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Old 11-11-2010, 03:03 PM   #1
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Local dealers

Forest River openly encourages people to buy from "local dealers", and at the same time, I have heard that they are now requiring that local dealers buy a minimum number of units from them in order to continue to be authorized as a local dealer. This practice, unfortunately, has spread to several of the major manufacturers. If this continues, it could put a lot of local dealers out of business, and people would only be able to buy motorhomes from high-volume online and national companies such as RVDirect.com and Camping World. What is wrong with this picture?
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Old 11-11-2010, 04:02 PM   #2
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Sadly the practice you mentioned is pretty prevelant in all phases of motorized sales. We had a Dodge dealer in a local rural town that had been in business since 1929. Chrysler came in and said you have to keep $3 million in inventory to stay around. He told them where they could park their $3 million of inventory and it wasn't in his yard. Same for some of the Chevy and Ford dealers. Another dealer who is a client of mine stopped handling his brand of motorhomes because the manufacturer told him what he HAD to stock. This is what happens when big business becomes the only source of a product.
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Old 11-11-2010, 04:40 PM   #3
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And thus why businesses are failing. You can't force your dealers to carry products that the people don't want, or can't afford. But also, the local dealers have to quit whinnying when we find a better price somewhere else. I've got a friend of mine who bought his @ the biggest show on the east coast (Heresy, PA), and the local dealer won't service it. There is a lot wrong with these business practices that need to be fixed.
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Old 11-11-2010, 04:42 PM   #4
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Last in line, again.

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Originally Posted by dashonthedash View Post
Forest River openly encourages people to buy from "local dealers", and at the same time, I have heard that they are now requiring that local dealers buy a minimum number of units from them in order to continue to be authorized as a local dealer. This practice, unfortunately, has spread to several of the major manufacturers. If this continues, it could put a lot of local dealers out of business, and people would only be able to buy motorhomes from high-volume online and national companies such as RVDirect.com and Camping World. What is wrong with this picture?
And should there ever be a court battle over the legitimacy of this squeeze tactic by the RV manufactures, who do you think is going to prevail. Yep, you guessed it, the same big-biz corporations that now control political elections.~~~~The blue collar stiffs, sadly, last in line again.

My 2 cents.
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Old 11-12-2010, 10:55 AM   #5
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And should there ever be a court battle over the legitimacy of this squeeze tactic by the RV manufactures, who do you think is going to prevail. Yep, you guessed it, the same big-biz corporations that now control political elections.~~~~The blue collar stiffs, sadly, last in line again.

My 2 cents.
There really is no court battle to be had. When someone picks up a franchise they pick up the restrictions that go with that franchise. A lot of the franchise agreements are really one sided and I'm sure that the RV business has a whole bunch of agreements that are really one sided.

On the other side of the coin, as a manufacturer, I wouldn't want to sign up a dealer who is a dealer in name only. If someone is going to carry my products then they should have those products on hand and not just put up a sign saying they sell my brand when they are just trying to generate traffic for another brand with a better mark up.
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Old 11-12-2010, 09:44 PM   #6
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By the same token, the manufacturer in Indiana shouldn't be telling the dealer in west Florida what to stock. The dealer knows what his clientele wants better than the manufacturer. Don't make me carry stuff that people in my area aren't buying.
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Old 11-12-2010, 11:03 PM   #7
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Frankly, imho, some dealers are not doing their job in advertising, carrying examples of product, and offering competitive pricing. All they offer is a rack of old brochures. That was one reason I looked elsewhere.
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Old 11-13-2010, 08:39 AM   #8
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In many industries the discounts available to the dealer are based on the volume of product purchased. Sometimes this volume is generated not by sales from a specific location but from sales from a number of locations with common ownership. Sometimes this volume is generated from a buyers group of competitive companies with different ownership. These types of dealers put pressure on their suppliers for preferential pricing at the peril of taking their business elsewhere.

In the RV industry people will often depend on an independent local dealer to provide the physical location to see inventory and discuss product (often with commissioned sales people who don't get paid until they make a sale) and provide the after sales service. Many people (including yours truly) will broker the best deal they can using the internet and other modern technology and make their purchase from someone other than the local dealer. That means that the local dealer has made the investment in the inventory and the online dealer has profited from the local dealers investment.

