How some equipment dealers became ‘mega dealers’

Kimball Equipment Co. will be celebrating 80 years in business in 2026.

The third-generation, family-owned company has evolved into one of the largest equipment dealers serving the aggregate industry, with 13 locations across seven Western states. The company’s massive territory didn’t emerge overnight, though.

Like many other dealers whose size and territories have grown, Kimball Equipment began small.

“When Kimball Equipment started, it was in a ‘broom closet’ in the back of some store in downtown Salt Lake [City],” says Kirk Rainbolt, who serves as CEO of the company today. “It was a couple of guys just putting everything they had into a business, going out every day and figuring out how to sell equipment.”

Flash forward nearly a century, and it’s not uncommon for a dealer that once covered a single state or a small region to serve a swath of the U.S. And while a dealer business in 2024 can take on a variety of models, the mega dealers out there are probably here to stay.

If anything, the industry’s biggest dealers will probably only get bigger.

“Customers are pushing for it,” says Rich Blake, the president and CEO at Mellott, when asked why today’s dealers are getting larger in size. “They want better service – which includes more service. They want better parts availability. They’re concerned about the supply chain, and they have globalization concerns.”

Growth drivers

As some aggregate producers have grown, a number of dealers have expanded their reach to keep up with customer demands.

“The larger customers want consistency,” Blake says. “They want the same level of service in Tennessee that they expect in Pennsylvania or New Jersey or North Carolina or Georgia. They’re expecting the same consistency with the experts – the people – as well as the response.”

A dealer’s size matters when it comes to providing equipment and parts, Blake adds.

“The size of the businesses has to be larger in order to make the commitment to the inventory,” he says. “We have to be able to deliver on our promise, and our promise is our brand that we’ll have the parts and the experts who are in service.”

Rainbolt agrees, arguing that the industry’s largest dealers are typically the ones that more consistently inventoried equipment in recent years. He says the pandemic amplified which dealers had equipment on hand, and which ones did not.

“In the past, you had larger dealers with five or six locations,” Rainbolt says. “Then you’ve got smaller, founder-based, single-location, 10-employees-in-the-building types. Those guys are protecting their personal assets – and quite frankly I don’t blame them. It’s prudent. It makes sense.

“But they were able to sell machines off of short lead times, or maybe even in stock at the factory,” he adds. “They didn’t have to take the risk of putting it in inventory.”

The pandemic, which slowed equipment supply dramatically, put some dealers with that operating model in a bind.

“When COVID hit and disrupted the supply chain, all that went sideways and they could no longer grow their businesses on the backs of the manufacturers’ lead times,” Rainbolt says. “The larger dealers who had the resources and the floor plans were able to put the inventory on the ground. [They took] the risk.

They took the lead as far as selling large capital projects, and it made a difference in that supply chain environment.”

From Rainbolt’s view, that brief era compelled smaller dealers to find a new pathway forward.

“It forced some of the smaller guys to go figure out what their new strategy was and what they were going to focus on,” Rainbolt says. “They became more experts on a single topic or a single brand, and [dedicated] less time to trying to put the capital equipment out.”

Still, might smaller dealers have an opportunity to revert back to their pre-pandemic approach now that equipment supply is normalizing? Count Rainbolt among those who wonders what’s ahead.

“Now that lead times are starting to diminish and there is some equipment on the ground at the manufacturers, will those smaller dealerships be able to go back to doing what they were doing?” Rainbolt says. “Will that slow the growth of the mega dealer because they’re getting their feet back underneath them and are able to move forward again?”

Blake, for one, contends that the dealers who do not adapt with the times will seal their own fate.

“They become the fossil because they don’t have the critical mass,” he says. “We have thousands of machines that we have to support – not hundreds – and we have to be able to identify opportunities to improve every day with training.”

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