Ignoring MSRP and Predatory Internet Sales
BY DANA NELSEN
Recently a dealer called me up, told me he sold more than 1,200 RVs a year, and then asked me to do a story on his “dealership.” When I get such calls, I try to ask a few preliminary questions to get a basic understanding of the size and scope of the business just to see if it is a good fit for the magazine. When I asked him what part of the country his dealership was in, he informed me that he was located on a farm on the southeast coast. I’d never heard of an RV dealership being located on a farm before, so naturally I became curious—especially with the number of units he claimed to sell.
After probing deeper, I learned that 100 percent of his new unit sales were from the Internet. Now he had me really curious. Was this some sort of Internet marketing/sales guru?
When I asked how he sold so many RVs, he told me that he could sell units at prices substantially lower than dealers anywhere else in the country. He said consumers literally saved thousands of dollars on each RV purchase merely because of zero dealership overhead. He didn’t have a showroom, a service department, a parts store, or any of the many other business costs that others dealers face. This savings translated into a direct savings for the customer.
When I asked how warranty issues are handled, he smugly informed me that consumers are told throughout the buying process that to receive the savings, they must buy the unit “as is” and that the manufacturers have warranty repair centers throughout the country. Because most consumers who purchase from him are from other areas of the country, he told me he wouldn’t be able to service the RVs anyway being located so far away. The dealer said he refers customers with problems to their local dealership for warranty solutions.
Wanting more information about the man’s business model, I asked him how the manufacturers he carries feel about his business strategy. Did it violate his dealer agreement? He told me that with the volume of RVs he sells, manufacturers don’t seem to mind how he moves them.
When I asked how he gets around advertising a price different from MSRP, the man’s story got really good. He told me that rather than advertising the sales price of the “for sale” RV, he would show the deeply discounted price of a “recently sold RV” as an example next to the “for sale” unit. The “recently sold” RV would be the same make and model as the “for sale” RV and next to the “for sale” RV it would simply say, “Call for sales price.”
After hearing the scope of the man’s business, I decided doing a story on his business is probably not in the magazine’s best interest. In fact, his business strategy has me deeply concerned with how it affects other dealerships and even the industry as a whole. I refuse to condone what in my mind is questionable behavior. I am fairly certain there are no federal laws preventing what he is doing and since most of his business crosses state borders, I don’t think state laws are applicable, but I’m not certain. This seems to really come down to whether manufacturers will protect their network of other dealership partners across the country.
In the spirit of keeping this blog from getting overly negative, I won’t mention the dealer or the manufacturers he represents, but I would be interested in dealer’s thoughts on this practice.
May 20th, 2008 at 9:44 am
I’ve read most of the responses, and want to give my opinion on this. As far as the gentlemans claim of moving 1,200 RV’s in one year. Without a physical location / service, I find it hard to believe. I will say that the RV dealer that I worked for sold 2500-3000 units a year. One location alone sold/delivered 1500 units in one year. This was having multiple locations, and having a lot of shows. At the shows we would sell on average 150 units in one weekend. As far as the internet, we did a little over 11 million just in internet sales. That was in 2004. The dealership was sold to Freedom Roads in early 2004.
The internet is the most powerful advertising tool a dealer has. Most dealerships aren’t using it to its full potential. I don’t agree at all with just selling off the internet, and not having a physical location. We dealt with customers buying a unit we carried from another dealer in a different state. The thing that we looked forward to was them coming in for service. We had no obligation to speed up the repairs. Our customers came first. Dealerships have to embrace the internet and internet selling or they will not survive. One of the dealerships I worked at, I sold a Saturn Vue to a woman from Oklahoma. Our dealership was in New York. She flew in to Buffalo, and drove the vehicle back to Oklahoma to pick up her friend and to go to California. Her daughter was in college in California, and had totalled her vehicle. Why would someone go thru all that when I’m sure that there’s thousands of the same vehicle for sale between California and New York? That is just the way consumers are, they aren’t afraid to travel.
January 30th, 2008 at 11:51 pm
Ok guys what is up with dodging the dealers names?? Go to bestrv.com and check out the truly professional format with low prices all back by the manufacturers.
No service, no parts, half acre lot.
You should each name the dealership that follow this practice and get it off your chest and then GET OVER IT!
The manufacturers have to support this type of business. They need to move units and stay in business as well. Never forget we all pay their retail price. It us that must negotiate and compete. Get over it. Do it your way and feel good about it. You can make money in service too. No one has been able to stop walmart. Lots of businesses still successfuly compete. Good luck to all the full service dealers and may the dealers with out service be tied up in court by their lack of ethics.
What goes around comes around.
January 22nd, 2008 at 2:55 pm
I have just completed reading the replies above and failed to see another issue that was not addressed. Generally an individual is not going to part with thousands of dollars without looking at the product. With the exception of viewing a friend’s or relative’s RV, some sales person spent their time explaining the features and benefits to the prospective buyer. Brick and mortar dealerships are actual the sales force for the internet “RV Wholesale” dealer. The best option for the local dealership is to bring this point to their supplier demand a change and then make a decision if representing that supplier is in their best interest. Manufacturers are very aware of the situation, and some of them are doing something about it. Hey Dealers! - Stop complaining and do something about it.
January 22nd, 2008 at 10:46 am
Certainly there are “internet dealers” who have no service facility,because I have a ‘once sold mobile homes’ person who now is a RV Dealer,with no service or parts facility, and only a quarter of a mile from me.A very old well-known manufacture is suppling his lot.This is a manufacture that we used to purchace from.Don’t you think they are glad to have their products back in my area?Yes,this manufacture has contacted me a few times and got my service dept to fix their mess.No more freebees…. that is my stand.
I recently applied for a labor rate increase and my “largest…most popular” manufacture said we must first sign their new “warranty policy”.Their “warranty policy” requires our dealership to ‘timely’ service any of their brands,regardless if I sell the customer and regardless of the product line.Why do you think this huge towable manufacture believies we can provide service to so many products we do not carry and those we did not sell.This same manufacture wont pay any administrative cost relating to picture taking and corrospondance,moving the unit and diognosing the problem and boxing up the old parts…and they only compensate us 15% on parts.It is a act of congress to recieve credit parts sent wrong.
