What’s up with Wyoming?
If I understand the news out of Wyoming last week, the legislature lifted a long-time ban on out-of-state dealers selling RVs in the Cowboy State. Bureaucrats said the measure was designed to make it easier for the state to attract big RV rallies. But if you read between the lines, the whole deal was created to help a government-financed business essentially compete with the RV dealers who financed the event center project from the get-go. “The benefit locally and statewide is in the tax revenue generated by those attending,” said state Sen. Michael Von Flatern, R-Campbell County in a story appearing in the Gillette News Record. Of course it is. Why else would a government of the people launch headstrong into a business arrangement in which they fill their coffers over a seven-day period by taking money out of the pockets of local RV dealers who, for the next seven years, will have to clean up the mess and pay even more taxes?“The sales tax in the local area rises dramatically for that week, but equally important is that the whole state sees a boost in sales tax through campground use, groceries and fuel purchase, etc., and admission to our state and national parks,” Von Flatern added. How noble. What a surprise that Von Vlatern represents the same county in which the Cam-plex is located. He should be put on the center’s board of directors. Gee, I wonder if the state could have experienced all those benefits by allowing just licensed Wyoming dealers to sell RVs? They have in the past. In 2000, the Cam-Plex center in Gillette hosted 5,406 units at a single rally. This year, they’ll host 1,200 and another 1,500 in 2008. FMCA must have laid down the law and announced they won’t return to Wyoming until their loyal out-of-state sellers can participate.
But, apparently, there aren’t any RV dealers in Wyoming capable of selling units at rallies. Wyoming dealers are probably too focused on quality long-term customer service to generate the amount of tax revenue Campbell County officials need to pay for the $42 million rally complex. Rally sales requires a special ability to swarm into an area, set up a display, price units to undercut local business owners, accept a check and move out of the area before the first service work needs to be done. The new law does require out-of-state dealers to pay $500 for a permit, $50 for two demonstration license plates and $5 for 10 temporary permits to be issued to buyers. I wonder how that compares to the costs Wyoming dealers incur annually for various licenses, fees, taxes, charges and assessments in order to support those seeking to undermine the dealers’ ability to grow profitable businesses. I also wonder if those fees are waived for local dealers who paid for the complex and now want to participate in the rally. I doubt it. A similar bill failed when it was introduced in the Senate a year ago because of its effect on in-state dealers. But it was assigned for study to the Transportation Interim Committee, on which Von Flatern served. So, in response to concerns about the impact on dealers, the state assigns the legislation for further study to the same elected officials who sponsored the measure in the first place. That’s great government.
“Over the interim, we listened to the opposition and supporters and crafted a bill that was fair to all concerned,” Von Flatern said. The “protections” created by the state include limiting out-of-state dealers to just three permits per year. That should help the locals. If big rallies can be organized at the start of the selling season, in the middle of the vacation season and when snowbirds are getting ready to leave the state, then Wyoming’s dealers will have all winter to sell RVs to their hearts content. Yes, a provision gives Wyoming dealers the first right of refusal. Local dealers can say “yes” to “buying” a spot on the rally grounds before the option is given to out-of-state dealers. Here’s how this works. Cam-plex officials call some of the biggest rally sellers in the country and give them warning that a big rally is being planned. Then they ask the dealers how much they are willing to pay for seven days of intensive selling. The out-of-state dealers offer a price. The dutiful bureaucrats increase that by 25 percent and set “the price” for participation. Local dealers are given the opportunity to pony up at the excessive rate. When they decline, the bureaucrats return to the out-of-state dealers who will grumble, but pay the higher rate. But, if too many outsiders grumble, then the officials can lower the price for them. But the officials will have fulfilled their legal obligation by first offering it to the townies. Remember, it’s all about tax revenue, not business development or loyalty. What surprised me most was the willingness of local dealers to fall on their swords over this issue. According to the Gillette News Record, Phil Stahla, owner of Eastside Motors and RVs, viewed the legislation as both good and bad. “The negative is that you have out-of-state dealers come in and sell their units in our territory,” he said. “But it is good for the county because it brings in revenue for the county. It brings us business, too, because we do a lot of parts business.” Phil appears to be willing to give up profit from the sale of units in order to keep his county taxes down. Besides, he’ll make $10 on a parts sale to a customer who ventures away from the rally site. He must not realize some of the out-of-towners have started bringing trailers full of high-margin accessories to set up temporary parts stores at the rally displays in hopes of keeping buyers near their sale units a while longer.
This whole new cowboy rally law doesn’t make sense to me. A better law would have given local dealers the ability to give temporary sales licenses to out-of-town sellers who could make great commissions while letting the local dealer profit as well.
Perhaps when all is said and done, Hollywood will come to Gillette to film a sequel to another wildly popular cowboy movie. They can call it Brokeback Rally, but this time local business owners will be the ones to get it in the end.
