Inventory Shortages?? What can I buy right now?

[Music] neil from messick's here coming from the wide open expanse of our front parking lot here at our elizabethtown store i'm sure many of you have learned by now if you've tried to buy a sheet of plywood or just about anything at this point that many supply chains out there for many businesses are extremely messed up and ours are no exception to that we've got a lot of really funny things going on with a lot of our vendors so we're gonna go walk around a little bit today show you some of the places that we're running short some of the places that we actually have equipment maybe help you understand a little bit what to expect out there if you go in and try to make a purchase of a piece of equipment here this year so out here in the front parking lots probably the most obvious visible example of where this has become a problem generally out here this time of year you're going to find three or four rows of equipment running end to end here probably the better part is 70 or 80 units out here in the front parking lot and you'll notice that it's basically empty now that's actually for two reasons one of which has been the level of sales most of our markets that are out there today are running at around 150 or so of usual sales are up significantly at the same time many of our manufacturers are having trouble delivering inventory to us at their regular rates so we have this case where sales are up and inventories are down and we just end up with this situation of an empty parking lot while i would make that statement broadly as being the case for most of the industry it's not for every manufacturer some have held up better than others some have had portions of their product lines hold up better than other portions of their product line so you can't really paint with a broad brush across the industry here of where the problems are you see though i've got quite a few new holland tractors in stock right now if you're looking for a utility tractor or a little bit bigger farm tractor there are some options out there for you today of machines that you'd be able to come in here see something on the lot and take a machine home with you in pretty short order that little bit bigger equipment for us has certainly held up better there's more inventory from say 60 70 horsepower and up than there is in the smaller equipment right now there is a little bit of a contradiction in that statement though right if sales are up and inventories are down how is this even possible what is it that people are buying the reality of it is today that most equipment as it's being delivered to us and we are getting more equipment delivered to us than we ever have before record amounts of stuff are coming in but what's happening is the stuff that's coming off those trucks like these land pride cutters here 50 or more of it is already sold before it even comes off the truck right so machines are coming in they're coming off the loading dock going directly into our shops in order to be set up and then going out to you and so places like our front parking lot despite the fact that we have this turn of inventory come in remain completely empty it's very difficult today to go out and walk into one of those lots and be able to stroll up and down a long line of equipment because there's just simply never anything sitting around here that's not sold everything just comes in and quickly goes out to customers again many times what we're doing when we have people show up here in our stores today is to take them not out to the front parking lot where new machines are sitting waiting for buyers it's to walk them back through our shops and into our done lots where the machines are waiting to be delivered to customers and we're showing that equipment that's on its way out the door in order to help somebody understand the purchase that they're going to make pick out their implements and their tractors ultimately make a down payment and then wait for that piece of equipment to come in with their name on it when it comes off the truck to turn around and go right back out the door again we're back out here in our front parking lot again and in most cases we could say the manufacturers of zero turn mowers have probably held up a little bit better than the manufacturers of other kinds of equipment that could be for a couple of different reasons the steel content in these machines is a little bit lighter it tends to be thinner steel there's less cost tied up in it steel markets have been all over the place many of our manufacturers have been giving us regular price increases because of cost and availability problems with steel but by and large these companies have been running maybe a couple of weeks behind on their deliveries and our inventory levels have been much more normal than what i would have expected and really holding up a lot better than what most of the broader industry has so in that consumer product space while zero turn mowers have held up really well utility vehicles from virtually every manufacturer are nearly impossible to find with people spending more time on their properties the markets for these machines have just exploded and they have flown out the door i've heard from some companies like this kubota sidekick right here that the remainder of the 2021 production is already sold out now that doesn't mean that you can't buy one that means the production from the manufacturer to the dealerships is basically all accounted for we've ordered everything that they can make for the next six and seven months and we're not even able to go into 2022 models at this point so definitely machines arriving this one has showed up on our parking lot here recently but utility vehicles are a tough go right now we've been hearing from our contractor customers that you guys are as busy as you ever have been before and that's leading to an increase in the demand for construction