The last time I checked,the manufactures were profitable and have not taking the losses that most of us dealers have for aprox the last three years.Our grosses have suffered and our cost of doing business continues to rise!
What about those big purchasing discounts?That is going to cause some to profit while others to “give product away” to compete.Question…Could the manfactures sell that peice for $ 2700 less and make a profit? If yes,they are rolling in dollars.Why don’t they set up their own service centers for those “fiberglass front walls” that they only pay 5 hours to replace,and it takes 10.
The fun seemed gone… but alas, a new way to get happy.We will be charging every non-transit warranty customer,who purchased elesewhere a fee to take care of moving their camper and administrative duties(photos,faxes,e-mails,phone calls,parts purchacing and recieving and return handling)Travel trailers $100,5th wheels $150 and 5th wheels with a goose adapter $200.We must also charge a “diognostic fee” of $50 per appliance or system.
This is my “get happy” solution.I will be happy to service the masses…but not for free.
(spell check would help me too)
January 19th, 2008 at 11:52 am
56 responses so far to this blog seems to me it is an Industry issue that is huge. It is not that this one dealer’s numbers or facts are correct or not, it is the fact that most dealers like myself that have a “business model” that manaufacturers say they want to do business with is actually being tested by a new business model that has a growing number of “internet only dealers”. If in fact I need to change my business model to be one of those, it may come to that. My beef is that manufacturers are printing internet policies to “protect the current RV Dealer business model” and yet looking blindsided at what is really going on and taking the short term profit along with the “internet business model dealers”. Short term gain for them, long term pain for customers. SERVICE, anyone that thinks that us “current business model RV dealers” are just whining because we are just wanting to charge more for the unit and make more money, needs to spend just one day in our service department to see what it takes to keep a retail customer happy. Take for instance a unit sitting in our service bay for two weeks because the front cap has came in wrong for the 3rd time from the manufacturer. Costs, costs, costs for us, on a unit we did not even sale. Then we have to make sure we do the work within the “fair flat rate” of the manufaturer.
Simply, in this industry right now, there are too many of us (dealers and manufacturers) that only care about me (the individual short lived advantage of relying on techology (internet selling) for their strenghts. This leaves them (the customer) unhappy in the end with a bad quality experience. This is happening right now, if the industry chooses to continue to ignore it, how sad we will miss the opportunities that we passed by working together as an industry to find win-win solutions.
January 18th, 2008 at 8:40 pm
Dana, I hope you have learned a lot from your blog. The Truck Accessory Industry is different from the RV Industry. I’m sure you realize that if you contacted the “Phantom” dealer’s manufactures, you are highly unlikely to get them to admit that they did know of the dealer’s business plan. I believe that the majority of manufacturer’s sales people actually visit the prospective dealer verifying his location, existance, and facility prior to signing him on as a dealer for their brand. I disagree that the number of units sold created the firestorm from readers. I believe it is the business plan and it’s negative, longterm impact on the consumer, and hence our industry, that created the firestorm. I think most RV dealers look beyond the next sale and focus more on the long term survival of their businesses and the impact they have on their employees. I majored in business and not journalism in college, but I seriously question if an editor can be a blogger in his own publication. As an editor, I feel you are obligated to be a responsible journalist, unless you choose to work for a tabloid. I certainly hope that the new leadership of RVTD has not changed course to become a tabloid. You could certainly be a blogger if it were in an arena to which you did not bring your professional credentials. You would do well to never publish unconfirmed information (your point number 4) as it alows you and your publication to be used by the person supplying the information. To your point number five, anyone contacting a journalist on a subject of major industry importance, should never be suprised if his comments end up in print. When writing in an editorial format, you do have the right to express your opinions where as a reporter you do not. In reality, an editor can seldom successfully seperate himself from his publication. I have never viewed the purpose of RVTD as being a forum for discussion. I view it as a professional publication to be relied upon to keep me informed on the news and trends of an industry I love. As to history, I believe the editorial format of this magazine has been used to inform and strengthen our industry. I hope you allow RVTD to be a strong advocate for our industry as well as a conscience should damaging business practices begin to surface. The comments you have drawn with your editorial are not an indictment of the internet. The internet serves our industry well and offers many marketing opportunities. Selling a service intensive product like a recreational vehicle to a consumer who will need this service and telling him you will not participate in his obtaining the needed service, is not a good use of the internet. Your comment, “Journalism is unbiased and confirmed hard fact and blogging is nearly the opposite” is an accurate statement. RVTD needs you to function as a journalist and not a blogger. As you can see, us “bloggers” are a dime a dozen and come out of the woodwork. I hope this will be a positive learning experience for you and will be a source of professional growth for you. You seem to be a nice person and someone I can come to respect. If you do find that you can put your resume away, I’m confident we will see some good writing from you in the future.
January 18th, 2008 at 6:01 pm
Well this is quite a firestorm and I certainly didn’t intend to just move a web click counter. I haven’t responded because I’ve been heavily traveling at StagParkway and haven’t had an opportunity to respond. I apologize for the delay. I’ll admit that this is exactly the third blog I’ve ever participated in in my life so I am a little new to it and didn’t realize everything was so time sensitive.
As far as doing the story, there are several reasons why I don’t think it is a good idea despite the criticism.
1. I haven’t had an opportunity to contact the manufacturers he represents to verify if they are aware of it. If they are unaware of his business practices, it could hurt reputable companies. I have no interest in doing that. Besides, I’ve already decided not to do the story, why would I investigate anything he had to say? I get many phone calls, some of them legitimate and some not so much so. The dealers story whether true or not (I’m just telling you about our conversation) are really not the issue here. In talking with him I realized that “THE ISSUE” is something that would be of interest for the readers, bloggers, dealers to discuss as he certainly couldn’t be the only one doing this if true. Bloggers have already confirmed that there are a number of people doing these things across the country. Just read above.
I suspect the reason this man’s story has garnered such a response from bloggers is the number of RVs the man claims to sell. Dealers selling smaller numbers the same way this dealer does are just as big of a problem according to many of the blogger’s comments above. This is an issue much bigger than one guy. Sure I could editorially crucify the guy but I suspect that isn’t a real solution to the larger issue here which was the purpose of the blog.
