Are you a Dealer Entrepreneur or just part of the rank and file that make up most of the dealers in business today? Here’s a quiz to find out where you stand. It’s a short one so go ahead.
- Do you seek out the best vendors for products and services
- Do you encourage vendor collaboration?
- Do you use a different marketing agency than your competitors?
- Do you use a different SEO/PPC vendor as your competitors?
If you answered YES to all of the above, congratulations! You’re a Dealer Entrepreneur!
Why does it matter?
Many dealers have turned to “big box” vendors to entrust their sales. They rely on one-stop shops, most of which have never sold a car, let alone online, to do all the work for them. This path of least resistance (and less work) gives them the ability to check off the “gotta have” boxes. These large vendors generate mediocre (compared to what can be achieved) sales results but everyone is happy as long as they can sell enough cars to keep their job. All is good, or is it?
“In this fast changing, and expanding, automotive marketplace, do you consider your market as your world…or the world as your market?”
Dealers need to be asking vendors “How are you going to help me dominate, not just compete, in my DMA?” On the other hand, there are many dealers who are entrepreneurs but have had their entrepreneurial spirit stifled because of OEM restrictions. For example, many OEM’s dictate what vendors a dealer may use. No matter how long a proven vendor has been doing business with dealers, they must go through an approval process, taking sometimes months/years, often administered by a vendor gatekeeper. OEM’s have the power to predetermine vendor winners and losers, at the expense of innovation and vehicle sales.
There appears to be no rhyme or reason for a vendor to be approved. If they are approved, they are required to pay a fee to the OEM vendor gatekeeper. I’m not an attorney but this seems to touch on anti-competitiveness, or at a minimum is anti-sales.
As I talk to our dealer customers and dealers at industry conferences, they say the deck is stacked against today’s entrepreneurial dealers. OEM restrictions keep dealers from using emerging technologies, losing out on a first-to-market sales advantage.
Christine Plunket, a previous Dealer E-Commerce Director and an auto industry strategist, tells dealers to “exert some control of your dealership’s destiny by being brave enough to balk at OEM mandates. You’ll pay a little for a lot more sales and have the dealer down the street scratching his head.”
OEM’s and Big Box Vendors are working together to limit individual dealer sales by restricting them from using non-approved vendors. Why would they want to do this?
This type of policy hurts smaller dealers and groups, forcing them out of business or into mergers. A recent Cox Automotive corporate-strategy study forecasts a significant drop both in the number of dealerships and the number of owners in coming years. They predict that by 2030, there will be only a 1,000 dealership owners, a drop from the current 9,000 dealership owners today. This puts more control in the hands of fewer dealers, making it easier to change franchise laws and pave the way for OEM’s to sell vehicles directly to consumers. Hasn’t this been their goal for years?
OEM’s have every right to set Minimum Advertised Pricing (MAP) rules and guidelines on how a franchise dealer can present the brand name. However, dictating the marketing and technology tools that dealers use makes no sense.
For example?
Here are two dealer websites with the names of the dealers removed. You can’t tell them apart!
Dealers who buck the trend and use their entrepreneurial skills are seeing results.
YOY sales for the top Chevrolet dealers using a unique sales tool like tru Shop-by-Payment in the Cincinnati DMA saw their sales increase vs those dealers who did not, and saw their YOY sales decline.
McCluskey Chevrolet, Jake Sweeney Auto Group and the Jeff Schmitt Group are entrepreneurial dealers using tools like tru Shop-by-Payment to generate more sales vs their competition, even in a down market.
The quintessential entrepreneur and top ranked Chevy dealer in the nation, Keith McCluskey sums it up best. “In this fast changing, and expanding, automotive marketplace, do you consider your market as your world…or the world as your market?”
How about some dealer/vendor collaboration? Want to strategize on how to be more of an entrepreneurial dealer and do better than your competition? Let’s talk!
Contact me at Tarry@truPayments.com or my Anytime number 513.200.5757