Dealer Territory Rules - Let's Change Them!

[RiggerJon]

I’ve found dealer territory rules to be annoying in the past, but not enough to dedicate time to it. However, after seeing prices skyrocket in recent years, service department inequality, and a recent attempt at an illegal price increase – I can no longer tolerate it. Please join me in a petition to the Federal Trade Commission to examine the antitrust law violations we’re experiencing in the sport boat market.

Do you want to help GOOD dealers do MORE business? Sign it & share it!
Do you want a CHOICE with whom you do business? Sign it & share it!
Do you help keep prices competitive? Sign it & share it!
Are you tired of dealers bifurcating service based on whether you purchased the boat from them? Sign it & share it!

[mgs917]

I went on two demos for the S23. I took my checkbook to the second demo. Unfortunately, it was 2 months after I moved states. The dealer discount wasn’t even half of what my previous dealer would offer. The new dealer wouldn’t move on price. I currently have a deposit on a Supra. If I could buy from an out of state dealer, I probably would have had one of the first S23’s produced.

[RiggerJon]

Quote removed by Admin for not following the Guidelines for Quoting Previous Posts in a Thread.

Even your Supra costs more than it would if competitive market practices were in place. The sport boat industry needs a reality check.

[mgs917]

Agree. However, the Supra dealer is 1.5 hrs closer, included first years maintenance. They just seemed like they were interested in my business. Didn’t feel that way with Nautique. Nautique dealer basically said here’s the price take it or leave it.

the same exact Nautique was 10,000-20,000 difference just because I went to a different dealer. That irks me.

[RiggerJon]

Quote removed by Admin for not following the Guidelines for Quoting Previous Posts in a Thread.

Yup, that's exactly the problem. They know you can't buy their brand from anywhere else so they can demand whatever margin they want, and they get away with it enough to make it work out okay. If we could remove the territory restriction, the open market would change in favor of the little guy. That's what I'm working to do.

[charlesml3]

So here's what I know about how the dealers handle this: They are told by the factory to 'play nice' with each other. In my particular case, I have a relationship with one dealer that goes back 25 years. I have since moved and live much closer to another. It doesn't matter to me. I still do business with my old dealer because I've been with them for over 2 decades. When I buy a boat from them, they do not pay a partial commission to the local dealer and they do not feel like they need to.

Now if someone "new" to both dealers comes along and buys from the non-local one, they will split the commission. It's fair and they all understand how this works. They're all "playing nice" with each other.

[mgs917]

Charlesml3 - sounds like it worked out well for you. That’s what I was hoping to do, but unfortunately it did not work out in my situation.

[charlesml3]

Yea, it's going to be on a per-customer basis. The only reason it works out for me is the fact that I started buying boats from WLM back in 1999 and have been ever since. The local dealer knows what's happening and isn't all that happy about it but he does understand.

-Charles

[scottb7]

I am generally a free market person, but i do see the wisdom in having territories, and supporting the economy close to home. And while there are a few people that have voiced - very valid - concerns on this website it is very likely they represent a small percentage of overall sales.

"If we could remove the territory restriction, the open market would change in favor of the little guy. That's what I'm working to do."

I had to chuckle about the comment above of helping the "little guy". I would say if the little guy can afford a $150k to $200k boat he doesn't need help. I mean how much is the little guy going to overpay going to his territory dealership? Probably not more than they can afford. Maybe the little guy's attorney can find a better cause for alarm...and he can buy himself a beer.

[RiggerJon]

This isn't about a single transaction between territories, guys - there's a bigger picture you're failing to see. Let's take a step back in time and look at scenario of where we would be today had there been competitive options over the last 20 years. Open markets enable lower prices to consumers - this is a fact. With no competition, prices go up. While you might think you're winning on an individual level, you're paying WAY more due to astronomical retail price increases that wouldn't have happened with open markets. This isn't about saving 1-2% between dealers, it's about retail prices being 100% higher than they should be - it's a lot more than a beer fund, friend!

This is the reason antitrust laws exist, and why it's time we do something to enable an open marketplace.

[tmb]

I clicked on the petition but it says it’s closed?

[RiggerJon]

I clicked on the petition but it says it’s closed?

I've been fighting like **** with technology on this. I first tried to use Change.org, but either their platform wasn't working properly, or I was too stupid to use it - so I pivoted to Google Forms and closed the Change.org petition. When I edited the inline link above, it seems to have only changed what was displayed (the google forms link) and not the underlying URL to change.org. Ugh. I just removed the bad link - should work for ya now. Sorry for the confusion/inconvenience, and thanks for mentioning it!