2. Verifying the number of RVs he sells can be difficult. Just like any dealership, I can’t call a manufacturer up and ask “Just wondering how many RVs you sell to (fill in the dealership name here) each year?” Rightfully so, manufacturers don’t give out that information. My hope is that all manufacturers take a strong hard look at who sells their products and stop doing business with dealers who don’t represent them well.
4. If what the man who called me says is true, (again unconfirmed) consumers have no trouble finding him on the web. Interested bloggers can probably do a web search to find out this dealer and any other dealers who practice these types of things. Readers certainly don’t need me for that.
5. It’s important that dealers and other industry members feel that they can call me up and have a conversation about industry issues without worrying about me dragging their name through the mud. If someone tells me something and then remorsefully asks for the conversation to be off the record, (although I rarely do this) I have to right agree or disagree.
I need to be fair and impartial when reporting in the magazine. This man and others honestly feel this is a legit way to conduct business. I think it’s clear that many readers disagree. As far as my personal views, (and the only reason I share this is because this is a blog where there is some leeway to be biased) is that the practices he mentioned were inexcusable and may be damaging to many of my friends who own dealerships out there. You will never see comments like that in the magazine.
There is a long list of business practices that people in our industry use everyday that I either strongly agree or disagree with, but my views are really pretty unimportant. This blog is, and all the blogs on RV Trade Digest’s website, are really about the men and woman who want a forum to discuss industry matters. My role is really just to provide a topic. Anyone could provide that topic. In fact, we have forums where you can even start your own blog strings. In the future, I’ll bring up other topics that I may or may not agree with for the industry to discuss.
I know in the past this blog was used in manners that I won’t let continue. Previously, I’ve seen blogs about companies and people that were very negative and in my and many others’ opinions very inappropriate. Those types of topics or comments won’t be a part of this website any more.
I welcome the free sharing of ideas even if I agree or disagree with them. Anyone who wants to talk about “industry issues” is welcome to post as much and whatever they like. But when readers want to talk about specific people or companies, we are skirting on dangerous ground. What saddens me the most, is this blog left the issue behind and instead keyed in on a manhunt.
One blogger above even attacked me as the editor because I simply answered a phone call. I guess I’ll have to get used to that in my new position. I’ll take the shot, although it may be a bit below the belt. This forum needs to be a place where open discussion is welcome, but in the future, I’ll delete comments that directly attack people or companies because it doesn’t strike me as beneficial to anyone, most of all the attacking blogger. It usually discredits anything else the blogger may have to say and makes people think less of them. I don’t want that to happen either.
I did want to address the “yellow journalism” comment. Blogs and journalism have nothing to do with each other. Journalism is unbiased and confirmed hard fact and blogging is nearly the opposite. It is generally the opinions of one person with a group of people who wish to comment on the bloggers opinion or the subject being discussed. None of it is confirmed fact. They are opinions.
You can trust that anything on this blog I say that happened actually happened. But if I say the Packers are going to win the Superbowl, it’s an opinion and you’re free to agree or disagree with me.
As a brand new member of the blog-a-sphere, I can tell you my next blog will probably be on what a bummer my first experiences blogging were. I want to end this on a positive note, so I guess all I can say is, “I’m really glad everyone got a chance to express their opinions on something that is clearly a very important issue in the industry.”
January 18th, 2008 at 2:45 pm
If this situation does exist at this level I believe most of the respondents here see the need to confront it. More harm than good will result in the long run for all parties involved in this kind of marketing. note - I would like to hear manufacturer comments on what they consider to be the MINIMUM requirements to be a retailer of their product.
January 18th, 2008 at 2:37 pm
The issue of buying a unit from an individual has nothing to do with this situation. When that customer comes to you, they are paying for their repairs, and most certainly deserve to be treated fairly. Those cash customer’s are a very important part of our dealership. The biggest reasons for not wanting to service a warranty customer that didn’t buy from you, is that most of the time, they shopped your dealership, and then bought their unit from your competitor, who undercut your price. If their selling dealer wasn’t too far to go to to purchase, they aren’t too far for the customer to return for their warranty service. Again, I state, you don’t make money on warranty. So now this customer has spent his good money at another dealership, and now wants you to spend your technicians time on warranty repairs that you aren’t going to make any money on. Besides that, there aren’t very many private individuals that are taking 1200 sales away from dealerships each year. (If in fact it is true)
January 18th, 2008 at 1:04 pm
I’m reading a lot of comments from dealers who want to give “priority service” to their customers, but charge a premium for people who bought their units elsewhere. What if I bought my RV from a family friend, or in some other person-to-person transaction? Am I to be punished for that, and should I not expect to be treated fairly and given good service when I come to you for work on my rig? Am I a substandard customer now? How is that fair?
What you’re suggesting, then, is that all used units must be sold back to a dealer before it gets resold to another RVer, or else they shouldn’t be able to get good service at fair prices from you.
What about all these people that do buy units online? They’re now members of the RVing community, and the more of them there are, the bigger that population grows, and the more people there are spending money in our sector. Would you turn them away and say they can’t be RVers if they don’t buy from you? Would you refuse to take their money? Would you choke off that segment of the population because you don’t like the way/place they bought their RVs?
I believe the industry is evolving. Maybe someday it’ll be a thing where people buy their units from an outlet, and come to other entities for service and outfitting. Maybe that’ll be the way it is, and everyone will find their niche in it. I’m not saying that undercutting is a good practice by any means. I’m just saying you’ve got to find your place in the new order of things if you want to survive.
January 18th, 2008 at 10:57 am
Dana, you have left us with nothing more than frustration and worry about the who, what, where, when and how. If that was your intention, congratulations, you have succeeded. If not, do a complete story, including naming the dealership, as it is, and the manufacturer. If this “Internet Guru” wants to brag about his accomplishments give him the forum to do so.
