Ep. 57 - Solving Equipment Chaos, One Part at a Time

Sam Light, owner of Lighthouse Machinery and a 25-year veteran of the heavy equipment industry, takes us behind the scenes of a market in transformation. With experience running dealerships across multiple states, Sam brings unparalleled insight into why he left the corporate world to create something that genuinely serves customers rather than shareholders.

The conversation reveals how the construction equipment industry has fundamentally changed over the last two decades. Experienced professionals with deep parts and equipment knowledge are retiring, while dealership networks increasingly departmentalize, preventing essential cross-training. When COVID hit, these structural weaknesses were catastrophically exposed, creating an opportunity for Sam to build a business addressing these gaps.

What makes Lighthouse Machinery truly unique is its approach to the parts business, creating a comprehensive database of parts availability across the continental US and becoming a crucial resource for the very dealerships they might appear to compete with. Sam shares how 60-70% of their parts business comes from dealers themselves, who often lack the experience or resources to source aftermarket solutions.

The discussion takes a fascinating turn when Sam details how restrictive dealership territories and proprietary diagnostic software are effectively holding equipment owners hostage. With service rates hitting $200/hour for often untrained technicians, the industry is ripe for disruption. Sam explains how recent tariff increases, sometimes jumping from 35% to over 100% overnight, are adding another layer of complexity to equipment procurement.

Whether you're managing a construction fleet, working within the dealership network, or simply fascinated by the mechanics of a changing industry, this episode provides a masterclass in identifying systemic problems and creating innovative solutions. Sam's parting wisdom for blue-collar workers feeling stuck will leave you inspired to push beyond artificial limitations.

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Chapters

• 0:00 Introduction to Lighthouse Machinery
• 9:15 Founding Story and Industry Gaps
• 20:27 Parts Business and Dealer Network Challenges
• 32:14 Software Limitations and Service Costs
• 41:30 Tariff Impacts on Equipment Industry
• 51:30 Blue-Collar Success Mindset

Transcript

SPEAKER_00: 0:09

Hey guys, welcome to the Blue Collar Business Podcast where we discuss the realest, rawest, most relevant stories and strategies behind building every corner of a blue-collar business. I'm your host, Ty Kirby, and I want to help you what it took me, trial and error, and a whole lot of money to learn. The information that no one in this industry is willing to share. Whether you're under that shade tree or have your hard hat on, let's expand your toolbox. Tired of spending all your time searching through week leads instead of getting work done? Thumbtack brings you work. You're ready to win. You get visibility automation to run your business without headaches, plus the flexibility to scale across crews and markets. You'll always know where your money's going and what it delivers. The success of pros on Thumbtack says it all. Want to grow smarter? Visit thumbtack.com backslash pro today to book your one-on-one strategy session. Big shout out to ThumbTaq for joining forces with us. As you guys know, we have been um looking for blue-collar product and services, and one that I am very uh learning more and more about every day. I I was just on the phone with them yesterday. I've been an avid customer since they've been in our area. Well, since I've known about them. Uh the gentleman here has more insight and knowledge than I think we're gonna have time to share about the used equipment market, the new equipment market, the dealership network, buckets, attachments, everything you guys want to know inside and out about kind of where the industry is. Um, this gentleman has insight on, and uh he is a U.S. Army veteran with nearly 10 years of service. Thank you for your service, sir. Um, but this gentleman has 25 plus years in heavy equipment, construction industries as a whole, but mainly based around the equipment side, sales service, etc. Uh, none other than Mr. Sam Light, owner of Lighthouse Machinery. Thank you for joining me, sir. Thank you for having me. Yeah, this is freaking awesome. Sam Sherity is definitely stepping out of its comfort zone, and I really, really appreciate you because there is so many guys that are gonna watch this, and ladies, I shouldn't discount you guys, maybe sharing it to their husband. Hey, look, here's some insight on a on a topic we were just talking about going into this new machine, etc. So um there's so much to be talked about in the equipment side of things, but um, as just as our previous guest guys, if you guys want to go watch that, www.blue collarbusinesspodcast.com or any of your streaming podcast platforms, uh, Mr. Alex Kraft, shout out there. But uh this aligns right uh I love how it's back to back weeks because we're gonna be on the same topic as where I was going with that. And in the heavy equipment space, excavation space. Literally, this gentleman has some cranes, all different sorts of types of stuff. Um I follow him on LinkedIn and uh check them out at lhmpartsusa.com and lighthouse machinery. So, Sam. Thank you, sir. Give us there, give us a little background where Lighthouse came from. I know with 25 plus years of experience, you have probably seen it all, the mistakes, where the industry was heading, where the industry worked before, but um I probably made most of the mistakes. Me and you both. That's why I have this show, and that's why I try to share with the audience to hopefully not end up like me, you know.

SPEAKER_01: 3:43

But talk about why lighthouses, who they are, and where you're going with so to give a backstory to it, um ran dealerships, uh a dealership and sales team in Arkansas for a long time, uh, 14 plus years, and then went and uh ran some dealerships uh in the Carolinas for eight years. Anyway, I just um working the dealership side and the changes from 98 to 99 to now is insane differently. So um my last company was a corporation, um was corporate ran, corporate owned. He was an investment company that owned it, and um um just not what I wanted to continue doing morally that too it just um I'm I don't work for the the market um the shareholders understood, sir? I don't work for shareholders. I work for the customers and for my employees. And that and anyway, uh but no, I learned a lot, and then um um I was we were looking for a reason to come back home because um and um so we've we decided that hey, we're gonna move back to Arkansas. We're gonna move when Dollin Place lived in Aristotle's in the north of the world.

SPEAKER_00: 4:59

That's right, that's right. Hillbilly country.

