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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.

Quote:
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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Quote:
Originally Posted by Boyd View Post
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).

Mike
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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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