Why do we need dealers?

[Trämör]

I think what would happen is that Ford would sell lower than what anyone on here is able to negotiate with their dealer, but still more than wholesale margin for them. That is if dealers continue to exist and both sales channels were legal.

 

[Rich Pune]

I’m honestly a bit surprised at how passionately some folks are defending the current system of car sales/dealers. I purposefully asked a provocative question in this thread to achieve this kind of response. It does make me think twice about what the right model is. I don’t think anyone has found it yet, including Tesla, but, I do strongly believe the current one is broken. As usual, the answer is not an extreme but somewhere in the grey zone. I think right now, particularly the sales process is broken. The service experience is probably still salvageable.

Everyone keeps saying Ford would be selling them direct for MSRP. They have been able to stay in business for more then 75 years selling their vehicles to dealers for wholesale/invoice prices which means their business model works at that price point. Who says they would not be able to use modern web-based technology to sell them direct to the public for the same low price? We all know MSRP is a made up number that very few of us would ever pay for a new vehicle.

Yep - assuming Ford vehicles would sell at current MSRP if dealers (middle man) were eliminated is likely a bad assumption. It’s more likely that the overall amount paid for a vehicle would reduce some proportion of what the dealer collected.

 

[Rich Pune]

Just had a thought - I bet at some point Ford was direct to consumer. I’d be curious to know when and why that changed.

 

[Fredc]

The mountain bike industry has been transitioning to direct to consumer for the past couple of years and there has been some serious growing pains. The one model that seems to work best - or piss the fewest people off - is a hybrid where the consumer can buy directly from the manufacturer or a dealer. If purchased from the manufacter, the bike is shipped to the consumer's local dealer and the dealer gets a portion of the sale. If the manufacturer doesn't have a dealer nearby, the bike is shipped directly to the consumer. I can see this model working for the auto industry as well. Ignoring the extreme folks, it accommodates those that love dealers and those that hate dealers.

I'm not sure how a hybrid set-up would impact haggling, which is prevalent in the auto market, but not in the MTB market. My guess is that it would even out. In my opinion, there are way too many factors that go into figuring out the price of a vehicle. That's why shopping around works. Every dealership is in a unique situation that enables them, or precludes them, from selling at a certain price point.

My experiences buying from bike shops has far exceeded experiences buying from auto dealers.

 

[richtor]

Just had a thought - I bet at some point Ford was direct to consumer. I’d be curious to know when and why that changed.

Prior to 2000, lets say in 1940 how would said manufacturer get the cars/colors/options/info out to the public to see its products if it had no dealer network? Those in and near Detroit would be the only ones to see the vehicles. Not good if your trying to sell in CA FL NY....you get the idea.

 

[Tx-Tremor6.7]

Prior to 2000, lets say in 1940 how would said manufacturer get the cars/colors/options/info out to the public to see its products if it had no dealer network? Those in and near Detroit would be the only ones to see the vehicles. Not good if your trying to sell in CA FL NY....you get the idea.

Dial-up modems??? LOL