Operators have focused on providing superior customer service, concentrating on business as opposed to retail.
New York, NY (PRWEB) August 30, 2014
The Farm, Lawn and Garden Equipment Wholesaling industry primarily sells specialized machinery, equipment and related parts, including tractors, tillers, plows, sprayers and lawn mowers, used in agricultural activities. In the five years to 2014, increasing residential renovation expenditure and demand from crop production helped drive industry growth after the economic downturn left industry operators with declining revenue. The industry, however, continues to face significant pressures from wholesale bypass (i.e. when buyers source directly from manufacturers to cut costs), which paralyzed revenue in 2013. Revenue in the Farm, Lawn and Garden Equipment Wholesaling industry is expected to increase at an average annual rate in the five years to 2014. This includes an anticipated drop in 2014, as the increasing prevalence of wholesale bypass offsets stronger demand from the farming sector.
While demand for industry products is growing, wholesaler revenue has been tempered by the practice of wholesale bypass. According to IBISWorld Industry Analyst Sally Lerman, “To counteract lost revenue from wholesale bypass, industry operators have focused on providing superior customer service, concentrating on business as opposed to retail markets.” In the past five years, the industry has benefited from an expansion of planted acreage of corn and soybeans used to produce ethanol-based biofuel, fueling capital investments in the farming sector.
Profit has also risen from recessionary lows due to a relaxing financing environment and the recovering economy enabling farmers to increasingly make capital purchases, driving up profit. However, profit is not expected to return to prerecession levels as downward price pressure from the threat of wholesale bypass has thinned out operators' bottom lines.
In the five years to 2019, the industry is forecast to continue on its upward trajectory. “Rising per capita disposable income and consumer confidence will help strengthen residential renovation expenditures and demand from crop production to spur demand for lawn and garden equipment,” says Lerman. However, price pressures will likely continue as the threat of wholesale bypass lingers. As a result, the number of industry operators is projected to only marginally increase in the five years to 2019.
For more information, visit IBISWorld’s Farm, Lawn & Garden Equipment Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry primarily purchase specialized machinery, equipment and related parts used in agricultural and consumer segment activities (e.g. farm, lawn and garden). This equipment is then sold to downstream markets, namely farms and other wholesalers that make them available to end consumers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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