Views: 2 Author: PEAK Publish Time: 2023-07-17 Origin: Qingxianlaonong
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Recently, I found that the domestic agricultural machinery circulation industry has undergone great changes, especially in the northern market. With the disappearance of a large number of small tractor brands in the tractor industry, a large number of small dealers in the county market have quit or died. Those who have not quit are also in a state of lack of support. For a large number of dealers selling on credit, I can't even die with millions of unpaid goods outside.
2023 may be the year with the most rapid development and changes in the domestic agricultural materials industry. On the one hand, the country has proposed favorable policies such as the addition of hundreds of billions of kilograms of grain projects, the construction of high standard farmland, and the focus on grain. On the other hand, it has had adverse effects such as low grain prices and market saturation, as well as rising prices of the country's four machinery.
So how can machine dealers face various pressures and difficulties, not falling behind, not being suppressed by upstream manufacturers and major distributors, and establish irreplaceable differentiated core competitiveness? So that one can easily navigate and dance in a turbulent and unpredictable environment? Here are some suggestions:
01
Role switching: from distributor to retailer
There is a certain difference between distribution and retail. Generally, agricultural machinery distributors need to have functions such as product promotion, channel management, logistics transfer, and advance payment. Distributors can be said to be an extension of the functions of production enterprises, which assume a part of the functions of manufacturers, while retailers have very single functions: selling goods and providing services. Some retailers are even only responsible for sales, and the services are provided by manufacturers or social organizations.
At present, there are fewer and fewer real distributors in the domestic agricultural machinery circulation industry. Some experts believe that the more accurate name and positioning of domestic agricultural machinery distributors should be retailers. This is because the deep distribution channel policy of "channel sinking, network dense planting" promoted by upstream agricultural machinery production enterprises and the widely accessible logistics transportation system have weakened and deprived most of the functions of agricultural machinery distributors, The only remaining functions are product promotion and sales, so it is more accurate to call retailers.
Domestic agricultural machinery distributors need to switch their roles and position themselves as retailers to fulfill their functions. In the stock market, upstream production enterprises value the distribution ability of distributors the most, followed by service ability.
At present, the manufacturing end of the domestic agricultural machinery industry is undergoing a reshuffle, and several oligarchs have emerged. However, there are still too many competitors in the market. For example, in the tractor industry, although the CR5 is 85%, there are still more than 240 small brands present. Oligopolies need to reshuffle, and small brands need to desperately go ashore. Both large brands and small enterprises need more sales and market share to prove their position in the market. For agricultural machinery dealers, Only by selling more machines and completing the target tasks assigned by the manufacturer can one prove their strength.
So domestic distributors need to switch roles and transform from multi-functional distributors to single function retailers. Selling more agricultural machinery to increase the local market share of the represented brand is the king's way. In the era of large manufacturing and small circulation, the core ability of agricultural machinery distributors is sales ability, which is manifested in sales volume and market share. Retailers without sales ability are not worthy of brand agency rights.
02
Business Upgrade: From Single to Rich, Multifunctional
In recent years, the shrinking sales scale of domestic agricultural machinery distributors has been a common phenomenon, especially for distributors representing imported brands and domestic second and third tier brands. On the one hand, they are out of stock during peak seasons, and on the other hand, consumers are becoming less and less interested in lower tier brands due to consumer upgrades.
Only growing enterprises have a future. Agricultural machinery dealers can tolerate a decline in performance for three to five years, but in the long run, they will inevitably be eliminated. Therefore, agricultural machinery dealers need to shift from a single business in the past to a multi business, multi category, multi brand, and product matrix operation. The advantage of doing so is to increase the ways and points of profit. With the arrival of the stock market, agricultural machinery dealers should not only focus on watermelon, but also pick sesame seeds.
Let's not talk about theory or case studies here. There is a county-level agricultural machinery dealer in Fujian, located in the deep hilly area of "eight mountains, one water, one field, half roads, and villages" in the northwest of Fujian. There are over 60 agricultural machinery dealers in each dealer. In 2019, the dealer only had a sales revenue of 10 million. In order to change their own and family's fate, they need to escape from the harsh competitive environment. Since 2020, the dealer has actively engaged in business innovation and transformation:
One is to strive for excellent brands and optimize brand structure. Before 2019, the dealer only acted as an agent for small machines and tools such as walking Rice transplanter, micro tiller, and beater. In 2020, the dealer began to suspend small agricultural machinery business, and tried to win the agency rights of second tier brands such as Jiufu, Linhai, Aihe, and Nongfu, and it is the agency rights of a County-level city.
The second is to enter multiple businesses and achieve multi-channel profitability. The agricultural machinery dealer who only sells tractors and combine harvesters can only be "old ladies celebrate the New Year, and every year is worse". In order to increase revenue, this dealer can say that as long as the business that can make money is open to all comers, since 2020, it has introduced orchard machinery, seedling raising streamline, aircraft and Beidou navigation, drying equipment, and even carried out the business of trade in old agricultural machinery and two mobile phones, and its more than 50 second-hand agricultural machinery are all through Tiktok Kwai and WeChat friends circle sell to other provinces. In addition to increasing product categories, the company also cultivates project sales ability, and project sales exceed store channel sales. This multi business combination increases business volume and realizes multi point profitability.