SPEAKER_01: 5:02

My wife's rewarded and I'm gonna like settling. We didn't anyway. So during the 25 years, uh notice the transition of the dealership and OEM network. Um your old people, not say old people, your experienced people that knew the parts, knew the equipment are leaving. And um the new guys are coming in, don't know nothing at all. And so in the training side of it, a lot of the dealerships are departmentalizing, first imparts, the imparts, friend service. There's no cross-training, there's no share of information of why you need these seals for the engine, why you need this parts for this this part of the uh the equation of the machine. None of that was being taught. And so uh also um during COVID, there was a striction of the supply chain. And that showed, boy, was there it showed where all the all the uh shortcomings are through the whole system, not not pointing figures to anybody, but the entire system was screwed up. The industry is all in a shithole. So we started Lighthouse, um, one to uh sell equipment. Uh if you deal with Richie Brothers or uh let's say anybody in particular, um they have their their tooling, they they they're good at some things, but uh the charges are expensive. Yep, 10-15%. And usually the guy doesn't know what they're talking about, usually. Usually some of them are not some are very not. That's right. And so um, and COVID hit and had these OEM guys said, Sam, come help us liquidate assets. Okay. And so that's right when the uh oil fields went to crap. And so uh went out there, oh, it was awful, man. It was it was excavator stacked up like hardwood across the field of machines with no market to go. Also, due to contractual restraints between dealerships, it was hard for them to move that stuff. And so we went in there and came up with a plan to move that inventory. That's what it started lighthouse. I had a contractor in in South Carolina, love that man to deaf, Clary Hood. My left lender, he said, What do you want to do? I'm gonna start something. I don't know what it is. He said, Well, how much you need? I said, I'm gonna need this. He said, Go see her, she got a checkpoint. Go like out of nowhere. Why? And then I said I got on the road and I went and saw customers that I had a relationship through the years. One with Grant Garrett. Yep. Drove here. So Grant didn't talk to you. We'll start this business. I don't know what it is, but it's gonna be something. Can you help me? Yes. Ronnie George with Grant Mountain, uh, with McGeorge contracting. I um I can go through the whole list of people throughout the country, Rogers Group, Marvin walked in, said, guys, we're gonna make something, and uh we're hoping to be a resource. So we started looking at assets, and that's where the cranes and we sold some stuff from the app holts, uh, just stuff that no one really knew about and didn't spend time focused on it. That's right. Okay. So eliminated the assets on equipment, and then during that process, well, one of my old product support guys, Marty, says, Sam, you need to start the parts business. Marty, no. And Teddy's like, no. He said, No, start the part business. And he came on board after about four months of wearing me out, and he sold$150,000 in parts in the first month. My just on his phone calling customers. Well, what Marty had was a knowledge of 30, 40 years, and people can call him and give it to him and walk away. And he'll handle it. He just walk away. And I said, Marty, holy cow, Batman. I said, uh we gotta replicate this. He said, I've been telling you, you gotta do it. He still rose in my face. And so then we brought on Brad Pruitt because he's somebody that has the knowledge on parts I didn't have. And so we brought on Brad, and Brad is welcome knowledge. And then we started looking around for people. And how do you take somebody that's in our industry is less than one percent of the population? Our our inner w less than one percent. It's insane. How do you train them? How do you bring them in and and teach them what we need them to learn to be successful?

SPEAKER_00: 9:26

Really quickly, I have in the last six months started an internal training program uh with video and video capturing everything. But no, I'm with you. It's very hard. It's just it's strategy that you have to find. Like I try and get a guy that knows what a grade stick is anymore. You know what I mean? You have to be adaptable in training. But that's that's been kind of our number one thing was hiring the right people. Sounds like you know exactly what you're looking for, but training somebody new is oh, it's the most expensive thing we go through as business owners.

SPEAKER_01: 10:04

And we go through so many people to get to that one person. That's right. And we have right now we have some amazing people. I mean, yeah, you do, man. Devin, Jordan, Katie, um, Brad, Marty, uh, Dustin. We got three people, we got people up now in New York and and North Carolina and Florida that are coming on board. Um I want to see more of that be successful. Um, but anyway, so back to the you're fine, back to the parts side of the equation. Uh when we started doing parts, uh the COVID hit, and some of the OEMs came to us and said, Hey, we need parts. We can't get GET. I need we need you to figure this out. And so we started bringing containers and container loads of of GET from all over the place to fill in the short, the sh the short uh supply here. And uh, and we were the our biggest customer was dealers. It's still today, our biggest customers for parts is dealers, hands down. 60 to 70 percent of our parts business is sold to dealers. Wow. That's staggering, actually.

SPEAKER_00: 11:12

Wow, that's awesome for you.

SPEAKER_01: 11:14

Well, you're gonna get you don't get better. The easy button for you. See when you walk into a dealership for the most part, you got phones ringing, somebody in the shop needs something. That's right. And just all this stuff going chaotic. So um, are these your glasses? Yes, sir. I'm so sorry. I thought that was remote. No, sorry to take you off traffic. And then um, and so uh customer calls in and wants an aftermarket solution or a use solution, and the guys don't have the experience. So they just call us and we we'll provide options for them. Um sometimes we can make money off of it, sometimes we can't. We just we do what we can do for that side of it, and and that's where we're headed to. So um every dealership is in my opinion, um have a struggle with the parts, whether it be self-inflicted or OEM inflicting. And uh, and our job is to help mitigate that risk and that that that issue. And so far it's been it's been very profitable for us.

SPEAKER_00: 12:15

That's amazing because like you said, man, you're concentrated on the customer. I'm a customer. I can tell you for a fact they are 100% concentrated. I haven't bought a machine, but um buckets and the inventory that did you automatically start. I mean, you guys have a massive. So our inventory runs. How did that start working?

SPEAKER_01: 12:38

So the inventory, we started out with nothing. Yeah, I mean, of course. And our po bore we were working in our pro board at my house. Okay, and that was it was it was it was definitely unique. It worked. Um, it worked. We got out of there because we had these containers coming and we ended up buying the warehouse, and and we're ex we're we're busting that we need a bigger spot. But right now, we're just you know the growth. Business, the business struggles, Bob. So uh the thing is though, uh, how do we maximize inventory and offering to our customers without the huge investment? Okay. So what we've done was uh once we prove ourselves to our suppliers and to our neural network that we're actually resource for you, not a neat competition. That's right, we're here to help you and the end user to keep up running, whether it be your rental fleet, because we're a uh equipment share certified supplier. Really? They can call anywhere in the country, they'll call us one stuff. And so uh we're there's several companies that we do that with. Um anyway, so they'll um the we started creating a database of suppliers and what they're good at. Now, not all suppliers supply all good parts. No, I agreed. There's joke, yeah, okay. Yeah, yeah. And we've we've had we've learned the hard way uh we've experienced you know, that we thought was from a credible vendor and it wasn't, but you did it because you took care of your customer. You had to. And so during that process of learning, um, we create a database where people, end users, the dealer can go into our website and put an apartment number that pulls up what's available in the continental US. Wow. Okay. Now we're trying to stay focused in the US, but uh, we're coming to find out we're having to ship a lot of stuff out of Europe right now, especially on um on road products, we're having to bring stuff in. Um but um but mainly being in the United States. And anytime that we see um an issue, like for instance, we'll have a run of five or six uh same parts being asked for from different parts of the country, then we'll all automatically go out there and start searching where is that where's that pocket inventory that can feed the needs of everybody else? And uh and what a model, man. No, once that once we find out where the honey hose are, this sells in two weeks. Right. Until the OEM can catch up.

SPEAKER_00: 15:08

Well, on the That's insane. The inventory side of things I wanted to really highlight on, guys, is that man, I just bought a bucket from you guys for our Kamatsu 360. We were kind of talking about how unique of a size I was looking more for a 36-inch bucket. I would have actually liked it a little smaller, and you ended up having on the yard a 30-inch uh instruct bucket with some going through some major rock in that area. It's kind of shallowed up now. But either way, man, same day, Jordan's standing out there going, hey dude, I think this bucket will work. This one here, let me measure this. Let me and dude, just the way he communicates with his customer. Um, you don't get that kind of level of service. And he he cared. He cared about the crew sitting there waiting for the bucket, you know. But he had it on the yard. Next day it's on the machine digging. Now, granted, we're right here. That makes that that's a lot easier, but there's there's guys all across the country, and I know you'll ship to them. Well, yeah, we should we shipped two rippers to Hawaii last week.

SPEAKER_01: 16:13

Did you the little rippers go? It went on the uh John Deere 470, and we shipped um, yeah, it the freight was like four grand to get that ripper there, but they bought the ripper and three sets of teeth in Alaska. From now until the end of the year, we'll ship tons of stuff to Alaska. Really? You can chip in Portland, get on a boat, and go up. Oh, we'll um getting ready for winter, everything's getting down timed. Uh frost rippers, we sell a ton of frost rippers up in that area and up and uh also all along the Canada Canadian border. Hey, shout out to my Kanuckies. But that um but we haven't in stock, right? Um we don't have everything in stock, we never will have everything in stock but uh and we'll do as much as our capital allow us to do. But but the resource is is knowing where things are in the country. If you know that, the other thing that that I'm trying to teach my guys, and they're great guys. I'm the team is is slowly coming together, but they're great, is ask the customer what the asset is. If it's a$10,000 machine, do we need a new part? Do we need a reman part? Come on. Are you planning on using it for a season? Are you planning on fixing it and send it to auction? What is the game plan on over to assets so that we can search the best product? Right. And most depending on the size of the company, your size company, you know what you need and know what the options are. Normally, normally, but a beer company, they have a personal agent, asset manager, and um, they're not thinking about all that. And also they're not thinking to ask that from a dealership. They're just going to use new parts.

SPEAKER_00: 17:56

Well, that's literally where I'm going next is let's talk about the dealerships. And uh literally, you hit it on the head when we were just pre-talking here before the show and and the struggles that you saw within the dealership network, not only for the dealership, but mainly for the customer and what they were dealing with from all levels, from sales to service. And um the biggest thing I picked up from last week's show with Alex was that there's no incentive for the dealers to get any better because there's not going to be another cat dealer moving in on Riggs territory or Holt's territory or Fabric's territory. There's just not. They know they're the only person. And I know I'm opening it to me up, man. I'm telling you. I'm telling you, I figured I would I would catch a bone or two. But it is it's so true. And thank God for companies like yourself that go, hey, we have got to fix this industry. This is crap. The customers are getting hosed on, and it and literally that the software that it takes coming out and the mileage trips and hey, uh, and the untrained technicians that they're sending out there$200 an hour to change a filter that you couldn't even diag over the phone, and you told me it was an injector and it was all this crap, and you scared me, and now I got to pay$2,800 for you coming out and changing a filter or whatever the case may be. Yes. But you there has to be other options and not just to hear that dealers are coming to you and going and your team and going, hey man, this guy's got a uh larger excavator with 9,000 hours on it, the new part. Oh, it's gonna take like eight weeks to order. Do you have anything? Reman, is there anything that we could, you know, at least offer the gentleman outside of new? Because I promise you, and normally I run a newer fleet. That's besides the point. But if I'm going in an older paid-off excavator, say a pit machine, I'm not gonna probably necessarily slap a brand new whatever it is. If it's a uh critical part, of course you're gonna go back new, OEM, whatever to get the longevity out of the machine, but sprock it or et cetera, you know what I mean?

SPEAKER_01: 20:12

So it you and I'll tell you a quick story. Please do. We were talking about you know, used parts and stuff like this and and older machines. We were in Austin at a conference, um uh uh equipment management conference, and I was sitting there at the table, and the guy sitting beside me was talking about how he couldn't get parts to finish rebuilds on cat machines, and that cat could not let him buy parts outside the dealer network or the supply chain network. So they're getting bombarded with fines and fees because they're they had to rebuild these machines at the refills sale to get them out. And there is a in their contract, they get they had to pay for a real machine, pay for this, pay for that. And we were sitting there talking, and in every part that he uh we're discussing, I called up Marty and called up Brad. I said, What about these parts? What about what about these parts? And they said, Sam, yeah, I know we got them right here. They're Cat OEM. We can get them. So, but they wouldn't allow them to buy it through without their contracts. And that goes back to the deal network. Uh the deal networks uh is different than a car dealership. Oh, yeah. They're restricted. Okay. They can only sell in their trade area. If you sell outside trade area, then there's a penalty. And then the gentleman's agreement between dealerships. I'm gonna poach on you or poach on me. Right. And I can tell you a lot of dealership meetings, that was the struggle and the fight. It's like you sold this customer in my territory, now you gotta pay me. Well, that creates borders. Yeah. Also, they don't want to work together. Some of them don't, some of them do. And that and so that sharing parts inventory to help each other out. They try to do it through different OEMs, had different programs, and it didn't work to the full effect it needs to work. And uh customer suffers because where you're gonna go. Are you gonna drive all the way to Oklahoma City to get it, want something from one cat where riggs on that? No.

