The good times can’t last forever. As an ag equipment dealer, you and the farmers you serve know that better than anyone. As inventory levels recover, every dealer wants to avoid equipment sitting on their lot. Especially pieces that’ve been appraised for months and need to go before their value takes a sudden drop.
That’s why the question that’s been on everyone’s mind is: “when’s the market going to turn, and how can I best prepare for it?” Well, for starters you can use more tools at your disposal to move equipment faster and avoid “lot rot”. But next to that, it’s helpful to use strategies to determine where your market currently sits and predict when it might change – for better or for worse.
Top 3 Ways to Predict When the Market Is Going To Turn
Set your business up for success. Use these strategies and tips to help you get a bigger picture of where the ag market currently stands for your AOR:
1. Analyze The Right Data
Don’t jump into a panic about when your equipment value is going to tank. Instead, get a better understanding of the market in your AOR.
For starters, take a look at the current volume of new vs. used equipment being sold. We all know that a higher, or even rising rate of used equipment sales can spell trouble for new equipment dealers, and that can be a huge indication of where the market is headed, for better or worse.
It’s also helpful to know what model is most popular in your area. Take tractors for instance. Sure, you can guess the top three brands farmers are flocking to, but the top model of tractor being sold might surprise you.
And it might be from a brand you would never have expected.
If that’s the case, it could indicate a few different things. For example, a lesser known brand might have found a way to innovate and offer features popular brands haven’t updated yet. It could also be the exact opposite and farmers might be buying an older model for fear of change and innovation.
But knowing this, you’re at least now armed with the right information to help your dealership succeed. That’s the beauty of data. Using it, you can guide your future business decisions and better understand how to protect it against uncontrollable circumstances.
2. Talk to Farmers
Though it’s your job to understand the ag industry as best you can … no one knows it better than farmers. Farmers live and breathe this industry every day.
And the decisions they make ultimately decide when the market is going to take its turn.
Talking with them can give you a better understanding of where the market currently stands. But next to that, it can help you build stronger relationships with your target consumers. When you interact with farmers, you’re really interacting with potential customers for your business. That can help you close sales further down the road.
If you want to learn the most you can from farmers, conduct surveys to see how they’re feeling about the market, what they’re prioritizing in terms of spending, and what they’re looking for from equipment dealers. Not only can this help you get a better understanding of the market, it’ll also show you where you should focus your marketing and sales efforts.
3. Watch the Economy
It’s very possible that different economic factors might impact the ag equipment market and industry. To better understand how the market is currently functioning and predict when it might turn, it’s important to monitor economic activity. That includes interest rates and commodity prices.
When the economy changes, it can drastically affect the equipment market.
For instance, when crop prices are high – farmers are going to make more money. That can drive equipment sales and stimulate the economy of the ag industry as a whole. But when those prices are low, it can often have negative effects on your business and make the following season pretty difficult for ag equipment dealers.
It’s also important to take a look at government policies and initiatives, which can also have an affect on future ag equipment sales.
Take Section 179 for example. Section 179 is an IRS tax code that allows businesses to write off the full price of qualifying equipment or software in the year it was purchased. In 2023, the deduction limit was raised to $1,160,000 and the total equipment purchase limit was raised to $2,890,000.
What that tells you is that the U.S. is incentivizing farmers to buy equipment. That not only means it’s a great time for you to find new sales opportunities, but it also means you might be facing a lot of competition from other dealers.
But keeping up to date with the news isn’t the only way to understand what’s going on. Farmers can come in handy here too. Evaluating the information you receive from farmers can not only tell you what’s happening with the economy, but can also help you predict market change. That includes information such as their income levels, as well as their spending patterns.
What Steps Should You Be Taking?
If you’re using Iron Solutions to value your equipment, you’re already ahead of the curve. But there’s more data and analysis you need to truly understand where the market is at and how to determine if it’s turning, for better or worse.
The best way to do that is with expert data products like EDA. EDA can not only paint you a better picture of your current market share, but it can also help you find buyers in your AOR you might not have considered previously. That means, you can find the data you need to protect your business from a market downturn and find a buyer for your equipment before the lot rot sets in.
Using EDA, you can also:
- Look at new vs. used equipment trends.
- Uncover top brands and models for different pieces of ag equipment.
- Discover how to protect your business if the market turns.
How To Analyze Market Share with EDA
Here is a list of steps on how you can use EDA and its data to better understand the current market:
1. Use Industry Insight
Use EDA Industry Insight dashboard to see the current trend for new vs. used equipment sales. See if they’re rising or falling, and spot any trends you should be aware of.
BONUS: Did you know you can do this first step right away? EDA offers all updated Industry Insight information for free on their website. Check it out!
2. Create a New Search
Using the information you learned from Industry Insight, create a new search of your AOR in EDA. You can sort the results of that search by new equipment, used equipment, or both. Narrow down that search even further by selecting the brand, model, age, and more.
3. Analyze The Results
Take a look at the information in front of you. See if there’s a specific brand of equipment that people are buying either new or used. Learn if past customers are turning to used equipment instead of buying from you again, or if they’re buying other brands from your competitors. Determine if some of your prospects are in their buying cycle or what farms might be in need of your maintenance services. Discover all this and more with all of EDA’s data right at your fingertips.
Take a look at how Casey Seymour from 21st Century Equipment uses EDA in a similar way:
“The data from EDA has allowed me to see and understand what market trends are doing. I can also see buying patterns and predict when a customer is starting down the path to upgrade. I can work with our marketing team and start directly communicating to these customers.”
Don’t wait until it’s too late. Get your eyes on current trends and get ahead of the competition before the market makes a turn for the worse. Learn more about EDA by filling out the form below: