How to Become a Farm Equipment Dealer

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Farm equipment manufacturers are looking for dealers who have the financial resources and business know-how to represent their product successfully. Dealers with retail management experience and strong people skills are also sought after by farm equipment manufacturers. Prior experience in retail sales and a connection to the farming community can assist a dealer in building a successful dealership. Equipment dealers should expect to sell to a diverse audience including commercial farmers, landscapers, weekend farmers and general contractors.

Write a business plan for your farm equipment dealership. Before choosing an equipment manufacturer to represent, know where you would like to establish your business, what the state, county or city requires you to do to become a business owner and how you will finance the building and equipment purchase. The U.S. Small Business Administration (SBA) is a resource for small-business owners who need help with business plans and advice about financing. (see Resources)

Contact the various farm equipment manufacturers and ask about becoming a dealer. Some manufacturers may have information and brochures available online for potential dealers to review and others may mail a “dealer package” to anyone interested in a dealership. For example, John Deere and New Holland have inquiry applications available online. New Holland also includes a dealer brochure at its website. (see Resources) A list of farm equipment dealers can be found on the Farm Manufacturers Association website (farmequip.org).

Review the dealership process for each manufacturer and make sure you can meet the established requirements. Each manufacturer will have its own process and contract for establishing a dealership. Some may supply financing and others may require the dealer to secure financing. A manufacturer could also require previous experience with equipment sales or a business history in a farming community.

Choose a manufacturer to work with and supply the company with the all requested information for application. Requested information can include financial statements, proof of business experience, business and personal references and a letter of credit.

Supply any additional documentation of information the manufacturer requests. Manufacturers want to make sure you will be able to hold up your end of a contract. They may request in-person meetings, proof of financial backing or market information for the region and audience where your dealership will be located. Some may request a resume and others may complete a background check.

Wait to receive a signed contract from the manufacturer before moving forward with your business plan. Dealers must have a legal contract in hand before representing the manufacturer in any way. Potential dealers should hire a contract lawyer to review the contract before it is signed.

Get trained by the manufacturer. Manufacturers may provide training for a dealer as part of a signed dealership contract. If training is not included, then request training and demonstrations of all equipment. For example, New Holland provides sales and parts support and online employee training for dealerships.

Tip

Farm equipment manufacturers may require exclusivity from a dealer. This means a dealer can only sell the manufacturer's equipment through his dealership.

Farm equipment dealerships typically require a large financial investment. For example, John Deere states on its dealership inquiry form the minimum equity required by a dealer starts at $3 million and can go as high as $30 million depending on the type of equipment a dealer sells.