equipment so excavators skid steers wheel loaders track machines all that kind of stuff there's just been a huge spike in the demand for as everybody is getting back out to work and starting all their construction jobs again that's also led to an increase in demand from rental yards as well those places the rental houses that you go to in order to rent a machine for a job their inventories have been run down also so there's a lot of demand out there for construction machinery right now as far as lead times and stuff goes for this equipment we have a little bit on the lot we have had a handful of machines around it's been a pretty low level of inventory certain ones are pretty tough to come by and if you're looking for one of those more common harder to get models going into a dealership and putting down a deposit on that machine and having a retail order in the computer makes all the difference in the world when you're talking about expensive equipment like this the manufacturers want that stuff off the books and out to you as quickly as possible and so putting in retail orders for that kind of stuff really shortens the amount of time that you will wait to get that machine to your door to find this much grass at this store is a real anomaly it tells you that something is wrong right we really struggle to pack the amount of equipment the amount of inventory that we generally carry into these spaces and when you end up with this much free space down here it tells you something is awry the the market for used equipment again just like the new stuff has been extremely strong and we're definitely seeing a very high rate of turns as soon as new stuff comes in we're seeing often times one to three days in many cases where the attractive stuff is having a buyer on it almost immediately subscribing to the emails that we do of the daily used equipment of the stuff that's hitting the ground really is the way in order to really know what's coming in if you're watching for a piece of equipment because the good stuff is just getting snatched up like that there are definitely places where you do still have some selection we're in pretty good shape on used disc pines right now going into hay season there's a round baler a rake or two around skid steers there's some a little bit of selection there tractors though very very little to pick from as far as tractors go excavators are very much the same way i think we have one used one right now across our stores and for us that's if we look at the financial side of the dollars that are on the books right now we are carrying about 40 percent less used equipment than what's typical for us so we've been doing our best in order to pull as much of that in from other places looking out to auctions or buying consignment units and that kind of stuff to try to develop some inventory for you to have things to choose from but i'll tell you it is just a wild world right now with used machinery and while i told you under 50 horsepower tractors had been one of the biggest problems this year here i am standing in front of a couple of under 50 horsepower tractors just sitting around in their crates right clearly there should be a home for these machines while we're starting to build a little bit of inventory again on these small tractors the thing that we're not getting in is the implements in order to put on them so tractor inventories are starting to creep up a little bit but getting a complete package together of a tractor a loader a mower deck a backhoe if you wanted any of the hydraulic accessory kits all the things that it takes in order to make a complete transaction that we can send out to you still remain very difficult so in many cases you'll see inventories sitting around dealership lots at this point that are probably sold more than likely but just waiting for all those other ancillary pieces in order to be able to put together a complete tractor and actually make a transaction with an end customer if i've got one bright spot for you it's been that the parts supply chains this year have been in surprisingly good shape now i'm not going to sit and tell you that every part number and every skew that's out there is still readily available obviously that's not going to be the case there are certainly some pain points out there but by and large i think it's safe to make the broad statement that parts supply chains in this season have been dramatically better than what they were at this year last time if you think about doing business back in april last year where businesses were shutting down and and people were being contact traced regularly and that kind of stuff it was hard for our manufacturers in order to operate a facility with hundreds of people inside that picking and doing distribution right we struggled many times ourselves doing that kind of thing but a year later now those facilities are staffed better than what they were and those supply chains are operating much better going into this season than what they were going into the last one so that's one place that we definitely feel very very good about right there's been some legitimate improvements there and support supply chains have held up better than what you would probably expect right it's when you go into that tractor and they need to make that piece of equipment and there's say 1500 parts on the whole machine and it really only takes one of them in order to screw up an assembly process but if those 1499 parts are still available they can be in our warehouses and they're they're available for you if you have some kind of need for an existing piece of equipment if you look at the bill of materials for a piece of machinery or an attachment the more steel makes up the total cost of that bill of materials the more than likely the more difficulty that manufacturer is having right now steel demand has been really high the price of it has been moving rapidly supplies or dwindling i've heard from