By Bill Adams
What are mega-dealers? Where did they come from? Despite the term mega-dealer being around for years, to the best of my knowledge there is no definitive description of one nor has anyone attempted to define what one is. Mega can mean super, or extra-large, or mammoth. Perhaps a mega-dealer is the direct opposite of a small dealer; or maybe it is bigger than a mid-size dealer – whatever either of those may be. It really doesn’t matter what the definition is unless it is used derogatorily to belittle other dealers in the marketplace. That’s not right.
I don’t believe apparatus manufacturers have used the term mega-dealer nor have dealers called themselves one. Perhaps it was coined by writers. This narration is void of one-on-one interviews with people associated with the apparatus manufacturing industry and active apparatus dealerships. Why? Some manufacturers might not want to acknowledge a preference for mega-dealers. Some dealers may be apprehensive about being acquired by or even eliminated by a mega-dealer. Fire departments might not know the difference – but they might in the future. This article reflects my opinion and perception as a former participant and current commentator on the topics.
Dealers
For simplicity’s sake, a dealer or dealership is the person or entity that has an agreement with a manufacturer to sell that company’s apparatus in a designated area. Early dealer/manufacturer relationships were informal – similar to verbal handshake agreements. Later agreements were in writing; some were formal contracts. The type of agreement can become very relevant in the future as the manufacturer grows or is sold.
Manufacturers
The number of small apparatus manufacturers who by choice are content selling a certain number of rigs in a specific territory appears to be declining. There also seems to be a decline in the number of manufacturers that limit their product line to predominantly job specific apparatus. For years, trade magazines have addressed apparatus manufacturers that by design opt to sell factory direct. Some are reconsidering using dealers.
Comfort Zones
Some fire apparatus dealers are content selling a small number of rigs per year. That is not a criticism. Their primary business may be selling ancillary (loose) fire equipment in a small geographical area, often with a limited staff if any at all. They might reliably sell say a half-dozen or so rigs per year. They’re content, the apparatus manufacturer and their customers are too. People who enjoy the status quo shouldn’t be disparaged.
On the other hand, there are dealers who of their own volition want to increase in size, sales, and market share. That is their choice. They also should not be criticized for their business choices. Noteworthy is some choose expansion by choice and not necessity. Others may have expansion forced upon them. Apparatus manufacturers, like dealers, also have a comfort zone. Both dealers and manufacturers probably starting out as what I affectionately describe as “mom and pop” stores.
Times Are Changing
With few exceptions, old guard families and manufacturers whose names were on the rigs they built and places of business are gone. Some just closed shop. Others were absorbed by conglomerates and holding companies. Some became affiliated with large commercial truck manufacturers. Judgment is not being made. Observations are.
For decades, fire apparatus manufacturers have been amalgamating. Discounting profitability, the reasoning could include adding a complementary product line, eliminating a competitive manufacturer, merging similar sales forces, combining purchasing power or purchasing market share. It might be easy for two or more companies to merge that manufacture similar product. It could be challenging if the purchaser is an organization not familiar with the idiosyncrasies of the fire service and apparatus industry.
One preeminent apparatus manufacturer with roots going back to the mid to early 1800s was acquired by a holding company in the 1960s. After 20 years of turbulent times, including a reselling, it closed. It was reincarnated within a year by a heavy commercial truck manufacturer. About a dozen or so years of equally trying times, it was resold to another holding company and eventually was closed – assumedly forever.
Interestingly, another apparatus manufacturer around since the early 1900s was a mid-size builder when it was acquired by yet another heavy commercial truck manufacturer in 1996. Today it is generally accepted as the largest domestic fire apparatus manufacturer. An off-shore apparatus manufacturer formed legal partnerships with several domestic manufacturers eventually propelling itself into a major domestic player. Recently, a holding company acquired seven formerly independent apparatus manufacturers. The significances of amalgamating domestic and often small apparatus manufacturers into “big businesses” can be far reaching. Whether it is good or bad is strictly in the eyes of the beholders and not commentators like yours truly.
Dealer Impact
What is noticeable is the changing dynamics in the manufacturer and dealer relationships when manufacturers or dealers merge. There is no speculation, assumption or prediction that every amalgamation will cause smaller dealers to disappear and very large ones (aka mega-dealers) to become predominant. But there is a noticeable trend.
Computer savvy readers are encouraged to access the websites of various apparatus manufacturers and in particular their “Dealer Search” or “Find your Local Dealer” threads. Also check their “news” threads. Dealers’ websites will also tell what areas they cover. It appears the number of dealers is dwindling and many are increasing their assigned territories. Noteworthy is some successful manufacturers can cover the entire country with just a couple dozen or so dealers.
Not all participants want to address what can be a very sensitive topic to some of the players. Fire departments should be aware that when purchasing fire apparatus in the future, business as usual may change if the local dealer has been absorbed or eliminated – a topic that could be expounded upon later. Good luck. (To converse with the writer about this topic, connect through the web editor at [email protected])
BILL ADAMS is a member of the Fire Apparatus & Emergency Equipment Editorial Advisory Board, a former fire apparatus salesman, and a past chief of the East Rochester (NY) Fire Department. He has 50 years of experience in the volunteer fire service.
