Trusted Ag Industry Maverick Darwin Melnyk Aides Iron Comps’ Success
The coronavirus pandemic, challenging weather patterns, and suppressed trade have thrown the agriculture sector into uncharted territory. Despite the ag economy’s headwinds, Iron Comps, the equipment valuation tool by Tractor Zoom, has found a path to provide an increasing amount of value to bankers, equipment dealers, auctioneers, farmers, appraisers, and insurance companies during these turbulent times.
No company’s progression is ever travelled alone. Tractor Zoom is no different. Based in the heart of Iowa, this team has had strong guidance as they plot their path to better equipment valuations. Tractor Zoom’s guide along this journey is the equipment industry stalwart, Darwin Melnyk. Melnyk, Founder and past CEO of Iron Solutions Inc., now Co-Founder and Chief Technology Officer of FarmOp Capital LLC, is a 20-year leading figure in the agriculture technology industry.
The responsibility of being a leader in the agricultural industry is challenging as many of the companies and farming operations have been utilizing technology to combat the shortage of labor. Melnyk’s advice to Kyle McMahon, CEO and Founder of Tractor Zoom? “Do the opposite.” McMahon says. “He encouraged us to leverage our technology to build people up, not replace them.”
McMahon says a mutual friend arranged the pivotal meeting between himself and Melnyk. “He heard what we were doing and said, ‘You have to meet Darwin. A few years ago he completed the sale of Iron Solutions to Trimble, and could be a good resource for you now.’ So we met over breakfast at The Machine Shed restaurant on the outskirts of Des Moines.” says McMahon. That discussion and the many that followed, continue to help shape Iron Comps, Tractor Zoom’s main offering.
Kyle credits Darwin for his encouragement in pursuing auction values as an integral part of the valuation process. Melnyk is now a Senior Advisor to Iron Comps.
Iron Comps, an equipment insights and valuation solution, is powered by data from Tractor Zoom. Founded in 2017 by McMahon, Tractor Zoom is one of the industry’s fastest growing sources for farm equipment auctions. The real-time data from Tractor Zoom allows Iron Comps to provide real-time information that equipment dealers need to know to draw insights about values and market trends.
Kicking Off Iron Comps
Darwin and Kyle kicked around the idea of how the auction market is an early indicator of the retail market, and how dealers can strategically plan inventory if they know market trends.
“It’s good to understand what the market has done, and it’s even better to know where the market is currently. What is best, though, is to have an understanding of which direction the equipment market is heading,” says McMahon. “So much capital is tied up in machinery on the lot. If you price it incorrectly and a high-value piece of machinery sits on the lot for an extra year — or even just an extra couple of months — that can significantly impact your bottom line.”
With a severely strained ag economy, stories are unfortunately all too common of where commodity market shifts have put many farmers on the brink of bankruptcy. This strain is now becoming long and deep enough that price fluctuations are showing a greater effect on higher-class assets like equipment and farmland. Melnyk has always believed that ag businesses, like other industries, cannot just look in the rearview mirror for guidance. An element of intuition, guided by data, is the best way to plan for the future. Formulating the Success Story To date, Tractor Zoom has over 400 auctioneer partners, which covers more than 50 percent of all farm auctions across the country. By leveraging this data, dealerships that see diminishing margins and slower equipment turns during downturns can improve their profitability.
Transparent data. “Iron Comps helps bolster forward-thinking decisions through data.” says McMahon. He says most dealers have come to the realization that data is absolutely necessary. But many can take that even further, he says. “What are you doing with the data? How recent and accurate is it? What are the trends? Can you scenario plan off it?”
“Inventory Managers who have a great grasp on regional market information have a competitive advantage.” says Melnyk. “In other words, it can make their dealerships more competitive because they have better market intelligence to effectively manage used inventory. Good trades are career accelerants. Bad trades are career limiting.”
Dealers who use tools like Iron Comps are more competitive. Not only in their valuations, but also in how these tools help develop their skills and insights. “The operational use of data has to be honed through experience. By using auction data in Iron Comps, you can constantly pressure-test and get instant feedback on your decisions.” Melnyk says.
Nudging Solutions Farther
“Darwin is not only well-connected with other leaders in the industry, he is regarded as a thought-leader. He is also one of the more experienced people in ag tech. That, to me, is a great place to be.” says Kyle. “He understands the future of farming, but at the same time, has the life experiences to know what won't work, as well as what does work, and then the relationships and respect to make progress happen.”