some guys that operate machine shops that they're having hard times getting deliveries in and that's certainly causing some disruptions with things like buckets and that kind of stuff for us those manufacturers are having a hard time getting enough raw materials in order to be able to meet their end products and we're getting usually some fairly regular price increases from those companies i've seen upwards of 15 percent on some of this stuff now they're having to up charge in order to cover the cost of those raw materials moving all over the place now this is not the first time that this has happened we've had steel surcharges and trucking surcharges and years gone past i'm pretty optimistic that hopefully those are going to be temporary increases that as these things start to come back again we start to see these prices creep back down again but unfortunately things like buckets and that kind of stuff they have been a little challenging to get lately can never paint with too broad of a brush on this stuff right so while steel is an absolute problem it's not necessarily felt the same by every manufacturer if i kind of again painting with a broad brush which gets you in trouble more than likely the bigger a company is the more difficulty it is that they're having that's how it's felt to me our smaller vendors like vernig or in many cases brad co have done a pretty good job of continuing to get good implement supplies in here and we've been pretty happy vernon's been getting us all these grapples and stuff that we've been selling lately a lot of the skeleton buckets behind us you know things with high steel content but still some of these companies have been able to pick up the slack better than other ones have and the pain is not felt equally across every supplier and if you're one of the ones that's able to meet this demand my goodness i'm thinking these guys are going to have a fantastic year if they're able to find ways in order to make it work so i'm guessing nothing that i've shared here is probably too much of a surprise to any of you you probably have encountered several industries by this point this far into coveted recovery that have been having some supply issues and some difficulties and we're no exception to that right it certainly happened here as well i could give a little bit of advice out there if you're looking at making some purchases this year by and large i would say many people are coming in and still having a fairly regular purchase experience where you can come in and find implements attachments parts service that kind of stuff that's going to feel pretty normal we absolutely do have the other extreme where we've had people waiting five and six and seven months in order to get machines that they may have ordered and paid for even as far back as december at this point that we're still waiting to get in and get out the door there are some real pain points out there there's a couple of things that you can do in order to make your experience better right if you're able to go through and figure out what it is exactly that you need and you've started the research project process before or you could come in and see somebody else's piece of machinery that's headed out if you make a purchase it will put a down payment on a machine and we can go into our various manufacturers ordering systems and mark these orders as retail basically telling the manufacturers that they're going to be paid for as soon as they hit our loading docks those orders are generally prioritized and we're seeing in many cases that equipment can be ordered and marked retail and set up and got out to in many cases four to six weeks now there's going to be people get frustrated at me for saying that i think that's probably about the average weight at this point for ordering things in there's going to be exceptions to that there's going to be outliers you will have people that are waiting what is to us and you probably wholly unreasonable amounts of time but we shouldn't be all doom and gloom about this right our empty parking lots are a side effect of all these things that are happening and like i said at the loading dock before we are still operating at a situation here where record amounts of inventory is coming in record amounts of inventory is being turned around and sold again it just doesn't necessarily feel like it we feel like we have this huge problem because of our empty front parking lots and our low inventory levels of standing available inventory but record amounts of business continue to happen in this industry if you watch industry news of the stock reports of all these publicly traded companies every one of them is reporting sales and revenues up 15 20 25 30 percent so some things are obviously going right in a lot of cases right now we're able to service many of you very very well but just come in here with an extra level of patience now and know that there's a lot of frustrations out there we're waiting for things that we shouldn't be and it's no more fun for us than it is for you i'll guarantee you that so if you're searching for a piece of equipment i think i've showed you here there's stuff around that we have to service you and help with and we're really good at having the logistical stuff down within our dealership of pre-selling and getting names on things and getting the logistics down to get you that equipment as quickly as possible so if you're shopping for a piece of equipment and give us a call here at messick's we're also available for any of your parts or service needs give us a call at remains 800-222-3373 while all the machines that are here for you to buy are being ruined by this forklift that's driving by

Channel: Messick's Equipment

Views: 52,370

Keywords: Messicks, Kubota, new, holland, caseih, case, krone, farm, equipment, tractor, tractors, farming, farminglife, construction

Id: 09FV1JIhJSI

Length: 16min 23sec (983 seconds)

Published: Mon Jun 28 2021