SPEAKER_00: 22:01

You're not gonna tell them to pick up the phone and call Jordan and light out.

SPEAKER_01: 22:05

Exactly. Okay, and guess what? We have access to a system that tells us where the cat part is and reach out and get it. Wow. And that and that's what that's what kills me. Take care of the customer. Will you make less money if you were outside your outside your dealership? Yeah, you're probably gonna let make less money. Okay. Uh, but do it and get the customer up and going. And then uh, and some of the programs penalizes the dealers from doing that. Anyway, that has created opportunity for Lighthouse to create something that doesn't exist. Yeah. And that is, and you think about it, the old school guys, um, like from Heavy Quip or from the other, they're closing up. Yeah, their knowledge is gone. Or they're getting bought out by investment companies. And here we go again. It's about the dollar versus the customer. Going back to that corporate ledge, I mean, I'm not interested in that. So the the part side of the equation is for us one, to to breach break barriers and supply the customer with option the best option we can do. And that's what we want to accomplish.

SPEAKER_00: 23:13

Literally. And um the dealerships, man, the software. I know you have I know I figured that would be a next uh pretty good proprietary software topic. Oh my god.

SPEAKER_01: 23:26

If you require me to pay you to come out to my machine to diagnose it, you are not gonna charge me. That is captured audience, that is called trade restriction, that is holding me hostage. And I wish that we, as an industry, I'm talking about contractors, go to our legislative and and tell them create a law to where I'm not held hostage to this. Uh-huh. And that's a great idea. They can do that. We can do that. And there's been discussions about it. And the OEMs, I'm not saying all of them, but they're having discussions on how to combat that or how to help that. I've had I've been in conversations with in with OEMs, and they're like, okay, we need to start facilitating this. And then the dealers go, well, that means we lose revenue. And we can't charge you$2,000 for a service call every time to go look at something and tell you that it was a filter. Yep. Well, if I had access to monitor my own machine and to dynox with my own machine, let's do that. There was a company that we met um last no, it was the beginning of this year, and they have an AI, all they're going to AI all of the service manuals where you can talk to the phone and put in what your symptoms are, and it scans the service manuals and put out which they check. That's like if that's completed, how much money would that save a contractor on service costs? Yep. On BS service costs. Now, if it's something major, yes. And I want my dealers to make money. I want them successful. I want to them to make money and be able to take care of me when I need them. That's right. But not hold me hostage.

SPEAKER_00: 25:07

And that's killing us. I can only imagine, man. I mean, contractors as a whole, I am a little bit different. Um, I basically pay them to service my machine through the entire warranty. And I already know that I'm gonna have to do one hose. You go out there, hey, I need this hose. Well, it's a it's a sealed system. You're gonna have to have us come out and reprogram that sensor to read this line, that line. Like, what? So I should have just had you guys to come out to begin with. And, you know, earlier in the years of Sycon, I didn't know what I was doing when I was buying equipment, just buying equipment. Oh, the cheapest price possible. I didn't know you could put service packages in. I didn't know you could put mileage in it, that you didn't see a bill on your incremental hours, and that they're servicing the machine. So when you go to resell it, I didn't know any of this existed. And so thank God I did before all this software. It seems like in the last five, seven years for sure, the software has become a complete issue, especially for farms, farmers, them guys. I feel so bad for those guys that have shops. They have learnt the knowledge we were talking about. Those guys are fading out, you know, but they know the knowledge how to work on these tractors, and uh, but they can't because they need something to go beep, beep. Right. Click okay, yes, sir, recharge, regen, whatever it may be. But it's just so epic.

SPEAKER_01: 26:29

The komatsu service program, they it's a really great program. Dude, I love it. Yeah, as a matter of fact, um, I'm building a rental fleet now. Um, and and I'm gonna do the best I can to have power as my serving service and do komatsu machines because of the komatsu care. Um I'm not plugging in at all. Oh, it's fine. No, I'm just Kamatsu where you at. But uh, but uh Komatsu care and all that look, I've got a long frontal reach on I got a long reach on on Red right now. In South Carolina, I'm launting here and Lender uh is is doing doing the service work for me going out there. So there that model's doing good. Now, is all dealers great? No. No. But um, but if I had my choice for the market area I'm in, agreed. Power is my company. Uh South Carolina Lender is my company. Yeah. So um that's how we use for that.

SPEAKER_00: 27:22

But that gives a little reassurance and affirmation that I'm not crazy, that I did pick the right dealer back then, you know. But back to pop back to power, though.

SPEAKER_01: 27:30

Scott got a good team. Yeah, he does. Scott's a good team, solid. Yeah. Uh there's I was telling telling um oh, what's his name? The president of power, Tim D Moon. Oh, okay. Yeah, yeah. That's talking to Andy, I was like, Andy, you have a great team. It was in springtime. I'm really happy to be part of that. But anyway, back to service. If if one,$200 an hour is ridiculous for what we're getting. Untrained, untrained, yeah, multiple trips, yeah, because the guy couldn't figure it out, downtime, and there's no one to hold him accountable. We're held hostage. And so I'm starting to see more and more technicians leave the dealer network and start their own companies. And I'm starting to see a trend line on our revenue to those independent uh contractors, service guys. There's a company in uh Charleston that have six technicians, that's all they do is independent. I know a ton of service guys in the Atlanta market that went out and bought their own service truck and they're doing their own deal. And they're charging 120 to 140 bucks an hour version with a dealer charging 200.

SPEAKER_02: 28:40

Yeah.