The lower volume independent dealer pays more for the unit and has invested in inventory and paid to carry it. If the local dealers worked with the same discounts as the larger volume dealers it would make for a more level playing field.

We have a GT 350TS on order which we expect to take delivery of in a few weeks. I did most of my research online and vistited the local dealer to tour the units they had in stock. After I made the best deal I thought I could with an online dealer I told the online dealer that I would show the offer to my local dealer as I felt they had unwittingly made an investment the sale as well. I told the online dealer that I would likely being getting back to them with an order. Much to my surprise the local dealer came to the table with an offer that was close enough. I called the online dealer back to thank them for all the help they gave me while doing my research. The local dealer made quite a bit less than normal on this deal but at least they made something for their investment and I will be able to depend on them for service (I hope).

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Old 11-13-2010, 08:59 AM   #9
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Can someone with inside knowledge tell me why local dealers aren't required to do all warranty work in their franchise agreement by the manufacturer regardless of where the RV was bought? I know the manufacturer probably won't pay the dealers absurd regular labor rate. But in every franchise agreement there should be a provision to cover all and any warranty claims regardless of origin.

Can you imagine what a mess the auto industry would be if they only serviced their own local sales and refused outside warranty work? Well for one thing congress would be all over them, have a hearing and pass a law by Friday.
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Old 11-13-2010, 09:35 AM   #10
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Mike,
I'm suprised that the online dealer did not pull the offer from the table after you informed him you were showing his offer to your local dealer. I've done a lot of looking and pricing with online dealers and most tell me up front that if I show their numbers to local dealers, all bets are off.
Makes me laugh. Do they really believe I'm not smart enough to shop around....everywhere? The internet has really opened up the ability to get pricng down as competition is no longer just within a local market, but nationwide.
Seems to me a wise RV dealership would concentrate on outstanding service and just offer ordered units much like the wholesalers do. They could lower their overhead, cut margins on the coach's, and offer more local used units.
Happy customers tell a few, unhappy customers tell everyone!

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Old 11-13-2010, 09:52 AM   #11
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Can someone with inside knowledge tell me why local dealers aren't required to do all warranty work in their franchise agreement by the manufacturer regardless of where the RV was bought? I know the manufacturer probably won't pay the dealers absurd regular labor rate. But in every franchise agreement there should be a provision to cover all and any warranty claims regardless of origin.

Can you imagine what a mess the auto industry would be if they only serviced their own local sales and refused outside warranty work? Well for one thing congress would be all over them, have a hearing and pass a law by Friday.
intersting point but local ford/lincoln dlr from whom i have purchased5 new vehicles in 7 year all higher end ,all maintance on the vehicles says sorry we dont do mh not even oil changes, they want my wife mark lt they continually tell us top dollar have customers waiting ya think they might just wanna sell one more new auto. i will rethink my next ford/lincoln car and service b4 they get my cash
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Old 11-13-2010, 10:08 AM   #12
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intersting point but local ford/lincoln dlr from whom i have purchased5 new vehicles in 7 year all higher end ,all maintance on the vehicles says sorry we dont do mh not even oil changes, they want my wife mark lt they continually tell us top dollar have customers waiting ya think they might just wanna sell one more new auto. i will rethink my next ford/lincoln car and service b4 they get my cash
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Brian, you have such a way with words.
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Old 11-13-2010, 10:15 AM   #13
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Brian, you have such a way with words.
ya but i realize sometimes not a good way
i tend to write as i speak and this is what ya get
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Old 11-13-2010, 10:37 AM   #14
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We have a GT 350TS on order which we expect to take delivery of in a few weeks. I did most of my research online and vistited the local dealer to tour the units they had in stock. After I made the best deal I thought I could with an online dealer I told the online dealer that I would show the offer to my local dealer as I felt they had unwittingly made an investment the sale as well. I told the online dealer that I would likely being getting back to them with an order. Much to my surprise the local dealer came to the table with an offer that was close enough. I called the online dealer back to thank them for all the help they gave me while doing my research. The local dealer made quite a bit less than normal on this deal but at least they made something for their investment and I will be able to depend on them for service (I hope).

