Considering an AGCO dealership

Could be beneficial and could be a bank breaker. Local Deere dealer family was getting pressed on increasing the ‘Floor Plan’ investment to have more equipment on the lot for sale they may not have been able to move so readily. Cost was to bump a Million and not affordable. The family sold to consolidate with another dealer, not been the same since.

Well I admit I have 0 firsthand experience, but from my observation of how the major company dealerships are evolving, I can’t imagine they would even entertain your proposal.

My thought would be start a private used equipment business, repair included. Market yourself as “Specializing in Agco and Agco Legacy products”. Maybe tack on All Brands Welcome “ if it suits your fancy.

AGCO has 2 tiers of dealers. CUE - under 120 HP and some other lines that go with it, and the Full Line dealers.  First of all, do you have a net worth of 2 million and 1/4th of that liquid ? Second get a 'Cost of Doing  Business Survey' for Farm dealerships. Look at the bottom line. You can make more putting your money in CD's. You will have to have an approved facility - they are concerned about image. You will have to have techs who can test out or spend a lot of time in training as will you and your parts person. You will have to have a computer/book keeping system that will be expensive as well as access to an IT person or company. $10,000 sign. State sales tax, payroll tax is a top priority - they will put you out of business quicker than the IRS. Insurance - figure about $50,000 / year for a small dealership. Bank floor plan of half a million - equipment comes due and has to be paid.  You will have to deal with short lines - no mfg builds all needed for what goes with the tractors.  Service vehicles, fork lift, delivery vehicles - shop equipment, about $100,000. Special tools - about the same. EPA and disposal permits must be investigated. Shrinkage, "where did those 2 disc blades go ? The inventory said we had 3 bearings - there are only two - where did the other go? etc. IT HAPPENS" - abut 1% - no one is perfect. Then you get those customers who have a lawyer on retainer.  And finally one gets to work 60 hours a week to manage all that for a 3-5% ROI.  I have been doing this for 47 years - I am a gearhead, love fixing issues, love farmers - consumer side - not so much - grew up in the business when $ investment was not what it is today. I will not let my kids in the business - I could get arrested for child abuse. :-)   Other than all this, I enjoy the rewards of helping others in parts, sales and service. Just not quick monetary rewards. There is a reason for mega dealers - there is the assumption bigger is better. AGCO has Ag Rev - company stores - for a reason.     

Edited by tbran - 06 Mar 2025 at 8:28am

Alex09: There is some really valuable advice noted by the previous posters.  It looks like AGCO is parked at #4 as far as the Ag. Tractor market behind #1 CNH Industrial NV,  then Deere, then CLAAS.  

They are forcing the last remaining family owned dealers out around here and replacing them with Ag Revolution corporate stores. 

Deleted - Posted Erroneously.

Edited by WF owner - 07 Mar 2025 at 5:58am