SPEAKER_01: 28:40

Now, sometimes I question, well, their knowledge, so when you start working for a dealer, your knowledge hits a wall to where you're not getting that training. So eventually those machines will fade out. And whether where's the the knowledge side of it where they can gain knowledge on the newer products? So eventually, there has been OEMs that have discussed using a Tesla model as a cell distribution and setting up service facilities to service machines through certified technicians that are not part of the dealer network. That has been discussed by a lot of people. Well, yeah. And the OEM will allow to keep the margins of the retail for themselves. It's it's there's we can go down that rabbit hole. But there has to be discussed discussion looking at it, and and to the point to where they have looked at what would cost about contracts of dealerships, what would it cost versus what they would gain, how long everything else. If that happens, then they would have to create a um training program for the independent technician to work on that product, be skamatsu certified or deer certified or cat certified, Sandy certified, or whatever the case may be. Um so I'm looking one, if we can limit what we get in charge in the field for BS service calls or Restricted uh access and have some way to for them to train our people.

SPEAKER_00: 30:06

That's right.

SPEAKER_01: 30:08

Okay. And that person could be an independent service contractor. That's only 1099 with us. Okay. Train those guys until that we can be more profitable. And and that has to come ahead sometime or another. It has to.

SPEAKER_00: 30:21

The grid. I think the you know, sitting here on this side of the table, I mess with Chat GPT and Grok and a couple other AIs, uh, probably a little far too much, but I'm trying to obtain that knowledge as quick as I can because I'm not a techie guy, but you know, I never even thought about taking a I'm gonna try it now, is taking a user manual uh from one of my machines and spinning it in a Chat GPT and ask the questions. Yeah, I'm gonna ask some questions and see if that works, but because I I believe that's what they're they're doing as well, whoever whatever dealer that was, was basically dropping it into an open AI language learning model and and basically but think about the gentleman that is 70 years old who you know is finally buying that last piece of equipment and he won't and and can be able to just go, Hey, why is my you know exactly it's gonna be impressive for you know, or the young guys that always have their phone in their hand and can't get it out of their hand and they're glued to it. Hey, why why is this machine wrong? So they can maybe, you know, not fix it, they're operators, but at least when they pick up the phone and call boss, they can go, hey boss, uh I changed fuel filters out. We had an extra pair there in the trailer, but uh man, this thing is acting funny. I checked the code online and just give me a little bit of information so I can go out to the dealer network or whatever it may be and uh independent guy, and actually, I'm not if I could fix it myself, I would. If I'm calling somebody, most of the time I don't know what I'm talking about. So the more information I can get from them as fast as I can, and the more information you give the dealership, too.

SPEAKER_01: 31:56

There you go. You get because on the when I was working for the dealership side, I had a customer calling me up and him complaining about the service work. And he comes in livid and um upset and and I understand. I I feel you're paying five but the heel. But um, but then I go back to my service department, and I'm and I try to keep from doing it, but my frustration, aggravation, what I felt from him is starting to come out in my service department, and I'm and I'm I'm trying not to be that way. But uh and say, Do you need to take care of my customer? We come to find out the communication between him and somebody else within the company at his at their and um and all the facts went there, so he was piecing it together. Uh but if we had a tool that would help our people in the field uh get some kind of data or get some chain of filters or disc code popping up, something to help them uh the feed it back to the dealership immediately be a lot faster and quicker.

SPEAKER_00: 32:54

You know, there's a this may blow some of you guys' minds that I own Kamadsu equipment, but uh a gentleman shared there's one dealer out in South Carolina, actually, as funny as that is, and I think it's North South Carolina or North Carolina, but they have a search bar that you can take your code from your Komodsu machine and stick it in there and at least give you some idea. It it's um Carl sent it to me anyhow in an email, and I checked it. We had uh some codes thrown on our 360, and I got it halfway dyaged where I could call my heavy guy and go, hey man, I think this has something to do with either this or this. Oh, well, you probably ain't changed this out yet or done this, have you? And I'm like, oh no. You want to come out and look at that? He's like, Yeah, yeah, I'll be there and come out, you know. But we do. We have to have from the dealer side and from the customer side, because I have been that gentleman, I have 100% um gone in hotheaded into situations not being trusted and verified in my information before I moved forward. Made an ass of myself sometimes, you know. And but at the same time, that dealer should be able to kind of go, hey, I'm not getting everything I need for in order for me to do my job. Can I have this or somebody that has that information, you know? And it goes back to train people. Right. And um, but my I can't tell you how many times I get a I get a call from a guy in the field, hey, this is so this is broke. You want me to call over and deal with that? Well, my automatic answer is gonna be sure. Yeah, I dude, I'm at it. I'm dealing with this and this. And by the time it comes back around to me, hey, Sam called me for this part, or my Sam, you know, for this part and this part, and it I think he really needs this. Can you like take some time and verify this? But no, I agree. I think you know, things like back to Komatsu, my komatsu, their their app, that's probably how you're watching your your dredger. Exactly. And so, not to plug them any more than they need, but I love my komatsu app that I can see the fuel burn rate. How much idle time are those machines sitting out there? Are we can we actually bill when I go to send a bill? Is the customer going to be upset because you know we we didn't do eight hours worth of, we did three on a check is my komatsu and go, oh yeah, my customer's right. We only did three hours worth of work, you know, it hasn't happened, but right that's the verification that I want as a customer that's spending hundreds, not millions, of dollars on on these pieces of equipment that I want to hopefully last longer than the payment.

SPEAKER_01: 35:35

You know what I mean? I know exactly what you mean. Because this uh equipment is not going to get any cheaper. And um we man uh this year I think we're up to$35 million in equipment sales. Let's go. But in that same breath, I got customers to buy them and and they buy them, and I'm very grateful for that. And but I'm always scared. Um not always scared, I try to do the research, but I try to uh if the machine goes down, it breaks down. Yeah, and uh and back to what it costs and stuff, every time we do use machines, I do evaluation and try to get the programs that that the OEM is offering. So if if uh deer, cat, whoever is offering 0% for 48, 36, whatever, I I gotta take that consideration and then I look at the use machine and say, does this machine has appreciated enough to offset that? Well, how can we expect that cost expense uh expenditure? And then also the warranty side of the equation, does the machine have a warranty on it that offset the risk factor over here? And and then I look at the hour utilization of what the customer is and pencil it out, okay, if we did finance this machine, what would be the depreciation cost or be worth at the end of the note? Okay, we don't want to get to the note and he paid off the machine wore out, or every single business model different. And so my main customers that I deal with, I pretty much know what their accounting structure is and how they will depreciate out stuff. So I'll put the asset together and propose these methods of purchase, whether it be a rental purchase or uh financing or cash or whatever. And then uh then also their buying habits. So a lot of my public trading companies do not buy anything until January. So like there's some big projects that are coming up that they don't have the capital to buy the machine, it's not approving the budget. They get the money, it's not and it's just not something they have the approval for from corporate level. And we'll go out there and buy the asset and rent it to them. And we then at any given time we'll have five to six million like that now out just filling that need because they need it now. They need it now, yep. And the in that market may not have it there, okay, because the market's different all over the country. And um and we'll get the asset and put it on rent to them um if we have a plan in place.

