Discussion:
Buying Out Forklift Dealer

The company I work for has been considering purchasing a forklift dealer for a bit now and we are now trying to see if it makes sense and if we can make this a reality. We have operations in several locations in US/Canada and own several hundred forklifts and other equipment. New and used equipment has always been purchased on a cash basis but like most companies we are always looking for ways to be more efficient.

The intent would be to use this as an avenue to bring down our operating costs in our core business but keep the dealer as a stand alone company as is. A major question we have is how do most of the bigger name brands handle territories and jurisdictions of sales? For instance, if we buy a dealer in state "x" the intent would be to buy all of our parts from this branch (or what's reasonably possible) and all new capital purchases to get them at a "true cost." Would our dealership in state "x" be able to make purchases and send them to the other states/locations without causing problems with the local dealer in the receiving area? Most of our fleet is composed of Hyster for the smaller forklifts and Hyster/Taylor for our large lift trucks.
  • Posted 28 Apr 2020 14:11
  • Discussion started by Chris_D
  • Louisiana, United States
Chris
Showing items 1 - 5 of 5 results.
All the manufacturers have tried this in the past and most lived to regret it.
Menards in WI I think was set up this way for LInde.
Parkway Systems in San Antonio was owned by grocer HEB, they finally spun out to Darr this year I think.
Kenco Logistics owns Kenco Toyotalift, they used to have a bunch more branches, now just down to a few so you kind of see how Toyota felt about that.
I think TCM did it a few times too.
Manufacturers don't just sign people up and say boom you're a dealer. They want to understand the ownership structure, what the plan is to support the brand, even what the succession plan is if the owner dies (they want that in writing). So even if the thought is the just keep the company "as-is" with an upstream owner, any manufacturer will really want to understand what the game plan for growing market share in that territory is. Do yourself a favor and just grind on the manufacturers and dealers to get better prices. Run from this dealership idea.
  • Posted 1 May 2020 00:12
  • Reply by chuck_s
  • Indiana, United States
Thanks for your response.

We will look into both options as buying out a dealer, and continuing to run it as is, would not be an issue for us. Now getting approval from the manufacturers to do so I guess would be another scenario. But at the end of the day we are looking to get more cost savings on our parts and purchases however is needed.
  • Posted 30 Apr 2020 04:05
  • Reply by Chris_D
  • Louisiana, United States
Chris
Yes that is correct. If you buy out a dealership you have to serve the entire customer base , not just your company. Some times referred to as national accounts. Headache or lower costs I do not think the headaches will off set the lower costs. If you have a large enough of a truck fleet they will deal with you. Mfgs really do not like to have an end user as a dealer.
  • Posted 30 Apr 2020 04:01
  • Reply by triumphrider
  • Texas, United States
If I understand your post correctly we could apply for a "factory account" (with say Hyster) and get discount pricing on parts, units and attachments that we buy? This would be an interesting option if the discounts are enough to offset the risk of trying to buy an established dealer.
  • Posted 30 Apr 2020 02:37
  • Reply by Chris_D
  • Louisiana, United States
Chris
Most mfgrs frown on this. I know of a grocery store chain in south texes that tried to do just that They were turned down flat. Mfgrs have franchise areas that only allow factory accounts to sell to customers in other areas. There is usually a profit split when they do. About the only people who would do this are the China based mfgrs. Deal with them and you will get the real meaning of true cost. Your best bet would to get a factory account status. units and parts are discounted ,and you would have factory support. A factory account also has to follow pricing guide lines established by the mfgr reguardless of the location.. You would not have the headache of running a dealership as you would have to sell to everybody who wants to buy the brand of units you want to sell.
  • Posted 29 Apr 2020 20:17
  • Reply by triumphrider
  • Texas, United States

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