[bturner]

Hard to argue some of the points in the OP's post on the surface but.....

There has always been this contention about this type of dealer model and reasons abound on both sides of the isle for and against it. There is the price thing which is a somewhat valid concern but there is also the service aspect as well. The last thing Nautique is going to want to do is to encourage low cost, "wholesale" dealers whose model is low GP with high volume. This does nothing for the brand and will only lower the perceived premium value of the brand. The next thing you run into with a "race to the bottom" strategy is that there will always be dealers that will sell cheap and will not invest in the service or the after sale support aspect of the business. The poor service you receive afterwards will push you to another dealer that has invested in service/support and is now on the hook for supporting the low cost dealer you bought from without getting the GP from the initial sale. This happens all the time with car dealerships.

I did get a chuckle about the wording in the petition pitch that looks like it was borrowed from a west coast political campaign..... equality, "little guy" and tolerate. Worse yet, where is the first choice to host the petition? Yep, you guested it, change.org. That's really special.

As to questions in the petition pitch.....

• Do you want to help GOOD dealers do MORE business? Absolutely. Then I suggest you support those dealers. No one is making you buy anything here. If you can't get the deal you feel entitled to from Dealer A and brand X? You then have the freedom of the open market to buy another brand from another dealer. There are plenty of other good brands out there and you can let your dollars show your disapproval with the manufacture's business practices.
• Do you want a CHOICE with whom you do business? Absolutely and you have it. Vote with your dollars and make your purchase decision based on the total package being presented. Don't like the package being presented by one manufacture/dealer? Go to another.
• Do you help keep prices competitive? Absolutely, everyone does but I'm not so sure your actions will produce the desired results. There is still competition between manufactures. Don't like what Nautique is doing? Go to another brand. If enough people do it Nautique will get the message and adjust their business model.
• Are you tired of dealers bifurcating service based on whether you purchased the boat from them? This is part of the total package I was talking about above. Dealer A has just invested X crazy dollars in their service department to give their customers a premium, after the sale service experience. While they won't be able to sell their boats as cheap they feel the customers they want to attract will see the after sales experience difference and will be willing to pay more for that experience. As such they make it part of their business model. Dealer B doesn't invest anything so they can sell boats cheaper. Their service isn't horrible but don't have the latest equipment to service the boat making the experience.... well, not so good. This dealer is OK with this as they'll put up with unhappy customers as this low GP model is the business model they've chosen to go to market with. So now you've bought your boat from dealer B on price but want Dealer A to provide that premium service to you for your boat. Who in their right mind would want to take care of another dealer's customers on par or before theirs? Sure, you can do the whole "I'm a Nautique customer so it shouldn't matter" or "they still get paid from Nautique for warranty work so it shouldn't matter" thing but at the end of the day they didn't get that GP from the original sale, part of which helps pay for the investment they put into their business. So based on your free market decision to go with the cheaper dealer..... you get to wait. You chose the short dollar over the after sales experience. This was your decision and is part of the free market.

Lastly.... when have you ever seen the government get involved and prices actually go down? Yeah, I'm sure getting the FTC involved to sue Nautique will product lower prices and better service, right. At the end of the day this is totally a first world problem the well heeled are having to deal with that's hard to read with a straight face. Oh the humanity....

[RiggerJon]

bturner With all due respect, you're failing to look at the big picture, as I've described above. The big 3 overwhelmingly dominate with about 80% of the market share. They all employ the same sales strategy, and their market dominance has inflated prices. Think of it this way - what if you had to buy your Chevy from ONE dealership, and one dealership only. How well do you think that would play out? If they didn't have to compete against other dealers, you'd pay more. You know I'm right.

"So now you've bought your boat from dealer B on price but want Dealer A to provide that premium service to you for your boat. Who in their right mind would want to take care of another dealer's customers on par or before theirs?" Are you forgetting that dealerships make good money on service? The best dealerships don't care where you bought your boat from, because the service is profitable. Buxton is a one example.

"The last thing Nautique is going to want to do is to encourage low cost, "wholesale" dealers whose model is low GP with high volume. This does nothing for the brand and will only lower the perceived premium value of the brand." EXACTLY. This IS the issue!

You can cast stones at terminology/platforms used, but we are the little fish getting screwed in the big pond. I don't bruise easily, so have at it.

[RiggerJon]

Well, it seems my post on TheMalibuCrew was censored(removed), another sign of a failed open marketplace. Please share the signup with your Malibu/Axis owning friends to help get the word out. The more support we can show, the more likely the FTC will take action.