SPEAKER_00: 38:02

You bet, of course. Yeah, no, but it's it sounds time and time and time again, and I'm I'm very excited for this story to be shared. But I mean, seriously, you've sat here for the past you know 45 minutes, hour, and talked about how you have found problems, and here's the solution. Here's the problem, and here's the solution. And the if you guys don't follow Lighthouse Machinery on LinkedIn, I'll give you a shameless plug there because um watching that ripper, it caught my eye. I watched that thing over and over again. And you talk about the the mega ripper on the 470 and and and give that little bit of solution, how your customer came to you. And oh, we didn't talk about that, did we? No. Okay, all right, not all the way. I could I stopped you off.

SPEAKER_01: 38:46

Okay, okay. So uh Terra Honk is a uh utility contractor, contract in Riley. Um great Dale Wars, awesome dude. Contractor, he also teaches school. Uh he's at uh North Carolina State, I think. Let's go ahead. Yeah, he's a good dude. Um he called me up and said, Sam, drilling blasting has cost me a fortune. We got some sensitive areas to where we can't blast because they got Dale Computer Um factory and then Farmer Stata Center. Yeah, I said can't drill a blast. And if we do drill and blast, the liability the liability aspect of it is astronomical. And he said, Did you ever see one of those big rippers on YouTube that they have in China? I said, Yeah, I seen it. And uh he says, Can you keep me one of those? So I called guys over at Instruct in England and I said, Look, shout out, yeah. I said, guys, can you make this happen? Yeah, we do it all the time in Australia. I'm like, You're kidding me. And he said, No. I said, Well, put me price together. The first one we did was a little PC 750. And so uh huge, dude. So, oh my God. The see that baby work was was something. Now, we've had some rippers we demoed right here that didn't do good on the 490.

SPEAKER_00: 40:00

Okay.

SPEAKER_01: 40:00

Um, we demoed to Grant. Grant took it to four, Grett Garrett, yeah. He took it, um, he was had customers that had issues with moving materials. Like there's a place over here where they got um mines on the ground, yeah, and they got the core on top, and they couldn't drill and blast. And so they were wanting to develop that in the subdivision, but they couldn't move the rock. Anyway, we tried it there, it didn't work. Anyway, but the mega ripper, it's on PC 750. The arm itself, just the arm, is 33,000 pounds. Just on. Because you have down pressure. Yeah, the D11 ripper with a cylinder that's this massive, it's huge. And anything it touches, if it has a 15,000 uh or less uh PSI rate, it just butter just rips through it. Now, the problem that we have, well, the problem, and also it's a it's a guilty pleasure, is he has to go he goes to uh tooth every Tuesday. I'm not talking about breaking. I'm talking about you go up there and you can pour water on it and just you sizzle because it gets hot. So that tooth. So we had to import some teeth um by the container load because we get anywhere else or five, six hundred dollars things.

SPEAKER_00: 41:16

Yeah. They're stupid. That is ridiculous.

SPEAKER_01: 41:17

Yeah, and so we could I can import it for 200 bucks. And I'm like, let's import them and then uh make sure this the material spec is right, and uh and so that we don't kill our profitless ding job. So that job was great, and then uh pay for the machine, loves it. I said, Sam, we got another job that's and they want to they want these machines digging here, and so we order another one. And that was that was exciting on that one, the 374. The tough part of that equation was, and this is something that uh everybody that's listening to this needs to pay attention to. Uh the terror scenario. Okay. When we ordered that, that part, it was 35% terror. When it came in, it was 100 and something.

SPEAKER_00: 42:03

Oh my lord, no notification, no nothing. Here's your bill. No, we got notified. Okay.

SPEAKER_01: 42:11

Uh, but uh it was we got notified, but it already shipped. Okay. Already shipped. So he has a brand new cat 374 still on the ground. Okay, with no bonus stick. Why? Because he bought it because he was and now I got this ripper coming in. I called him, I said, Daniel. Oh I said, dude, I just got my bill to my tax bill from uh from the feds uh from um on this on this ripper, and we can't come up with 780 grand more. And he's like, no. I said he did, he met uh no time, man. Because the bill's here, it's here. Either I have to obey the at the port or pay the pay the tariff. Well, what are you gonna do? And so we either split it. Good for you. Yeah, well, no, it's not good because no, but he made more not even making money.

SPEAKER_00: 43:03

I understand, but it's for the customer. Yeah, yeah. Point proven, man. Oh, gosh.

SPEAKER_01: 43:08

You're worried about the customer. Oh then, and that's that's one thing I'm finding right now is that my customers or our customers, or you, or whoever, are based these projects and been these projects based upon the cost factor they have at that time. That's correct. And I am seeing where the the asset tool needed, customer can't go up fast enough to offset that cost. No, I promise you. You can't. And and it and it's and it's scaring the living shit out of me. Yeah, I bet it it is. No, you're fine. It's it's it's scaring me because uh I'm seeing it with if what I have when I'm having to pay for to replace my inventory, it's like gas. When gas goes up and you got and it's a dollar cost, now it's a dollar twenty-five. Well, you didn't make any money. No. Because you gotta buy 25% more for the gas. And politics aside, whatever they're gonna do, understood, but it is hurting our industry right now. Uh once it once it settles and we can catch up and we know what the rules we play by. Oh yeah.

