area.
“It was fear of all the change, and you looked at it and said, ‘these guys (the big grain and input companies) are just going to take over the world.’ ”
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However, the independent dealers have survived and grown, keeping their share of the prairie input business and adding services, just as their main competitors have done the same.
There doesn’t seem to be a single factor that explains how the local, independent dealers were able to survive aggressive moves into farm input retailing by integrated grain companies and major input networks in the early -to-mid 2000s.
One possibility is that the major companies didn’t necessarily have all the competitive advantages that the independents feared they had.
“We found out that there were some cracks in the armour and that in some places we can do things better than our competitors,” said Edgar.
The bigger companies generally have the advantage of lower prices on some items at some times, but Brandon dealer Ray Redfern said he hasn’t built a business on advertising rock-bottom prices because that doesn’t create a stable, long-term operation.
“Many of the independents here are not going to be fixated on always offering the lowest price and trying to offer a better mousetrap,” said Redfern.
“We say we have integrity and that if something goes wrong, we’ll make it right.”
Independent dealers have expanded in recent years, offering agronomy services as well as basic input sales and delivery. They also focus on troubleshooting problems that farmers are having in the field.
As well, they hope to be more available than the grain company competitors, with most management and staff living in the community and able to make late-night, early-morning or weekend emergency calls.
However, Redfern said price is still a major concern for most farmers, so independents who are still in business are the ones who realize they can’t keep farmer business if they aren’t at least close in price to the most aggressive discounters.
“If I rely on the old line and say, ‘I’m a local boy and I’ve been here and I’ve earned your loyalty,’ but we haven’t executed well or provided benefits and value, those guys pretty soon leave us,” said Redfern.
Edgar said he respects his grain company competitors, which can often offer programs and specialized services that the independents can’t. However, he said the independents try to occupy voids in service or reliability left by the big companies.
“Most of our deals are done with a handshake,” said Edgar. “You can’t buy trust if your managers move in and out every couple of years.”
Redfern said some of his clients like being able to confront him directly if he screws up.
“My customers say, ‘I can talk to the people who direct the business. I can say to you, that’s BS, and you can’t avoid me.’ ”
