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Becoming A Dual Line Distributor

Since 1944, Arnold Machinery Company focused on selling one primary line of new equipment-forklifts from Hyster Company. That relationship has been great over the years, but now the rules have changed. NACCO Materials Handling Group, the holding company that owns Hyster and Yale Materials Handling Corporation, decided, late in 2009, to allow interested distributors to sell both brands through one dealership.

From Arnold’s perspective, this was welcome news. NACCO combined ownership of Hyster and Yale back in 1989. We just felt that selling both lines would be a more efficient way for us to operate. As soon as we were given the opportunity to do so, we moved aggressively to get it done. In our case, that meant contacting Baton Rouge, Louisiana-based H&E Equipment, the longtime Yale dealer throughout much of our territory.

Rex Mecham, president of the material handling division at Arnold Machinery Company, now has responsibility for selling both the Hyster and Yale forklift brands.

On August 1, we officially became the Yale dealer in Utah, Arizona, Colorado, Wyoming and parts of Idaho and Nevada. Luckily, we were able to take on all this additional business without needing to add real estate. Everywhere that we purchased an operation from H&E, we were able to roll it into one of our existing operations nearby. We did add some of H&E’s Yale salespeople in Utah and Arizona and some technicians in Arizona locations. All told, we probably added about 50 employees to our workforce. Overall, the transition has been very smooth. Although we didn’t generate all the business that we anticipated, it’s given us a real shot in the arm throughout the whole territory.

We believe that becoming a dual line distributorship will provide numerous benefits for us going forward. First and foremost, we are no longer competing with another dealer who is trying to sell a similar product. Part of my commitment to NACCO in taking on both lines is to ensure a good market share on both product lines. Obviously, this would be more difficult with another competitor in the marketplace.

In the current down market, our unit sales are down, but we are hopeful about the opportunity this new arrangement gives us to increase our parts, service and rental business. Customers who have historically gotten service from the authorized Yale dealer now will come to us even if we didn’t sell them their equipment.

Other NACCO dealers are also taking on the responsibility of marketing both the Yale and Hyster lines. It’s conceivable that other manufacturers may also make similar arrangements with their dealers in the not-too-distant future. To those distributors, my advice is to do all you can to make it happen if you think it will benefit your dealership. Don’t get hung up on the price of the business if an acquisition makes sense strategically. If it’s going to grow the business, do it. In today’s market more than ever, you have to grow or go out of business. I believe it is dangerous practice to pull in your horns during a recession.

Material Handling Equipment Distributors Associtation
Rex Mecham

Meet the Author
Rex Mecham is president of the material handling division at Arnold Machinery Company, located in Salt Lake City, Utah, and on the Web at www.arnoldmachinery.com.

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