Mike
I went to an online dealer and got a quote for the unit I wanted, checked out a stock unit at a dealer several hours away, then went to my local dealer. After an expected warning from the salesman about "online dealers", they came back with an offer that was close, and I took it. The threat from Forest River to drop the dealer came a few days later. I have had a long-time service connection with this dealer, and I made a point of it during our conversations, so both the dealer and I have a strong interest in how this scenario plays out.
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Old 11-13-2010, 10:43 AM   #15
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Originally Posted by dashonthedash View Post
I went to an online dealer and got a quote for the unit I wanted, checked out a stock unit at a dealer several hours away, then went to my local dealer. After an expected warning from the salesman about "online dealers", they came back with an offer that was close, and I took it. The threat from Forest River to drop the dealer came a few days later. I have had a long-time service connection with this dealer, and I made a point of it during our conversations, so both the dealer and I have a strong interest in how this scenario plays out.
which dlr was threatend w/warning
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Old 11-13-2010, 10:57 AM   #16
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Originally Posted by dashonthedash View Post
I went to an online dealer and got a quote for the unit I wanted, checked out a stock unit at a dealer several hours away, then went to my local dealer. After an expected warning from the salesman about "online dealers", they came back with an offer that was close, and I took it. The threat from Forest River to drop the dealer came a few days later. I have had a long-time service connection with this dealer, and I made a point of it during our conversations, so both the dealer and I have a strong interest in how this scenario plays out.
What's the connection between your purchase and FR threat to drop the dealer? I'm missing something here.
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Old 11-13-2010, 11:08 AM   #17
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There is no connection, the timing is just coincidence, but I wanted (and obtained) assurances from FR that service would be covered before telling the dealer to go ahead.
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Old 11-13-2010, 06:33 PM   #18
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In time the online dealers may become less and less a factor in the market place. I am sure pricing in the marketplace is already more competitive. Here in Canada the prices that most dealers charge for their products are unbelievable. I purchased a TT in 05 from RVW and saved over 12K over the price quoted by a local dealer.

I own a business and get quite annoyed when a potential customer takes the benefit of our knowledge and experiance in choosing a product and/or service and then uses our knowledge and experiance to buy the same product and/or service from another firm because of a small extra discount. That is why after I was quoted from RVW in 05 I gave the local dealer a chance to sell me the same product. They flatley refused to deal. That is why I was so surprised that they were willing to deal with me on the purchase of the Georgetown.
Things had changed since 2005 however and they are now proud to state that they had yet to lose a deal to a US online retailer. In time they will have to generally lower their prices to keep their local market share. The online dealers will of course not be able to offer the same level of service and will likely fade away in time.

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Old 12-03-2010, 10:12 AM   #19
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Having dealt on both ends of the equation myself (not RVs) in the past when a customer wants to have a price that leaves me no margin I'm not interested in the business as in the long run I won't make money on service, etc either as they will try to nickel and dime me to death on everything I do.

As a customer I want the best deal and when I have trouble I want to be able to go some place I am both respected and feel being treated well. Online does only one part and many people already see that.

If we all bought from online dealers where would we go for service? The online dealer has no trouble discounting so hard as he doesn't have stock (or very limited) and the units stay typically for a very short time - so financing does not really bother them. However your local dealer has a huge inventory that is financed by the bank and they are asking him to pay interest on the units (just like when you finance).

So in the end we bought locally because the prise difference was reasonable for me and the little bit I felt I would save (considering going to pick it up) wasn't worth it at all.

Reiner
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Old 12-03-2010, 01:20 PM   #20
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Having dealt on both ends of the equation myself (not RVs) in the past when a customer wants to have a price that leaves me no margin I'm not interested in the business as in the long run I won't make money on service, etc ] either as they will try to nickel and dime me to death on everything I do.

As a customer I want the best deal and when I have trouble I want to be able to go some place I am both respected and feel being treated well. Online does only one part and many people already see that.

If we all bought from online dealers where would we go for service? The online dealer has no trouble discounting so hard as he doesn't have stock (or very limited) and the units stay typically for a very short time - so financing does not really bother them. However your local dealer has a huge inventory that is financed by the bank and they are asking him to pay interest on the units (just like when you finance).

So in the end we bought locally because the prise difference was reasonable for me and the little bit I felt I would save (considering going to pick it up) wasn't worth it at all.

Reiner
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