Niels Andrews – Costal Tractor (Ex Eco-Dan dealer, Ex Trimble dealer).
(831) 595-3233 - cell
Interviewed by Jorge Heraud 2/4/2011
{I’ve know Niels for a while. He is well known in the Salinas Valley. He is an innovator and knows farmers and their challenges very well. He was the first dealer for Trimble’s automatic steering products, selling the first systems 10 years ago. A few years back he associated with others to represent and sell Eco-dan, a visual implement steering system to help farmers weed very close to the plants. Now he works in Coastal Tractor a Case and New Holland dealer with 3 locations}
Has been thinking about this problem for a while. Has seen several systems.
Weeding and thinning have been attempted.
Knows that T&A tried it a few years back for thinning. They spent $1M but the end result wasn’t good enough. They tried it using a green seeker looking for plant.
Blocker knife system from John Deere.
Maybe you can change the way beds are done to make the problem easier.
In Europe there is almost no labor to do this. Automation is further along in some places like Netherlands.
In the US, a few years ago when construction was booming there was almost no labor to be found for Ag.
Now there is plenty of labor, but that will be change again. This is a good time to start working on this.
It’s a great project, green solution, non-herbicide dependent.
It will require 4-5 million to do it. 1 was not enough for T&A. Sources of money: Green organizations have money too.
1. Please describe your relationship with manufacturers:
a. How do you decide what equipment you will carry?
Look at customer demand.
Is it good business. Is the manufacturer going to be there for a long term. Is the company going to support the product if there are problem.
Dealer are used to selling iron. Selling SW is harder / intangible for them.
b. What kind of margins do you get on the equipment?
It depends… 25-30%. For these margins dealer will commit to train their people and to provide first level of support.
c. Do manufacturers offer you other discounts or incentives?
Yes. It’s determined by supply and demand.
The most important thing is the product needs to be good.
Price it fairly is best. Deep discounts don’t work well as everyone finds about this, and it’s the same lowering the price but with less transparency.
d. Do you have buy-back agreements with the manufacturers?
It depends. Moving towards JIT inventory. No-one wants to own it. Dealer usually ends up owning it.
Sell a box with no brains and then sell the SW later. That way inventory costs are lower.
e. Do you have exclusivity arrangements?
What is most important is the manufacturer doesn’t sell directly. It undermines the dealers.
What has been working is revenue sharing when selling with outside your dealers territory. This tends to regulate things pretty fast.
Dealers need to support their products. This is critical
f. What type of dealer is best for this product (tractor, implement, inputs, service providers)?
Tractor dealers are best. They have deeper pockets and understand what is needed {note he is working for a tractor dealership}
2. Please describe your relationship with farmers:
a. How do you get an understanding for what equipment farmers want?
Talking with them.
b. Do you host demonstrations?
Yes.
c. Do you attend agricultural shows?
Yes. Going to WAE on Wednesday.
d. Do you provide service/maintenance for equipment?
Yes. This is key.
3. What is your advice on how a new company producing an innovative product can sell equipment to farmers?
Sell through dealers. Have product that is good and works.
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