January 17th, 2008 at 10:46 pm
Ditto with most said here, especially with Chuck Marzahn. How can one person possibly sell 1200 motorhomes in a year? I’ve sold 3 motorhomes in one day three times in 15 years of sales and it took more than the operational business hours to do it. My income has steadily decreased as the internet has grown, yet with higher volumn of units. I still struggle with ethical selling and refuse to give it up. My love for this industry is declining also. I’m in Tampa now for the RV show and you should hear the stories…………
January 17th, 2008 at 12:27 pm
I don’t believe this story Dana. Why don’t you reply and verify if this place or business really exists. Most states have laws or should have laws regarding these practices. I asked earlier also, what is he supposedly selling, Motorized or Towables or both. Gives us some facts to see if this story is true. I doubt it.
January 17th, 2008 at 12:22 pm
We can write volumes here about internet sales…this is a relatively new area we are just begining to feel the effects of. I can take a position on either side of the free competition argument. But, if you sell it…I should not have to service it for you! You can’t have it both ways. I buy an item or two off of the internet or one of the major box stores that sell cheap. When I open the box I usually find a note that says do not return this to seller for service…contact so and so etc or send to factory. Excuse me! I bought it and paid for it and want to use it…NOW. Send it here and there and wait is not an option. I close the box if the item don’t work as advertised and return it for all my money back. Simply it is a return. I do not even tell them it is faulty. Then I simply go and buy another one off the shelf…often at the same store. Maybe these non service internet/dealers would wake up after a bunch of returns under the lemmon law. Who stands the liability if after three attempts the product brings about a lemmon law suit…the servicing dealer/s or the selling dealer with no service department. SERVICE *is* a big issue here! Dealers need to ban together by manufacturer and attack the problem. The RVDA represents too many diverse dealers to do any good for any one group. Break this down into smaller pieces and you have a chance for getting something done. And, do not let comments like Gene’s lul you into believing you are helpless and have no control or input and do not even try. That’s a sure way to defeat!
January 17th, 2008 at 9:51 am
This provocative article certainly raises a few red flags that call for additional facts before jumping to any conclusion. Here is the way I see this story line.
1. As Brent’s Jan. 16th response points out, the logistics of just moving 30 RVs a week is sufficient cause for investigation. I’ve moved a few and know the problems first hand. It takes a lot of trucks (assuming pull-behind TTs and 5th Wheels are the products) and dedicated drivers to move this amount of inventory. The drivers will not move the inventory for free (check the price of gas?). It is over 800 miles from RV Central to the SE Coast. It does not take a calculator to determine the cost of moving the inventory.
2. There is nothing in Dana’s article that suggests to me that the product being moved by the “farm” are all new. For all we know, they may be trade-ins, lot “dogs”, or private consignments. Who knows? Before throwing bricks at the Manufacturing Community for not showing much concern, I suggest we need more facts.
3. Almost all of the folks who have taken their time to respond to the article feel the need to discuss the disparity in Warranty repairs. Let’s face it. Warranties are a fact of life in the Sales business. They have been and they will be. But in my view, the real “meat” in this article is not about how to handle (or recoup) Warranty expenses.
4. If all of the aspects of this story are valid as presented, (and probably are), they I see this article as a Wake-Up call to all Dealerships. That Wake-Up call is loud and clear. It is saying “Learn To Live with the Internet” because it is not going away. I have checked with local RV Dealership friends and they report that their experiences with the Internet are nothing but positive. If we think that the Internet is the Enemy, then we had best surrender quickly.
Gene
January 17th, 2008 at 9:21 am
Can you imagine the ruts in his field?? LOL
January 17th, 2008 at 9:20 am
Look at the math. If he’s doin’ 1200 units at a conservative average of only 25K he’s a 30 mil dealer in New alone. Doesn’t seem plausible he’s not on someone’s radar…
Still, the practice exists.
Even if this guy were a phantom, non-existent “composite” of what’s happening, it should be a serious concern. Good comments. Where are the manufacturer’s responses??
January 16th, 2008 at 11:29 pm
1200 units a year. Can ANYBODY do math?? He moves 4 units a day. Yea, right. I don’t know if Dana is just coming up with a fairy tale to see the reaction, or if Dana is just gullible. Think about it, NOT HARD. If 30 units a week were moving thru his “farm”, SOMEBODY would notice. There is no way this “dealer” can move that many units. The logistics alone prove this a fairy tale.
January 16th, 2008 at 8:23 pm
Let’s hire E.T. for the job! How about it E.T.? Are you up for it???
Folks do something about the issues!!!!!
January 16th, 2008 at 7:02 pm
Its time to cut off the Manufacture, by not giving them credit for warranty claims, they should pay with a debit card like the extended warranty company’s do, also in Missouri we have a law that pays 30% markup on all warranty parts. Chapter 407, Merchandising Practices, Section 407.1338. Service the customer but make the Manufacture Pay!!
January 16th, 2008 at 5:11 pm
Well you all got me on a roll. I am an ex dealer and had these same problems. Let me crisp up a plan. Let’s pick on a manufacturer, anyone…WGO comes to mind. There are about 300 dealers. At a pinchy $500.00 each dealership they can pay one man $60,000 plus expenses for the first year to do the following:
1.Go to WGO and tell them he is the point man to develop a dealer organization of WGO dealers and is intersted in working with them to build a franchise agreement.
2. Collect info from dealers as to concerns they want addressed in the agreement. Such as warranty,territories,minimum requirements to qualify as a dealer etc.
3. Seek legal counsel regarding the kind of organization the dealers need to form as well as it’s powers.
4. Having gather’d the necessary data…sit down and write a draft franchise/dealer agreement.
5. Review with dealers and get approval. Present to WGO for comment/acceptance.
6. Finalize and implement…set up a governing structure for the WGO dealer organization.
7. Smile a lot!!!
January 16th, 2008 at 4:56 pm
I read one interesting thing in the posts above, maybe two. Warranty is a problem and has been. Franchise agreements are another. Here is the problem with that…you dealers are waiting for the manufacturers to create a franchise agreement. It ain’t gonna happen! Get off your dead butts, use the RVDA (and then, maybe not), get a list of all who sell certain products…form a fact finding committee…form a work committee to draft a franchise agreement…form a co-op or anything you wantto call it and present the agreement to the manufacturer with all the dealers signatures on it. Their choice is accept or loose all the dealers. Takes big kahunas but it can be done. Get to work and if none of you have the time…hire someone to do the leg work. One man can do a lot on this. You don’t need an army!
