In the aftermath of 2020, the equipment industry continues to see shortages of materials, essential parts, and personnel. This has created significant challenges for dealers looking for a consistent source of inventory. Despite the challenges facing the industry, equipment dealers remain optimistic about the future of equipment sales.
At the 2022 CAT Used Equipment Manufacturer Conference, Equipment Trader surveyed several dealers to better understand the obstacle of selling inventory as the industry landscape continues to evolve. Though limited inventory remains a challenge for equipment dealers, the survey results revealed that Caterpillar dealers are exploring a few effective solutions. These dealers also identified new opportunities by expanding their product mix and dealership offerings. Read on to find out how to overcome these challenges and take advantage of these opportunities.
How to Tackle Limited Inventory
Offering pre-orders on your website allows your consumers to shop with you even if the unit is not psychically on your lot yet. Effective advertising is the key to getting your customers to pre-order units. Consumers searching for units could be deterred if not available on your site; however, advertising that you can pre-order a unit could ensure you don’t miss the opportunity to generate revenue for your dealership.
Source Used Inventory From Current Customers
Work directly with your customers to purchase their used equipment. This can benefit you by presenting the opportunity to secure units to resell on your lot, while offering incentives to customers who are looking to trade-in and upgrade to something new. Using this option to your advantage serves as an effective customer retention strategy as well. As you continue to purchase their units for resale, they can conveniently shop with you in the process.
Growth Opportunities in 2023
The outlook for the equipment industry is still positive with more digital tools and solutions becoming available to dealers, plus increased demand. Looking at the year ahead, Caterpillar dealers have found two additional areas for growth and success for their dealership.
Since market prices are highly dependent on demand, it’s critical to identify which units are most likely to drive interest from consumers so you are sourcing units that will sell quickly . There are a variety of resources you can use to figure out which units are most in demand, including trend reports, top categories, and OEM data. With demand subject to fluctuations, it’s important to understand this data and evaluate your strategy on a frequent basis. Not only will it allow you to capture demand, but it will also put you in the best position to compete in the market. We talk more on the current state of equipment demand here.
Recent legislation has helped to create increased and sustained demand for equipment for the foreseeable future. This has created the opportunity for dealers to capitalize on rentals. A recent survey of the Equipment Trader audience showed 62% of shoppers are seeking units for personal use, rather than professional projects. You can tap into this segment of consumers by expanding your inventory mix to include smaller pieces of equipment for personal use. Offering rentals at your dealership provides a solution for consumers who need short-term affordable options. This can be extremely beneficial for dealers because it is a supplemental source of revenue and offers convenience and flexibility for your shoppers.
Various Caterpillar dealers have faced the challenge of sourcing inventory when units are not widely available and were able to identify these helpful opportunities to expand their business in the coming months. Equipment Trader understands the impact that inventory issues can have on our industry so we have developed a buy/order product to help combat limited inventory. Make sure to check out our dealer resources for more helpful solutions and information.