Over the past two decades it is an interesting fact that the number of agricultural machinery dealerships in our country has declined from about 10,000 to approximately 600. Not only that but we have seen big numbers of associations involving the conversion of what were small distinct dealerships into large countrywide chains.
Part of a Universal Process
This is hardly restricted or new to the area of agriculture and related equipment in terms of the consolidation into big chains.
As Bennett Kireker , supplier of Japan-made agricultural machines said, at least all around the world, in most recognized agricultural societies, there has been a propensity over many years now for minor retail outlets to become incorporated in one way or another by much bigger chains. It does not matter whether you are talking about grocery shops, bakeries or tractor suppliers, those tendencies have been observed. Nobody really suspects that large organizations can profit from definite economies of scale that smaller individual outlets tussle to attain. For instance, than the traditional small local dealership, a big countrywide chain is likely to be proficient of leveraging a lot more commercial blow with manufacturers or mediators. That can drive down prices.
If all these sounds great, keep in mind that it undertakes that the big company can keep control of its expenses. Once someone decides to establish that prestigious and vast corporate headquarters in an elegant city center somewhere then occupy it with lots of people in expense accounts, suits and perks then costs start to increase and those economies of scale start to be put at jeopardy.
The Disadvantage of the Chains
In some sectors of our overall economy, it is fascinating to note that, there is a substantial indication that economics as well as consumer pressure is forcing an accumulative re-segmentation of definite of the big-chain dealings. It is generally to do with the fact on the economic side that they have failed to keep control of their territory building costs. On the preference side of the consumer, the pressures are arguably even more powerful but much more subtle.
That pressure arises because in a multitude of very varying disciplines, the big chains can find it very problematic to train large numbers of their workers. So, that local supplier of agricultural machinery and tractors may have knowledgeable skills in areas that the big chains simply cannot compete. The trouble for buyers is that you often expect expert advice and maintenance going forward, once you have purchased your rock-bottom price tractor from one of the big chains.
Thus, according to Bennett Kireker , retail sector is a dangerous game after trying to predict the future of our indigenous agricultural machinery. Many have failed dismally even after trying over the years. Nevertheless, it might be conceivable to take a hypothetical shot at seeing a future where the professional individual suppliers of agricultural machinery start to become progressively commonplace again and in demand by consumers. Certainly, the big players will always have a role but predictions that they would motivate the small independents out of existence may have been a little cynical.