Quit whinning and do something about warranty too, at the same time, in the agreement!
January 16th, 2008 at 4:28 pm
I am amazed at what the manufacturers are allowing. The real RV Dealers are the ones that they should be loyal to, not a fly by night internet sales person. I agree that we should know which manufactures are supporting these internet scoundrels that just collect money, and have no other obligations to these customers. I don’t know about the rest of the dealers, but we don’t get rich off of warranty money. Sometimes you win, sometimes you lose; when it comes to warranty, you usually lose. Therefore, why would I want to do warranty work for a customer that purchased their camper on the internet? One of our manufacturers makes us sign an agreement that we will do warranty work for any/all customers that purchased their products. Now, if I have to service them to support the manufacturer, why won’t the manufacturer support our company by not selling to internet sales people? I agree that we should be told which manufactures are doing this. If someone was stealing money from your purse or wallet, you would have the right to confront them. Are these manufacturers not stealing money right from our purses and wallets? Like someone said earlier, he wants the publicity………so give it to him!!
January 16th, 2008 at 3:05 pm
I said this before and I will say it again…Warranty work ought to be customer pay at the dealer rate…get a voucher which is a stamped paid work order which THEY SEND TO THE MANUFACTURER to get their warranty rebate check.
Internet sales….read not my customer…could be charged a premium rate for service!!!
Two rates? Sure, just sell your customers a preferred customer card for a buck!
January 16th, 2008 at 1:00 pm
Dana,
You have certainly entered the center of the fire with this topic. For someone with limited experience in the RV industry, I personally feel that you must now establish your credibility as a journalist. We would like to believe that as a responsible journalist, you verify all facts through more than one source, however, in todays business climate, many journalist are simply trying to sell print. I am not attacking your professional ethics or practices. I do, however, find the numbers mentioned in the article, hard to believe. I cover both of the Carolinas for a major parts and accessories distributor and I know most of the dealers. If this unnamed dealer was as strong as he said he was, I feel sure I would have heard something about him. As a big fan of Greg Gerber, I am honestly giving you every opportunity to win my respect as a daily reader. Since the dealer contacted you and asked that you do a story on his business, you do not have questions of confidentially to deal with. Reveiling the name of the dealer and his location is very important. If he actually does exist, the readers can determine the brands he is selling in this most irresponsible manner. With unit quality the number one complaint of the consuming public, we cannot afford to take the issues put forth in your article lightly! By the way, I too would like to see a “Spell Check” function available.
January 16th, 2008 at 11:33 am
Can you forward this article with comments to the RV manufacturers?
If so, I recommend that the CEO and managers get a copy. They need to know what is going on and know what they can do to protect their dealers.
Thanks for the warning!
January 16th, 2008 at 10:48 am
In our state you need a Dealers License to sell trailers. In which the state comes out and inspects your facility making sure you are who you say you are, that you have inventory and you can service what you sell. It looks to me like this guy would not qualify. Why not expose this guy for what he is and print the story?
January 16th, 2008 at 10:23 am
All the feedback here is interesting. Sure everyone is curious as to which dealer and what manufacturer - but truth is, there are several variations of this type of dealer. But I think you dealers are missing a great opportunity to state to the RV Manufacturers how this affects your business. Please indicate how this affects your bottom line, how you’ve done away with freebies for customers; not hired certified technicians because of it, not bought DMS systems, how you’ve resisted upgrading dealership facilities because of it, etc..
January 16th, 2008 at 9:33 am
This guy is obviously not certified to even work on an rv much less sell them. I don’t see manufacturers allowing this to happen. How can he even pdi something he can’t work on. Not to mention the burden he would be putting on other dealers to take care of his sloppiness.
The downside his customers will soon realize is that other dealers will be hesitant on working on something that has never been ck’d in the first place.
January 16th, 2008 at 9:30 am
Dana, Larry G. and E.T.Andrysiak are right. The manufacturers need to be exposed for legitimate dealers to make their choices as to whether they should deal with them or not. Maybe it is already a manufacturer who we have already cut from our manufacturer list due to the same thing going on In Michigan. Complain all you want, without being specific, this article is redundant reading, and a waste of time.
January 16th, 2008 at 9:29 am
I agree completely with what Wegge has said. The manufacturer is to blame and the real loser in a situation like this is the retail customer not other dealers. If everyone schedules orphan owners out 6 months for a service appointment to punish them, we will eventually run out of customers. The type of customer who buys on price alone from a non-stocking internet dealer is a usually a new customer to the RV industry that needs even more care than other customers - not less.
When these type of buyers get no service or support, their time spent in our industry is often a short one. They buy an entry level product that delivers a bad experience and they leave the market to buy a condo, boat, or something else with their disposable income.
So, don’t punish the retail consumer for a manufacturers shortcomings is my point.
January 16th, 2008 at 1:16 am
Well Dana, I’m sure your main goal was to stir up a lively firestorm to get that hit counter moving.You succeeded. However, you did it without one verifiable fact. Many dealers that read this would already have the heat all over this guy if it were half of what’s alledged.
What you have here is probably an ex-salesman from one of the Florida mega dealers that knows it all and has a geek buddy with a computer. He’s probably stealing eveything he can get from his ex-emplyer as well. His story to you is his business plan, not his business. (Not that it couldn’t be with your help) He’s looking for free exposure. Just where is it that he wanted you to expose him anyway?
The only reason I mention this scenario is that I too have 40 years behind me in this game and DO have the facts.
Why don’t you verify his statements and print a REAL story?
January 15th, 2008 at 10:43 pm
You’d better believe! Internet dealers are a very real threat to full service dealerships. They are making millions for themselves, part vendors and manufacturers. If you want names of manufacturers and part vendors you need to research it like we have. We’ve discontinued buying from vendors who sell “them” parts below our cost. We’ve got an Internet dealer 50 miles from us.
