Episode 127 – Factory vs. Independent
In this episode, I was joined by Dave Baiocchi for the December 2020 Material Handling Wholesaler cover story entitled “Factory Stores Coming to the U.S.?” We discuss factory stores vs. independent dealers, how the business model is changing, why it is changing, and what it means for customers.
- As we have been exploring some different topics with our Material Handling Wholesaler partnership I have been learning more about the world of material handling equipment dealers. With this episode, we learn about the differences between factory stores and independent dealers. Factory stores are owned by the manufacturer of the equipment whereas independent dealers are not owned by the manufacturers. Historically the majority of the business has been independent dealers but that has shifted in recent years and Dave explains why that has been happening.
- Dave discusses some of the challenges that the OEM’s go through when they try to open factory stores. He explains how the manufacturers are more geared towards manufacturing only and providing parts so to shift and have to be more customer-facing becomes difficult. It presents the challenge of trying to properly service their customers and understand the relationships that need to be built there. He puts it perfectly when he says that they need to become more nimble than they have in the past.
- So what does this mean for the customer buying from a factory store or an independent dealer? As we take a look at some challenges OEM’s have when it comes to opening these factory stores, the service is what is difficult for them to handle. With the reality of service potentially being worse with a factory store, it might be in the interest of the customer to stick with an independent dealer. Especially in times where budgets are tighter, you want to be able to rely on your dealer to provide a high level of service so that your equipment will continue to last longer. Preventive maintenance is key and you need to weigh your options to ensure you will have quality service to prevent downtime.
Listen to the episode below and let us know your thoughts in the comments.