|Last Quarterly Update:||4/8/2013|
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Companies in this industry distribute farm equipment, lawn and garden equipment, and related parts. No major companies dominate.
The US farm and garden equipment wholesalers industry includes about 6,000 companies with combined annual revenue of about $55 billion and is expected to grow at a high rate over the next two years. Key growth drivers include rising demand for small tractors and precision farming equipment, as well as expanding service offerings.
This industry includes manufacturers' wholesale sales branches, as well as retail dealers in farm equipment, which are grouped with wholesalers because their products are sold primarily for business use rather than personal or household use. Retailers of lawn and garden equipment are covered in the Garden Centers & Farm Supply Stores industry profile.
Demand is driven primarily by the health of the farming sector, which is tied to crop prices and yields. The profitability of individual companies depends on good merchandising and efficient operations. Large distributors have few economies of scale but can offer customers a wider range of products. Small distributors can compete successfully by holding exclusive territory rights to popular products. The industry is fragmented: the 50 largest companies generate about 40 percent of revenue.
Large manufacturers of farm equipment, like Deere and AGCO, mainly bypass independent wholesalers and use their own wholesale sales branches to sell directly to networks of local dealers.
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