They buy large quantities of specific parts from vendors at reduced prices (below our cost). Then sell them for a few cents to a dollar or two over cost. The vendor then ships to the customer and the internet dealer never even handles the part.
This dealer has a hundred or so campers on a gravel lot. Nothing is plugged in, no steps or jacks are down and no slide rooms are out. Loose parts are sitting inside for customer to install. Manufacturers also ship directly to the customer. There is no pre delivery inspection and the customer gets no “walk thru”.
They have a service “installation” department to install awings and A/C’s on their own trailers. They offer financing and push every customer to buy credit life, A&H and an extended warranty.
They do not take trades. For an additional cost they will put your old unit on their website “for sale”. You keep it at your house. They send customers to your house for you to sell.
As a full service dealership with overhead costs there is no way for us to compete with price. We have to compete with customer service. We sell our customers to buy from a full service dealership. We have the parts and service they’ll need in the future. If they have a problem we’ll take care of it.
When they visit us the steps and jacks are down. All slide rooms are out and some units are plugged in. We’ll be happy to plug in anything a customer is interested in. We fill the gas tanks and turn on the heat (winter) or A/C (summer)when a customer tells us they are coming. If they can’t make it we’ll meet & greet them after hours. We take trade’s and have late model units available.
Does the automotive industry allow Internet sales? How do they handle the Internet? The RVDA and RVIA need to back full service dealers. Most of us don’t need to be certified. Training is great but the dealers are NOT the problem. Dealers cannot stop what is happening.
The vendors and manufacturers are the problem. To make a buck they’ll sell to anyone including Internet dealers. Just look back to what happened after Katrina. Would a full service dealership order a unit with little windows and no roof vents?
RVDA and RVIA should use their resources to protect the future of the RV industry and full service dealerships. ALL RV manufacturers and vendors should have to follow some kind of rules on product quality, distribution and minimum pricing. The manufacturers and vendors are making big money and don’t want to change. Without something in place Internet dealers will continue to thrive.
January 15th, 2008 at 9:45 pm
OH,my god you guys are missing the point,,what the hell happens to the family that buys this unit ,and not have it serviced by the dealer and it blows up in a campground or in their yard and takes out a whole bunch of people,, who is the bad guy now,,,I have been an RV tech for over 44 years and never heard of such a stupid thing in my life,,, thanks for listening,and reading
January 15th, 2008 at 7:58 pm
As usual Mr Wegge is right on target! I support everything he said. I would also add we need to identify the manufacturers that support this kind of dealer because this can best be corrected with a vote from our pocket books!
January 15th, 2008 at 7:46 pm
It is amazing to me that the manufacturer(s) would allow this practice to go on. His name and the manufacturer name(s) should be proclaimed loudly. Heck, he did call you and beg for a story of his own. Let the man get what he asked for! I suspect he will get much more than he really bargained for.
A guy like this won’t last long, but sadly the damage he can do to the industry and a few local friendly competitors can have a lasting affect … in a very negative way. I say write the article and let the chips fall where they may and his local competitors will be better armed to deal with matter.
Oh yeah, I vote for a spell checker too …
January 15th, 2008 at 7:06 pm
Mind you this party problably has farm/ranch tax deferral, has no city/county licenses and taxes to pay,and is way out of the radar on permit requirements let alone pay the annual permit maintenances. As well he does not have the daily and weekly donation requests we all address and participate in being on main street USA. Knowing the agricultural insurance arena this additional non farm business did not impact his liability insurance costs. We are cannot play in this game let alone find the field to do so.
January 15th, 2008 at 7:01 pm
I certainly agree that this is a serious problem for the full service dealers and their current business model.
It seems as though the core of the problem is manufacturers not upholding their franchise requirements.
Additionally, one of the problems is that the consumer does not “see” the value the full service warranty, etc. If this is the case, then dealers need to figure out how to improve their efficiencies in order to be competitive in the new Internet savvy world.
Lastly, the full service dealer needs to have their parts and service departments able to stand on their own. In my mind that means negotiating repair hourly rates with manufactures that are commensurate with prevailing cost.
January 15th, 2008 at 6:51 pm
We have a dealer like this in CA. I dont think much can be done to the dealer but RVIA Could say something to the manufacturers. Somthing needs to be done.
Thanks
Jesse G
January 15th, 2008 at 6:48 pm
I wish you had done a story on this dealer so we would know what type of manufacturers condone this type of operation.
I acknowledge that times are difficult but we, as an industry, are merely mortgaging our future if we allow retailers such as this.
If he truly does sell 1,200 units a year, it’s odd that this hasn’t surfaced, especially from other Florida dealers who have had to compete with him in their backyard.
January 15th, 2008 at 6:03 pm
This article speaks volumes about our industry. If you truly believe that your manufacturer cares about the dealer network, you are sadly mistaken! RV manufacturer’s only care about dealers if they are willing to work on units sold by leaches like this person. I am glad I invested millions to be in this industry so guy’s like this can have the same priveledge as I do. This is 100% the fault of the RV Companies!
The real losers are the buying public.
January 15th, 2008 at 5:56 pm
I have two observations, no three: 1. I agree with all previous comments. 2. I do wish your comment box had a spell and grammar checker available. 3. I, for one, would like to know who the manufacturers are in this case, so, if we are selling their products, we could bring this matter to bear in a big way.
January 15th, 2008 at 5:47 pm
I serously doubt this guys claim of 1200 units per year.as a texas dealer this time of year all my customers have their units in storage waiting for fair weather so we are faced with a whole lot of what is described as orphan owners needing repair service which I am more than happy to perform.even to the point of offering a campsite service to obtain even more of this highly profitable parts and service business.with manufactors willing to pay upward of 100.00 per hour and skilled labor running arround 40-50 per it just makes sense.it is like selling for over sticker. and some manufactors allow a 35% parts mark up that is percentage wise better than what most dealers make on the sale of a new unit.besides that it is a whole lot easier to trade some one out of a unit if they arnt burried.Be carerful what you ask for texas law only allowes me to repair the units I am franchised to sell.This means that when a manufacror givs a large territory or does not have dealers all over the state.Orange texas is further away from elpaso than dallas is from chicago.so theese franchise laws have made orphan owners out of several texas customers
January 15th, 2008 at 5:41 pm
We have a similar situation in our town. A small used car dealer started selling rv’s a few years ago now he advertises exclusivly on the internet and is starting to sell a lot of units. He has no shop, no service, no parts, no mechanics and we wonder why we can’t compete with his prices? Now we’re starting to see alot of his customers wanting warranty work done on brands that we sell the sister product of the same manufacturer. We tell them there is a dealer in town he should do the warrenty work. He can’t. He doesn’t have a shop. He has told them we can do the work because we are a dealer for that company. We have contacted the two manufacterers of these products and they say they were unaware he did not have a service dept. when they signed him as a dealer. As long as the numbers are there I’m sure the company’s won’t do anything about it. Not good for the rv industries reputation!!