SPEAKER_00: 44:13

Pay pay it go on, but it's hurting us. No, I could only imagine. I mean, uh it it it I didn't even honestly, of course it's the parts game, uh tariffs, everything inbound. So yeah, that's definitely increasing uh more and more. But honestly, it's not just parts like that, it's also the projects that we're building, man. The tariffs, like when this first hit the ground, to again, politics aside, here guys, like when they first hit the ground, we were bidding some work. We thought, you know, after the election year, here we go. All this work's pouring out. Here it is, March, and then crickets, dude. Hey man, did you see that big old proposal we sent? Yeah, man, uh busted out. Hey man, oh yeah, we're gonna wait a year. Hey, I mean, it was push, push, push. We're still living the push game. We're in the middle of it. Now, don't get me wrong, you still have projects going, etc., funding federally, but man, the commercial world, the multi-flex space, the multi-family space, anything, you know, cushions on a dead gum fire sprinkler went up like four dollars a piece at one point. There's hundreds of them. You know what I mean? Just the rings that cover the dead gum sprinkler heads, you know. It's things like that we don't normally think about. No, but going into a building price and you're sitting there going, yeah, I've got this mil and a half total site package coming up, yeah, we're ready to go. And then all of a sudden, hey man, uh, we're gonna wait till next year. Oh, okay. Oh, yeah. Oh, oh, okay, yeah. I wasn't totally just planning for this job over here. You know what I mean? Like, and you got a flip, and if you're not bidding any more work, but the tariff game on just the commercial, then you start bringing in the interest rate game, as I know you don't love. And that was kind of killing, you know, land buying, land development. Nobody wants to purchase when interest's high. Uh that's doing its purpose, right? But we still have jobs to do, right?

SPEAKER_01: 46:11

You know what I mean? The interest rate is hurting deals too because it costs more to for them to stock the inventory. Yeah. So it's anyway. I just if if any contractor I'm talking to now when we're forecasting to achieve 2026, I'm telling right now to have a 10 to 15% buffer for unexpected whatevers. Whatever. That's a big whatevers. It is. It is. Now, at least you're talking about it. At least you're talking about it. Okay, forecast it. Plan for it. If you don't need it, great. But don't get caught up in next year in like, holy cow, we blew through our capital and we're not enough machines to start this job. Yeah. Or do this job. Yeah. Do a figure heavy on rental. I'm starting to see now some of the rental companies, um and this this happened here recently. I had fan rollers on the water come from Europe. Okay, home rollers. Uh, and some of them from Bomac too. But the two in particular were split drum, vibratory, cab, heat, and air, specific to a a state contract, and they had to have it. Yeah, okay. Didn't have it in US. Yeah, we're gonna give it for three or four months if you deal with it. And so we brought it over, and uh they passed a steel tariff of fish products that weekend, and it increased the the cost of those machines by 15, 20 percent, 15% overnight. No, no, just it already shipped. So my and and geez, so I called him up, and we we had to pay it because that was specific, it's just like having the Cat 815 compactor for compaction uh tests. You know, the engineer's not gonna sign off on anything different. He knows that's what it's gonna do, and he won't sign off on nothing else. That's right. And so that's what that tool was for. I just one for dealerships. Um, I don't see how they can increase the rental rate fast enough to offset to get the return they need to have a rental fleet, uh to have that offship for the contractor to use. Uh also uh contractors going into next year with a dollar amount and then get there and won't be able to write the check. Right. Oh, my lord. And there's some some companies don't have to worry about they have enough, uh they're strong enough to to weather a storm. That's countries now.

SPEAKER_00: 48:20

No, it's already been a storm to this point, you know what I mean? Residual from things we just spoke about. But yeah, I didn't even put two and two together there, but on on the whole tariff capacity, inbound, outbound, you guys need to be absolutely paying attention to that because Wow Factor. Yeah, 50% on fashion goods. God, well fish goods, dude.$300,000 dozer.

SPEAKER_01: 48:45

Well, so so they want you to break it down for where the steel came from. So, like on the rollers, the the engine is made in England. Okay. Okay. The rollers made assembled in Germany. Uh the shell, the the round part, that the actual is made in Prague or somewhere. So every, if it's not part of the EU, it uh it's a different tariff. If it comes in China, which they're not gonna tell me it comes from China or not to fill in the paperwork. So we've had to uh basically follow the big boys on how they report so we can report the same way. And that's becoming challenging.

SPEAKER_00: 49:21

That's insane. It is. That is truly insane. I told you guys we were gonna get some and we're running out of inventory.

SPEAKER_01: 49:28

I am running out, I am running to inventory. I am running out of inventory because people are buying up stuff. Everybody's had a 78% price increase in the last 30 days. Yeah. So and I'm sitting there to myself, I've already quoted this guy 100k for this machine or 200, whatever it is. I know for a fact that if you go to dealership, he's gonna pay 50, 30 more. And I'm trying to fight the urge for the greed urge of going up. Yeah, because but um for the most part we're not because it it'll come back to bite you. I'll pay you the price, but it's he he's gonna remember that. Yeah, or she. And it'll come back to get you later. But anyway. Hate to go off that part, but that's something they we all had to pay attention to.

SPEAKER_00: 50:14

No, I am so glad you did. I mean, yeah, it's subject matter. We that's the that was the whole purpose of the show, is the subject matter. You know, you, sir, yes, you're you're in the blue-collar world. There's no doubt about it, but you're definitely most smarter than most blue-collar ran businesses, you know what I mean? And you've had the experience. There was a question on this go ahead that that hit me. Blue collar performance marketing's passion is to bring attention to the honest work done in blue-collar industries through effective results-driven marketing tactics. They specialize in comprehensive digital marketing services from paid advertising on Google and Facebook to website development and content strategy. I started working with Ike and the team earlier this year, and they've had a huge impact on our specific marketing campaign and trajectory of our overall company. Their expertise in digital ad management, website development, social media, and overall marketing strategy has been an absolute game changer for our sales and marketing at SciCon. If you're looking to work with a marketing team who does what they say, does it well, and is always looking for ways to help your company grow, book a discovery call with Ike by going to bcperformance marketing.com backslash BCB podcast, or click the link in the show notes slash description below. Thanks, guys. What takeaways were a blue-collar worker who is sick of being stuck in the mud?

