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With the corporate reseller sector under financial pressure, there has never been a better time for ambitious and experienced sales people in rural Australia to go independent, writes Grant McShane of the NRI rural buying group.

If you’ve ever wanted to set up your own rural merchandise reseller business, 2009 is your golden opportunity.

The notion of buying straw hats in winter has always had an instinctive appeal about it and has proved to be very rewarding for countless investors, speculators and entrepreneurs over the centuries.

Because the best time to build for the future is always during a period of crisis.

Anyone with aspirations to create genuine wealth in Australia’s farm input market will now be doing some serious sums on the viability of setting up under their own banner.

And why not? If you’ve earned your credentials in a corporate sales or technical role, the idea of going independent – and building on that knowledge and experience for your own personal gain – is very compelling, especially given the uncertainty presently afflicting the corporate retailers and wholesalers.

And deep down, you know that after working for “the man” for all those years, it’s exactly the change of pace you need to really hit your straps and push yourself towards a better career and a better way of life.

Let’s start with the macro-economics. There is a growing trend among global investors and financial institutions to review their investment strategies and focus more on commodities, food, energy and water because these are such fundamental human needs that must be met by the market.

While agricultural commodity prices increased in 2008 to record highs before falling in recent months, they nevertheless remain well above the 2006 pre-boom level.

With the middle classes in China and India predicted to grow at 6 per cent and 3 per cent respectively and oil-rich gulf nations are already importing most of their food, the price of commodities look set to climb higher yet. Clearly, this has positive implications for rural resellers of a major food-producer like Australia.

Turbulence suits independents
Secondly, the trend towards greater volatility and unpredictability in the pricing of farm inputs leaves the independent reseller at a distinct advantage to the corporate reseller in this market.

“The best time to build for the future is always during a period of crisis”

That’s because independents aren’t wedded to strict core ranging policies the way the corporate retailers are. This simply means the rural independent has more options for procuring product – from more sources – on a more profitable basis. And when opportunities suddenly emerge, as they often do in our weather-dependent industry, independents can move more quickly to exploit these.

No more cumbersome chains of command. No more cut-throat wholesaling activity. As an independent, you are free to build the kind of business you want. You are free to make quick decisions which invariably mean better decisions that produce more profitable outcomes.

Of course all this depends on you having the credibility and respect of your local farming community. But the chances are, if you are a genuine salesman with a passion for helping farmers you will have already built close customers ties. And you will have
built up knowledge and experience about the local market and how best to service it.

Like those independents who have already joined the NRI group, you are most probably already involved in your local town and closely connected with its people.

Corporate withdrawal
Thirdly, the recent changes to retailing franchising arrangements and the closure of many corporate-owned retail branches around Australia has opened the door for new players to have a crack at this market.

There’s now a real chance for independents to get a foot in the door at a time when many farmers would be feeling disaffected by branch closures and willing to consider shifting their business to a new, perhaps more service-oriented reseller.

And as the new independent in town, you could mount a good case for support along the lines of helping to keep the market competitive and the local community thriving.

It is new businesses with new ideas and better, smarter ways of servicing farmers that will benefit from investment now while the corporate competitors are seriously distracted, and while rural media advertising rates are competitive and business people everywhere are generally keen to negotiate for a slice of your new business.

That’s what Woolworths is doing now. It has immediate plans to open several new branches and employ new staff to run them. Even the AFL is planning moves into new territory such as western Sydney because they sense the lack of competition on this front and they are ready and willing to back their judgment. These are classic counter-cyclical moves that help reduce risk in the setting up of a new business.

NRI tailor-made for independents
Perhaps the best reason of all to go independent this year is NRI Limited, a rural buying group conceived by rural independents to create genuine retail wealth for themselves and their fellow Shareholders.

NRI has the right structure and financial package for ambitious, professional rural independents. It was designed to take cost out of the rural supply chain and give independents greater control at both the buying and selling ends of the business.

With its philosophy of direct supplier-reseller accounts, NRI has no need for a costly wholesaling department. There are no expensive “middlemen” who keep you one step removed from your all important suppliers. At NRI, we manage our own relationships with suppliers because it is the best way to stay informed and competitive. In fact, this willingness and ability of NRI members to manage their own accounts on a professional footing is really what sets NRI apart.

They say when the going gets tough, the tough get going. I would qualify that to say it is the tough-minded with that burning spirit of independence who really get going in tough times.