January 15th, 2008 at 4:57 pm
Ultimately the bottom line is that manufacturers must enforce minimum retail pricing on their current model year units. I would suspect at this point most dealers are aware of the supreme court ruling last spring that now allows this practice. During several of the partners in progress meetings at the RVDA convention in Las Vegas this issue was discussed. Mostly in part because the dealers as a whole would like to see it happen. (Some of the manufacturers certainly tried to skirt this issue) If and when it does occur the manufacturers will have to enforce it, otherwise legitimate full service dealers will have no recourse against this type of “poor excuse” for a dealer. The dealers along with the strength of the RVDA need to continue to pursue this issue in order to protect the consumer and the quality dealers who are endeavoring to provide a wonderful experience to our customers and raise the CSI of our industry.
January 15th, 2008 at 4:56 pm
These kinds of articles always bring out the “poor woe is me” replies. Unfortunately the dealer being spanked is just more honest than most. I make my comments based on 40 years in the business as a manufacturers rep., a dealer and having been engaged in training and consulting in the industry for a long time. The service that dealers like to talk about borders on being a joke, especially in the RV industry. It is the rare owner that really get much satisfaction. More to the norm is tremendous frustration with trying to get their rig in for service and then getting it out in a timely fashion. Now this is not always totally the dealerships fault but rather in many cases a combination of factors but in the end it is the poor owner who suffers the most. There are many problems to focus on in the industry but this dealer who is being castigated in way down at the bottom of the list.
January 15th, 2008 at 4:43 pm
My oh my. When are manufacturers going to start to consider the long term consequences for their short term mistakes? Sure in the short term they sell a bunch of RV’s cheap but eventually those RV’s will need something and the experience that owner is going to have is not going to be good. What then? He is discouraged and tells everybody he knows not to buy an RV. Word of mouth is the strongest influence out there and can work in both ways. We have a similar thing going on with rallies. We are training our customers to buy cheap and have a bad ownership experience. How long will that last before we see the market begin to shrink. Obviously everybody must be thinking the baby boomers are out there in such numbers that we can afford to continue to let this go on. I have to tell you I for one am getting very concerned about the future of this industry. Are you manufacturers listening? Have you not sat in a room and thought this through? Full service dealers with the kind of facilities and support that every manufacturer wants representing their product professionally can’t operate at internet margins. The man is correct. The sad thing is that he and others like him think this is a good business model. Any business model that sells products cheap to unsuspecting consumers (and they are unsuspecting even though they are told they have to find a dealer in their local markets, they still don’t know those dealers are not making a dime servicing them and therefore probably won’t) knowing full well they will need service and won’t easily find it is terribly irresponsible and borders in my opinion on negligent. We truly need a committee formed with the best and brightest on both sides to dissect this practice and get a handle on it before it is too late. Hopefully the rest of you dealers will begin to understand what is at stake here and start addressing it with your manufacturers. Or not. But if you don’t and the negative word of mouth gets out there, and it is….who are we going to blame? Check the blogs ladies and gentlemen. The internet doesn’t just get cheap prices out to everyone in the country it also informs them about how unhappy they are. So far we’ve just been a blip on the radar………not for long.
January 15th, 2008 at 4:29 pm
You really can’t blame this dealer for being opportunistic. Shame on the manufacturers for not controlling their sales channels and allowing this to happen. There is nothing wrong with internet sales, but it needs to be coordinated by the manufacturers to benefit the brick and mortar dealers, not hurt them.
A better business model would be a “buy online” function from the manufacturer’s website that enables the customer to buy online at a discount. This recognizes that the dealer’s sales expense has been eliminated, but leaves enough margin so that the unit can de delivered and serviced through the local dealer. People want to save a few pennines buying online, at’s fine, but the manufacturer should take the reins and steer them into the local dealer for delivery and service.
January 15th, 2008 at 4:18 pm
Dana,
Many groups in our industry are spending a lot of time to try and improve the RV lifestyle for our customers.
When 20+% of the RV owners for the past 4 to 5 years are not happy with our industry we have a manufacturer who allows a dealer to be handling their products who make no attempt to take care of the customer. In our state this guy couldn’t even get a dealer license without having a service department and infrastructure to handle the repairs.
While I question the integrity of this internet dealer I really have to place the blame on the manufacturer that allow their product to be sold in such a manner.
When good dealers work on coaches sold by other dealers under warranty and may have to fight to get paid they will simply revert back to only performing warranty repairs on RV’s they sold. This is so backwards of where our industry needs to go.
January 15th, 2008 at 4:15 pm
You would think manufacturers would want brick and mortar dealerships to represent their products and be there to give the customer a favorable RVing experience. You don’t see automobile maunfacturers allowing new cars to be sold from a farm without a customer care center and a dealership that meets minimum standards. I have been around the RV business since the early 70’s and there always has been prostutes that will back door to these kinds of guys.
January 15th, 2008 at 4:13 pm
I can’t believe that there has not already been a firestorm of comments on this .It is without question, the single biggest problem as regards RV sales -lack of a fair profit.And yes , it does speak to the lack of enforcement of franchise agreements but it goes deeper.
Franchise agreements are ALWAYS written by the manufacturer, so is it any suprise that there is almost never any paragraph in the written agreement that addresses penalties to be incurred by the manufacturer for failing to enforce the agreement? You can bet that if we dealers wrote these agreements, there would be. As it stands now, our only amunition is to threaten to cancel but you can only do that just so many times before you have created an acrimonious working relationship between yourself and your supplier.
