Mini Skid Loaders

For some dealers, restricted by geographic boundaries and limited marketing budgets, increasing sales to existing customers is the most feasible way to grow. The trick is selecting the right products that enable you to offer your customers "more" while also providing a nice return on your investment. If preceded by a thorough analysis of your market, careful examination of potential vendors and the preparedness to go all-in, the mini skid loader could be a product category worth branching into.

The concept of the mini skid loader, also commonly known as the compact utility loader, dates back to the late 1970s in Australia. In 1982 Canadian-based Leon Mfg. (Ramrod) struck up a licensing agreement with one of those Australian manufacturers and brought the product to North America. John Malinowski, Leon Mfg.'s vice president of sales and marketing, says the mini skid loader really started to take off in the U.S. in the late '90s when those licensing agreements expired and more manufacturers began delving into this unique product category.

Jon Kuyers, compact solutions manager for Vermeer Mfg. Co., says the marketplace has grown substantially over the last few years with the increased investment in housing—and subsequently landscaping. The end-user's desire for greater versatility in a piece of equipment has also fueled demand. The mini skid loader provides an alternative solution to manual labor by bringing a wide range of attachments into confined and weight-sensitive work areas.

DO YOU HAVE THE RIGHT MARKET?

Before you determine if the mini skid loader is a good fit for your showroom, you must first determine if you serve, or have the potential of serving, the types of customers that are the likely buyers of this product. Karrie Crocker, marketing manager for Compact Power Inc., says the mini skid is ideal for anyone seeking labor- and time-saving solutions.

For the typical outdoor power equipment dealer, landscape contractors likely present the greatest "immediate" opportunity. But even if you're a commercial dealer with an adequate base of landscape customers, that does not automatically mean the mini skid loader will be a sure-sell for your sales reps.

"The design-build landscape contractor is the primary user of the mini skid loader," Kuyers points out. "Whether his business is large or small, this contractor is looking to increase productivity and reduce manpower requirements due to competitive pressure and rising insurance costs. Depending on the future utilization rate, the contractor will either rent or purchase the unit."

Landscapers aside, many other customer segments may also present ample opportunity for you, including:

• Building contractors
• General construction
• Property management organizations
• Apartment and condo complexes
• Garden centers and tree farms
• Stone retailers
• Golf courses
• Cemeteries
• Municipal
• Irrigation
• Fencing
• Farmers or ranchers
• Landowners
• Do-it-yourselfers.

"The numerous attachments that are now available have helped open up other markets," Malinowski points out. "If a dealer's interested in diversification of market and/or product line, and wants to have a profitable line that's not being offered by every Tom, Dick and Harry, the mini skid loader is something worth considering.

"A dealer who's willing to stock a variety of attachments could open himself up to 10, 20 or even 30 different markets," Malinowski continues, "helping bring business through the door from people he's never seen before. All the same, we still have many successful dealers who focus on just one market."

WORTHY INVESTMENT?

If you've determined that you indeed have a market for the mini skid, now it's time to evaluate the potential of that market and how it translates into a return on investment for your dealership. As is the case with most heavy machinery, a fair amount of capital is needed to sustain all of the required support functions of the mini skid loader. Kuyers identifies a series of questions dealers should ask themselves before investing in a line:

• Do you have the skilled technicians needed to diagnose and repair this type of machine after it's placed into use? As is always the case with professional customers, uptime is critical in maintaining productivity.
• Do you have mobile service capabilities if a customer's machine goes down in the field?
• Can you afford to stock the necessary interchangeable attachments for customers to purchase or rent? In many cases, the attachment inventory cost may be equal to or greater than the cost of one machine. Popular attachments include backhoes, landscape rakes, augers, trenchers, tillers, vibratory plows, assorted buckets, plate compactors, tree forks and more.

"All of these items have direct costs," Kuyers points out, "so a good business plan is definitely needed before the investment should take place. If the expected sales of the machine, attachments, parts and service don't provide an acceptable return, it's probably not a good idea to take on a mini skid loader line. A dealer can ruin good relationships with existing customers if that dealer is not going to support the product for the long haul."

In order to support your customers, you need the support of your suppliers. Kuyers says you should evaluate the strength of the manufacturer before taking on its line. Is the manufacturer financially stable? Is it developing new and complimentary products? How many other dealers does it have and how many are close to or within your servicing geographic location? Don't be afraid to ask the manufacturer if you can talk to some of its existing dealers.

A good vendor will also help you develop your market as you take on its line. For example, Crocker says Compact Power always provides product training upon delivery of the unit. The rep will walk the new dealer through every aspect of the unit from top to bottom, and review how the unit compares to other units in its class. "The rep is also willing to accompany the new dealer on initial demonstrations in order to increase the dealer's comfort in machine operation, while also helping sell the key features of the unit," Crocker explains.

Malinowski says Leon Mfg. provides factory training to dealers, and will also provide training right at the dealership. "Sometimes we'll even bring dealers to our factory and put them on the assembly line," he relates, "giving them a better understanding of how the machine is built.

"People sell what they know," he continues. "Until you invest in the product and service education, it could be an uphill battle. Once you learn the machine, you'll have confidence and can really go to town. You also need a commitment to go out and demo the product. You can't sit and wait for the business to come to you."

Branching into a new product category can be an effective way to increase sales to current customers—while even capturing some new ones. With applications in a wide variety of commercial markets, including landscape, the mini skid loader could be a logical addition to your showroom. Just make sure you do your homework first, are prepared to fully support the product, and align with a manufacturer that's prepared to fully support you as you take this new product to market.