December 17, 2010
Staying power
After a tough year, Don Nebelsick's ag tire sales finally are loking up. Here's why!
By: Mike Manges
Don Nebelsick, co-owner of Don’s Tire & Supply in Abilene, Kan., has been forced to pass extra costs associated with farm tire price hikes to his customers. It hasn’t always been an easy task.
Last year was challenging for Don Nebelsick, co-owner of Don’s Tire & Supply, a two-outlet farm tire dealership in Abilene, Kan.
For the first time in many years, his farm tire sales took a step backward, and the negative momentum carried over into 2010.
For a dealer who derives nearly 30% of his overall revenue from farm tires, it wasn’t the best of times.
Fortunately, things have improved since then as Nebelsick’s ag tire sales have rebounded. In fact, they’re up 15% vs. 12 months ago. How did Nebelsick’s small but thriving dealership get from there to here? Through salesmanship and good, old-fashioned service, he says.
Pricing: up, up and away?
A number of factors contributed to Nebelsick’s sales decline last year. For one, the ag tire shortage that marked most of 2008 continued well into 2009.
On the end user side, no-till farming — by which tractors chisel the soil’s surface rather than plow deeply — has become more prevalent in his area.
No-till farming “takes hours off of tractors and equipment, which translates into less wear for tires,” he says.
Crop prices were “as good as they’d ever been” in 2008, according to Nebelsick. However, they took a dip in 2009. “That hurts available cash for someone who needs to replace their tires.”
At the same time, ag tire manufacturers have implemented price increases. Nebelsick says the prices for his ag tires have risen 30% to 35% over the last three years. This was not totally unexpected, he adds.
“Prices stayed so level for so long, and manufacturers didn’t raise any prices. Then all of a sudden it was, ‘Guys, we have to do something. We can’t keep doing this. We have investments to make. We can’t sit here and not make a profit.’”
As a businessman, he says he understands why manufacturers had to raise prices. However, some of his customers haven’t been quite as understanding.
Several customers expect to pay prices that haven’t been seen in a number of years, he adds. “Prices stayed the same for so long that it became imbedded in their minds. Some of them think you’re trying to get rich off of them. We have to explain to them that our costs have increased.”
After he explains the situation to them, most customers come around.
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