– Ben Martens

Why Do We Have Dealerships

forddealerAs I bought my truck, I was left wondering why we still have dealerships. When I got ready to talk to the dealers, I already knew excatly how much my truck would cost them. I had the order form that showed invoice pricing and I knew how much profit they still made on that invoice price. Everything is available online these days. I was even able to track my own truck through the order process. I could see when it started to get built and when it was being shipped. With a couple more phone calls, I could have even figured out exactly which rail car it was on and tracked it’s movements across the country. There are no secrets anymore.

The old model of negotiating with a sales guy is silly. You don’t need to do any of that. Just tell them how much you want to pay and see if they’ll do it. So if I’m buying a car like that, why couldn’t I just log onto and order my vehicle there? Why is it any different than buying something from Amazon?

There’s still a place in my dream world for a few dealerships. They provide factory trained mechanics and maybe they could take deliver of the vehicle and prep it for your for a small fee. And maybe they let you pay a fee to test drive vehicles. But there’s no value to me in having them actually dictate the price and sell me the vehicle.

Tesla is trying a direct sales model, and, while I think it’s fantastic, the entrenched dealerships do not. They have wisely protected themselves with laws and Tesla is fighting an uphill battle to even be allowed to sell directly to customers. It’s painful and hard whenever a business model changes, but these dealership are becoming relics of history.