April 30th, 2007 at 3:39 pm
I read with interest the April 10 misrepresentation “What’s up with Wyoming.” The author obviously completed little research or he intended to mislead readers. The legislation allowing for out of state dealers at RV rallies in Wyoming requires that all Wyoming dealers receive a three month first right of refusal to purchase trade show space in any RV rally. This clearly protects and promotes Wyoming RV Dealers. The legislation can be found on the State of Wyoming Legislative Web Page. It is SF 111.
April 17th, 2007 at 9:50 am
Having been through a couple of these as a distributer and as a local just wanting to see what is going on I can tell you that it does not increese traffic on the lots of the locals. These guys are good at keeping the rally people at the rally. Buses go back and forth to a few local highlights and back and forth to Wall mart. That is it. If someone needs parts or service they are already there.
The locals are asked to advertise and even given great information on how to sell at the rallys. It is like shooting ducks in a barrell, they are told, but to compete you are giving it away. Factories sponsor the people who are there and who are the pros.
The locals don’t stand a chance. The information they are given is only hot air so they are not in the way of those who are paying to be at the show.
Bret Folkman
April 13th, 2007 at 9:08 pm
After reading Mike Ingram’s insightful response I did a little research on Wyoming. My conclusion is that we all spent a lot of time talking about something that is probably going to be a non-issue in the great state of oil rigs and tourism, as Mike described it.
This is going to be like the fight where the opponent is nowhere to be found, and didn’t bother showing up!
I checked all the dealer listings in the RVDA 2006 directory and there are only six entries. Now if there are dealers in Wyoming who are not part of RVDA, we shouldn’t count them in the discussion anyway. If they dont’ want to join their own association, we probably should not spend any time worrying about them!
Two other dealers are primarily trailer sales with little visible motorhome activity on their web sites. A third company, listed as a motorhome center, doesn’t even have a dedicated web site (none that I could find anyway) and only had an e-mail address listed on an RV sales/search Internet site.
So why have we all expended so much time and energy on what should be a great rally for anybody that wants to show up and sell motorhomes, no matter where their physical location is. It looks like most of the dealers in Wyoming don’t want anything to do with motorhomes and certainly can’t play in the big leagues with the companies that sell mid-to-high end luxury units and the only buses they have seen lately say “Greyhound” on the side, not Prevost or Newell!
I think the State of Wyoming had only one thing on their mind when they changed the law, and it’s called TOURISM dollars, and Mike hit the nail right on the head.
If I was an out-of-state dealer I’d be making reservation real soon and very willing to pay some fees and taxes in return for the ability to sell products to people who want to, and are quite capable, of buying what I have to sell. Because it sure looks like they are never going to find it in Wyoming unless there is an FMCA Convention coming to town!
April 12th, 2007 at 5:21 pm
To properly discuss this topic, you should first gain some knowledge about the State of which you speak. First of all you are discussing the 9th largest State in the U.S. that is inhabited by less than 500,000 men, women and children. Of those, approximately 900 are employed by either RV dealers or manufacturers with a third being the latter located in Casper.
Wyoming is primarily dependent on two things; Oil and Tourism. The other economic and possibly stronger power base is the founding fathers which are cattle and sheep ranchers. They own the State in conjunction with the federal government. They are also the same two entities that control the oil leases.
It is now and always has been the intention of these two parties that outsiders visit and then leave. The only exception to this is when a larger work force is necessary to get the oil and other natural resources out of the ground. When those markets slow down, the same people leave. It is a natural cycle in Wyoming that is controlled by those in power.
At the current time there is once again a dire shortage of manpower to harvest those resources and as they arrive there is a huge need for increased services to support them. This is the primary reason they are trying to attract the RV community. A mobile workforce that brings their own home and can provide their talents in the field or at the drive-up window at McDonald’s. The beauty of it is that when the boom is over, the power brokers will open the gates and usher them out from whence they came and return their State to the same bliss they have had for the past century.
For those of you that have such great concern over the poor Wyoming RV Dealers why don’t you call one of the dozen tops, that really might care. I think you’ll find that they are smiling ear to ear at the prospect of the increased traffic.
As to this being an Industry problem . . . perhaps, but you’re barking up the wrong State.
With Regard,
Mike Ingram, Co-Founder, Teton Homes, Casper, Wyoming
April 12th, 2007 at 11:10 am
Loren is right, it is in fact competition and I’m all for fair competition among competiting entities but without damage to the buyer. We do not have that situation here. We have clearly defined problems in areas such as product quality and customer satisfaction. The industry must find a way to allow for the healthy competition enjoyed at such events but not at the expense of short term monetary gains and long term customer dissatifaction that causes them to leave the industry.
Mike also brings up excellent points about the business that comes into the community that can hosts these large rallies. There is significant revenue realized from 4,000 to 5,000 motorhomes spending a week or so in and around the rally site. Local dealers do indeed have a shot at many prospects they would probably never have met, and at a much lower lead cost than the national players that spend millions on advertising up to, and during, the rally.