SPEAKER_01: 51:35

Well, hit me so hard. Okay. Okay, and the reason why is because I've been in the boardrooms where the people up top were not the smartest. No at all. They were there because of politics or for whatever reasons. Uh I've been there where my technician knew more about the PL than the people that were responsible for it. The inputs and outputs. And all I can tell you is that blue collar doesn't mean nothing other than what you label yourself. And I tell guys all the time, especially on my on the park side of the equation, you're smarter than most of the guys out there because you know how to make it happen. Doing and thinking of it are two different things. If you know how to do it, don't let anything hold you back. Because you can do it. Don't let some manager or some whoever uh restrict your possibilities. And and back to the military scenario we used to talk about that. As long as you're willing to fight, you can there's no reason why you cannot get there a blue-collar guy that can accomplish whatever you accomplish. Because um they had the skill set to do it, they just need to do it. Man, that's that's because I'm I talk to technicians all the time uh uh at dealerships. I talk to parts counter people, I talk to uh the guys in the field running machines, and all of them are capable of doing each other responsibility. You just take the time to train them, teach them. Um, but when I saw that, I'm like, yes.

unknown: 53:09

Funny.

SPEAKER_01: 53:10

They need to pull themselves up, let's go.

SPEAKER_00: 53:12

Dude, I so you stole you stole a final question from no, don't be. I I'm glad you're excited. I have asked that on all 50 plus episodes to every single person. And you should, I can't wait till we put a collage. We put a small collage together, but I I think I ought to put an episode of just people's answers to that because I've had people from concrete guys on here to mega finance guys to you know, gentlemen on a fleet of equipment, whatever it may be. And the answers are simpler than most, but at the same time, you're absolutely right. You just need to do it, you just need to start. You just whatever, don't let anybody I can't tell you how many people told me not to do this podcast. I can't tell you how many people told me to you're gonna put your utility work and earth work on YouTube. I can't tell you how many times I got told that, but all I knew was what I knew. And so I stepped out, started doing something a little bit different, and there's always reward in the value of helping the guys that I was telling you very shortly about, you know, the the the folks that have reached out. I can't thank enough to you guys, man, that have reached out about the marriage podcast that me and Sarah did. And we we didn't talk about hardly anything business. It was more just our personal level. But the direct messages and emails that I received from you guys, I can't thank you enough. But that's the reason I'm doing the show. That's the reason I keep showing up every week and getting to meet wonderful, you know, folks like yourself. They get to learn a little bit more insight. But there needs to be more resources for that blue-collar guy that wants to achieve, wants to get out of the mud, wants to go do something else. He needs to be able to go find a resource that he can use, plug in, let's get better as he's sitting there doing his work for the day. But no, I ask every single person on the show, so I'm glad you're excited about that.

SPEAKER_01: 55:12

Because that was the one that stuck me the most. Because I get um when I started Lighthouse, they said you you know you're crazy. Why are you bucking the system? I'm not bugging the system, it's just broke. Amen, bro. And and people like, well, why do you share on how you do stuff? I'm like, if I share people how they do stuff, they still have to do it every day. They had to do it every day, and that's the reason why blue calls, blue call, because they can do it every day. That's right. And and and just don't let anybody set you back, man. Just just it and the podcast deal, and you're showing your job site. Uh, I had another customer that didn't want me to video uh his his job site. Uh it was a rock wheel. We had a rock wheel. Oh, dude, I want them. It was killed, it was so beautiful. That machine was awesome. Anyway, that's a different story. Okay. All right. Um, it was in Famous in South Carolina on that job. Anyway, all right. Um we were on the job side. He wanted to video a quick. I'm like, why? He said, because people learn your learn what we do on the job side. I said, they have to do it. Everybody knows what needs to be done. Everybody thinks they know or they know, but the execution part is it's the reason why you're in business and why somebody else is not. That's right. And then that's that's the reason why I say when I say blue collar, I look at people that can execute. That's right.

SPEAKER_00: 56:29

We are. We build America up and and the rest of the globe. No, Mr. Sam, I can't tell you how much I appreciate your time today uh for joining us on another wonderful episode here. You guys can check all episodes out at www.blue collar businesspodcast.com. Um let us know uh on the rec what is it? Form submission. I apologize. The submission form, there's somebody you know needs to be on the show or a product and service that you'd like me to highlight here on the show. Get with us over there. Uh, if you're on a podcast, streaming platform or service, give us a following rating. It helps the show more than you know. I hope you guys got so much insight. I learned a few things sitting here, and that's the coolest thing about doing this is I get to sit here and learn while these guys get to sit here and learn. And it's only making better guys like shout out to Adam Swain in Colorado and you and your bunch out there and Peyton Hill out in Jonesboro. Like I can think of 10 or 15 guys that are avid listeners of the show that we help, you know. Yeah. They're gonna they're gonna probably be calling, hey Mr. Sam, uh, what was this mega ripper you're talking about? I got a mountain to move over here now.

SPEAKER_01: 57:37

So, or just call me with any issue, any problem, and we'll try and find a solution. And and and you don't have to buy it for me to do it. That's right. Because if uh I get big kick out, I get a customer, he always calls me up and says, Say, I need this machine, go find it. 60 cents of the time, he's not gonna buy it. But I do the exercise, but every time that somebody asks me to find a solution, I learn something and I can use it to somebody in. That's right. Every single time.

SPEAKER_00: 58:04

It's valuable. You're inspiring. I appreciate you for um willing to be a pioneer. I love spotlighting pioneers in our industry going against the grain that that go, no, I'm tired of this. Oh, well, that's how it's always been industry. And we're gonna that's not too me and you both, my guy. Oh, yeah. But um seriously, thank you for stepping outside your comfort zone. And guys, go see Sam and his team. Uh LHM partsusa.com. Check them out, lighthouse machinery and all socials. And follow Mr. Mr. Light on the Lighthouse on, I'm sorry, Mr. Light on LinkedIn. He's he's a pleasure to watch, and you get to see things like mega rippers ripping up the wonderful countryside. Guys, till next time, y'all be safe. If you've enjoyed this episode, be sure to give it a like, share it with the fellas, check out our website to send us any questions and comments about your experience in the blue car business. Who do you want to hear from? Send them our way, and we'll do our best to answer any questions you may have. Till next time, guys.