How farmers buy and sell used farm machinery and equipment (FME) is changing due to internet transactions of used FME or farmer opinions of key players in used FME markets such as dealers or auctioneers. Brian Roe, Marvin Batte and Florian Diekmann of Ohio State University led an effort to learn more about U.S. farmers' attitudes and opinions about sales via auction, dealer, classified ad and the internet.
The researchers asked more than 5,200 U.S. farmers about used FME markets during early 2010. More than 2,500 (48%) responded and gave information about recent used FME transactions, ratings of different ways to buy and sell used FME and attitudes and opinions regarding local FME dealers and used FME auction venues.
They found that U.S. farmers were active in used FME markets with 69% purchasing and 40% selling (not including trade-ins) used FME within the past 5 years. Most buyers of used FME bought from dealerships (55%), while other popular purchasing venues included auctions (16%) and classified ads (10%). Less than 5% bought from auctions or ads over the internet. Most buyers felt they paid fair market value (83%) and felt certain about the quality of the item before they took possession (94%). Internet buyers were less likely to say they got a fair deal but were similarly certain of the quality of items.
Most sellers of used FME relied upon personal contacts or simple for-sale signs to sell their equipment (43%), with auctions (22%) and classified ads (22%) being the next most popular mode of sale. Less than 5% of these non-traded used FME items were sold via internet. Most sellers (87%) also felt they received fair market value for their items, including those who sold via internet. When asked about the degree of satisfaction they had with all components of the selling process, those who had sold via internet classified ads reported the greatest satisfaction.
All respondents then rated five different ways of buying or selling used FME: dealership, auction, internet auction, classified ad and internet classified ad. Prospective buyers had the most favorable impressions of dealers and the least favorable impressions of internet auctions, while prospective sellers had the most favorable impressions of classified ads and the least favorable impressions of internet auctions. Despite these unfavorable impressions of internet venues, 55% of prospective buyers and 71% of sellers might consider using internet classified ads in the future.
The study also asked about the number of local FME dealerships that farmers had done business with during the past 5 years and the quality of the relationship the farmer had with the dealership that was most integral to current farming operations. More than 80% had done business with at least two dealerships while 26% had done business with four or more dealers. However, there were regional differences, with farmers in the South and West listing fewer dealer relationships than farmers in the East or Midwest. Most farmers were pleased with the repair and parts service provided by the local dealer (88%) and with how they were treated during sales and trade-ins (77%). However, nearly one in four farmers felt that the business relationship they have with their closest dealership could be in jeopardy if they ‘shopped around' to other dealers to get a better price.