Sales share costs and structure generates profits. Domestic agricultural machinery dealers need to increase their scale and volume through a diversified and multifunctional business combination, but scale and volume do not necessarily bring about profit growth. Profit growth comes from optimizing the business structure combination.
03
Market expansion: from one county to multiple counties, multiple sites and multiple profits
The domestic agricultural machinery industry has typical characteristics of large manufacturing and small circulation. The business scope of dealers is limited to the county level. The demand of a county level market is the Lebensraum of dealers. Obviously, the ceiling is very low. The business scale of dealers in the county level market in the northern region is generally within 50 million yuan, and that in the southern region is within 30 million yuan.
There is no whale in a small pond, and there is no big dealer in the county market. Domestic agricultural machinery dealers should actively expand their physical space within the policy scope of the upstream manufacturers, break the "stereotype" of the county market, expand from one county to several counties, from the province to surrounding provinces, and break the ceiling of 30 million yuan and 50 million yuan.
Taking the distributor in Fujian mentioned above as an example, in order to break through market region restrictions, the distributor actively expanded its project business to a neighboring province in 2022. After expanding the project scale, it expanded its network to other provinces by acquiring local distributors. In the first year, it increased sales revenue by 20 million yuan, and plans to achieve sales of over 50 million yuan by 2023, basically reaching the business volume of Fujian.
In addition to the extension of this physical space, through live streaming and e-commerce business, dealers can also achieve nationwide business.
04
Creating a value anchor: enhancing service capabilities
Essentially, the decision-making power of the brand and operating area represented by the distributor is in the hands of upstream manufacturers. Manufacturers sometimes do not even call for the agency qualification of banning distributors, so the brand represented can be considered as the core resource of the distributor, but it is not the core competitiveness. The true core competitiveness is determined by the distributor themselves.
Service is the core competitiveness of distributors, as it is up to them to decide whether they want to provide good service, and the strength of distributors often depends on their service capabilities.
The development of service capabilities depends on the following aspects: firstly, enhancing service awareness. Only by serving users wholeheartedly and treating them as gods can various service requirements be executed in place; The second is to build a service team, which is reflected in both the number and quality of personnel. At least a sufficient number of maintenance and service personnel should be ensured, and no one emphasizes the importance of service, which is just empty talk; The third is to improve service capabilities. A good service attitude alone is not enough. To truly solve users' problems, it is necessary to improve the technical and tactical level of service personnel. On the one hand, it is necessary to actively participate in various learning and training activities organized by the manufacturer, and on the other hand, it is necessary to guide the new with the old, update knowledge, and strengthen internal learning.
05
Tool upgrade: Tiktok, Kwai, official account
"If you want to do a good job, you must first use your tools". Production tools determine the level of productivity. In the The Internet Age, you still use red tassels to carry out revolution, and you have lost without making a move.
Mobile phones are new agricultural tools, and live streaming is new agricultural work! Compared with agricultural machinery production enterprises, agricultural machinery retailers are the most suitable for online new retail.
The biggest advantage of online sales is the realization of space bending and time collapse. Small county dealers can sell second-hand agricultural machinery and agricultural machinery components to various parts of the country, and even directly sell them overseas.
There is a dealer in Songyuan City, Jilin Province who calls "Niu Zong talks about agricultural machinery". As of June 17, 2023, there are 1.424 million fans. The dealer broadcasts live in Kwai every night from 6:30 to 9 p.m., rain or shine, and has accumulated millions of fans over at least five years. The dealer acts as an agent for second-line and low-quality tractors, such as Huaxia, Weihe, Detuo, etc. These brands that do not have an advantage in offline stores are popular in the dealer's live broadcast room, This dealer has been the sales champion of Huaxia for many consecutive years. A live broadcast can collect 500 units of deposits and sell millions of accessories. In 2022, the dealer moved to a new venue called "Niu Zong Says Agricultural Machinery E-commerce Base".
At present, online live streaming and short videos are not only promotional tools, but have also become parallel sales channels with offline stores. In Northeast China, Inner Mongolia, and Tancheng, Linyi, Shandong, many agricultural machinery dealers have online sales revenue that far exceeds offline store sales. These dealers are no longer traditional dealers, they are truly new retail or e-commerce.
epilogue
In the era of large manufacturing and small circulation, there has been a large diversion of agricultural machinery dealers, and a large number of dealers will withdraw with the disappearance of upstream small brands. Dealers who cannot complete the constantly mandatory tasks of upstream will be deprived of agency rights. Some will support them, while others will strive to transform. The true success of the transformation will inevitably be those who follow the historical trend of industry development cycle and constantly strive for self-improvement.