I still say it is an imperfect system and everyone knows it, but we really are not doing much as an industry to protect the interest of our most valuable possession … the customer … who is damaged by the process and the ill feelings among the selling dealers and those dealers asked to service an unhappy customer when something goes wrong.
It’s an industry problem that needs an industry solution!
April 11th, 2007 at 4:58 pm
I think a key issue here that keeps getting overlooked is this: Most of the participants of these rally’s are from out of state too. The local dealers get a shot at some folks who they would normally not ever see. Local dealers get a chance to sell to customers that will leave and expect service back at home. So this is not a loose loose situation. The dealer I work for participates in shows and rallys in our region of the country. If a rally is held in my vicinity, it’s much cheaper for us than if we have to go several hundred miles away to attend a convention.
We had almost the exact same situation here in my home state and the outcome was similar to Wyomings. Our legislature passed laws in 2005 that, among other things, prohibited sales by out of state dealers. When it was learned that we would loose some big conventions, the part of the new law prohibiting sales was changed to allow sales at conventions that were to be attended by 2,500 or more participants. The local dealer group protested the last change but were unsuccessful in getting the prohibition reestablished. The group of dealers that pursued the prohibition was composed almost entirely of locals who had never participated in a large rally and , I think, missunderstood the make-up of the rally participants. Most of the participants being from outside the local area. Local people who come in to the coach displays at a rally, usually attend on a day pass and rarely buy.
April 11th, 2007 at 2:29 am
It’s called competition. Welcome to the 21rst century. You guys can sit around and complain all you want but competition is good for the consumer, the industry and the overall economy. If the Wyoming dealers are smart they’ll jump in there and compete for the sales that are going to happen at these rallies. They might actually sell a few and make some money. Yea, they might have to cut their price a bit but there’s always the back end profit as well.
April 10th, 2007 at 9:54 pm
This is a complex issue that raises the level of frustration and disgust with everyone that gets caught up in the web that is spun at large rallies and events that have local and out-of-state dealers.
There’s enough blame to go around for everyone on this issue. The situation has been around for years but even the dealer’s own association has failed to find a solution to the problem. Large rallies, whether they are conducted by FMCA, AGI and their event group, or some other organization will try to get as many dealers participating so that attendees have a great selection of product to choose from.
As Randy points out though, the reasons these events exist is because the dealers (in any particular state) have not gathered around to protect themselves or even attempt to find an effective solution that might work for everyone, if such a solution can actually be found.
Make no mistake about it, these gigantic rallies are “buying” shows and everyone knows that, which makes this kind of law even more baffling when you consider how much the Wisconsin dealers have to lose at the end of the day. Did they just lay down in the middle of the road with a big sign on their back that read “roll over me, I’m stupid?” They could have at least shown up and provided a good fight before surrenduring to their fast-talking, snake oil politicians that hand fed them a steady diet of nonsense … and they believed them?
There has to be a solution to this issue, but this isn’t the one that I would throw in the middle of the table and ask everyone to sign off on. This is not an easy task, but running away from the root of the problem, as they have just done in Wisconsin, isn’t going to get the industry any closer to a resolution.
This one stinks, and once again it looks like a local politician is the source of the odor.
April 10th, 2007 at 7:14 pm
Here is a good example when a dealer association does not exist. The Wyoming dealers should have been all over this like has been done in Oklahoma and many other states.
The reason given for passage of this new law unfortunately appeared to be based upon incorrect information.
They talk of campground usage, the rally people stay at the rally, I doubt that many stay at campgrounds.
Sales tax collection, RV sales to out of state residents do not generate sales tax revenue in the state where the sale is made.
I do agree that while the rally is in progress that the local restaurants, fuel, propane and retail establishments do create sales tax revenue while the rally is going on. Is the lost sales tax revenue from the states RV dealers going to be offset by a few less people who may not attend a rally if the out of state dealers are not allowed to be their?
While some people who attend a rally do purchase some new RV’s, how many would come to the rally for the socializing, education and the other events that are held at the large rally.
The reason states require a dealer to be licensed is to protect the consumer. An out of state dealer comes in makes a sale and leaves the problems with the local dealer who may not be too interested in helping the unfortunate consumer who bought the problem RV.
The problem really gets unfortunate when the consumer has issues that are not of warranty in nature, the manufacturer is not going to pay a local dealer to teach the consumer how to use their new, complex rig.
When the consumer is hurt our whole industry suffers, short gains are often long term losses.
April 10th, 2007 at 2:38 pm
Phil Stahla is a perfect candidate for Freedom Roads to consider buying…after all, he’s already bought the political line of bull…the corporate one won’t taste any worse.
How can any dealer, in any state, after investing in property, buildings, inventory and people, want to let a dealer from out of state to come in their are of business to compete…and for almost nothing! The only persons that benefit from a rally are the out of state dealers (if they have a successful sale), but mainly the manufacturers.
I wonder how much Von Flatem puts in his pocket for these events…if he’s pushing for an out of state business to take money out of his own voters’ pockets, he has to have a real good reason.