How about if we get RVDA to come up with a universal franchise agreement , with “fill in the blanks” provisions? This document would be used by the dealer body by attrition as existing agreements expired. Among other things,our agreement could spell out specific penalties that manufacturers would face if they fail to protect their dealers and customers.If all dealers agreed to use this contract and nothing else….well you get the picture.
More and more states are enacting laws like Texas, Georgia, Ohio and most recently Florida , that make it mandatory that certain protections are included in these agreements. It would behoove the manufacturers to pay attention to this sea change and it would be of equal value to the dealer body to start acting in our own interest before we loose our shirts to these fly-by-night, no investment, no worry , bad apples. One guy on a farm somewhere can actually put a dozen dealers out of business. All it takes, is for a builder who is on the verge of not making payroll, to roll over.
January 15th, 2008 at 4:00 pm
Every industry that I have been associated with has this guy wreaking havoc on the credibility of the entire business. There is a very unflattering term that perfectly describes this person…I won’t go there. What I can’t figure out is why a customer would entrust such a large purchase to a dealer where they had to step over cow chips to write the check.
January 15th, 2008 at 3:58 pm
It would seem that manufacturers would avoid this kind of operation or maybe “real” dealers ought to avoid those manufacturers. You should publish who this character is and what products he sells so every other dealer competing with him, with the same product, can squeeze someone! Also, the state in which he does business is culpable. He is zoned farm. If he is retail selling…there should be some State regulations as to “place of business” before issuing a business licesnese to this guy. I think it would serve your readers well to publish the details of this operation. We can’t attack what we don’t see! The easiest way to clean this operation up might be via the State and licesnesing requirements. You can’t sell off of a grass lot in Illinois!
January 15th, 2008 at 3:56 pm
Go ahead, name the manufacturers. Lets the dealer body deal with them. With this type of sales practice, how long before the manufacturers have a network of these types around the country to move their inventories. No investment, no facility, no tracing problems back to him, no worries, 1200 x $500.00 = $600,000. not a bad living for no fault sales, probably doesn’t pay taxes either!!Probably,just one of many, doing a variation of this practice. This is another reason, to evaluate. wether you want to be in the RV business or not.
January 15th, 2008 at 3:50 pm
I think all dealers need to quailify their service calls. if a person bought from Joes RV a real store somewhere then if we have time we get them in for service.If they respond like they all do by saying they bought it from internet and you have to service my unit we schedule them in at least 6 months out. Most of todays cars and trucks need very little if any service. So ask any consumer and they will tell you when they purchased their car it was about price only. That same model is heading our way. But as we all know most RVs need alot of warranty service. If the RV manufactures have a problem with our attitude then I guess we will just have to drop them and get another line. Maybe we should suggest to the manufactures that if we are forced to work on internet sold units that they should pay us double our warranty rate. Won’t happen
January 15th, 2008 at 3:49 pm
I am assuming you at least verified his story. Does he even stock one piece or is every unit ordered out. Motorized or Towable or both? Is it even legal in his state to not have a service dept or contract with a local service provider?
January 15th, 2008 at 3:46 pm
These are the same “clients” who show up with no appointment and demand priority service. They also believe they are entitled to have Non-warranty repairs done at no charge to them and frequently want a free orientation on how to use their RV. (We charge $695 & up) Legitimate dealers have a cost of doing business. We gladly offer Piority care to our customers. We can’t and won’t to this type of buyer. We are very clear and upfront with our potetial clients regarding this policy when we know they are shopping online out of state.
January 15th, 2008 at 3:35 pm
The only way for us honest Dealers to make a stand is NOT to service units bought off the internet! Let the manufacturers that sell to these “wholesalers” do the Warranty work.
January 15th, 2008 at 3:34 pm
Dana As you know that this type of unacceptable practice is what is making this business very discouraging. If this was the only low life doing this type of practice that would make it one to many. As you and the rest of us know there are many of these types of persons whom we will not call business people doing this type of disdained business practice. It is also the fault of the manufactures that look the other way and allow them to market in this manner. What needs to be done is for the RVDA and the RVIA working together and not allow this type of sales practice to go on.
Clamp down on the RVIA to put major fines on there members if they allow this type of a person to do business with them. The manufacture know very well that this is going on but don’t care to do anything about the problem. No you would not tell who the manufacture is but if you would let us know, then as a dealer body we could let that company know of our thoughts.
January 15th, 2008 at 3:23 pm
Another 1200 orphan owners without a servicing dealer to “roll out the red carpet” for them! Manufacturers may in the future need more telephone operators than factory workers to handle the service issues. Is there a point when greed and service meet in the middle?
January 15th, 2008 at 3:19 pm
Wow, what a deal, All of the $$$ without any of the risk. I wonder if this guy even has an “Inventory” or does he mail-order the units? It just goes to show that some of thes manufacturers are just concerned about rolling units and to hell with customer or service support. This type of behaviour will come to a head, either at a delaership or a consumer level. It is amazing how quickly a customer forgets how much money he saved when he can’t get a warranty issue resolved.
January 15th, 2008 at 3:15 pm
It’s all about the Dollar. Bigger manufacture is all about looking good today no matter what it will do down the road. They are not thinking that far down the line. This is what a few of the old big manufactures did years ago and look where they are today. They are hanging on by very thin rope. I remember gas stations being set up as a dealer years ago. History repeats itself. We need to learn from the past.
January 15th, 2008 at 11:29 am
This is one of the biggest challenges facing all manufacturers, in every category of the business. I believe it comes down to adding value to the customer relationship. If a dealer isn’t adding any value why would the manufacturer need the dealer? With dealers like the one mentioned here it won’t be long before the manufacturers realize that they can set up a web site and sell on price just as easily. A real dealer adds value with all the things this dealer thinks of as “overhead”.
This is also one of the problems behind the service complaints in the industry. The full service dealer carries animosity, rightly so, toward the customer who bought only on price and then whines about the coach needing something fixed. It ends up as a black eye on the entire industry when it comes to service and warranty.