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Farm Equipment Distributors Industry Profile Excerpt
| SIC Codes: 5083 NAICS Codes: 423820 Page Length: 10-12 Last Quarterly Update: 11/24/2008 View Sample Industry Profile |
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The distribution of farm and garden equipment in the US is handled by about 1,400 wholesalers and 5,000 dealers, with combined annual revenue of $40 billion. The typical distributor is privately held and has less than $10 million in annual sales. The industry is fragmented: the 50 largest distributors hold about 35 percent of the market. Only a few distributors operate more than one location.
COMPETITIVE LANDSCAPE
Demand is driven by the health of the farming sector, which is tied to crop prices. The profitability of individual companies depends on good merchandising and efficient operations. Large distributors have few economies of scale but can offer customers a wider range of products. Small distributors can compete successfully by holding exclusive territory rights to popular products. The industry is only moderately automated: average annual sales per employee are about $350,000.
Large manufacturers of farm equipment, like John Deere and AGCO, mainly bypass wholesalers and sell directly to networks of local dealers.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include farm tractors, lawn mowers, irrigation equipment, and harvesting machinery. Tractors account for about 15 percent of industry revenue; lawn mowers, irrigation equipment, and harvesters for about 8 percent each. Other products include planting and cultivating machinery, spraying equipment, dairy machinery, snowplows, and snow-blowers.
A large number of products are tractor attachments. About 15 percent of industry revenue comes from sales of used equipment. Many dealers also have a large parts and service business. In ...
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