Even In Downturn, Creative Equipment Merchandising Brings In Big Profits
Several construction equipment producers experiencing dips in demand have resorted to creative measures in order to boost revenue and spread brand equity. Logo merchandising, common to manufacturers promotional budgets for decades, is working its way more and more into the retail side of the business, and the numbers are staggering.
"Margins in the retail sector can be very good. If you get it right, it is far more profitable than manufacturing a wheel loader," says David Phillips, managing director of analyst firm Off-Highway Research in London. Phillips says that on average, equipment manufacturing only leaves producers with slim 2-3% profit margins, whereas retail merchandise broadens margins to 15-20%.