So, I've been thinking a lot about this since reading about the existing dealerships lawsuits trying to prevent Scout from doing direct marketing. I'm sure Scout leadership has thought about this but I believe the only way they're going to be able to avoid the lawsuits is to establish "showrooms" in each state they what to do business in sort of like the Tesla model.
Tesla originally encountered huge pushback from national auto dealership associations in states that require all cars to be sold thru a dealership. Tesla got around this by establishing company owned "showrooms" where prospective buyers could go, see models and do test drives. These "showrooms" were counted a "dealerships" that would also assist buyers with buying directly from Tesla. No stock on hand beyond a minimal number of test vehicles and maybe some used from trade-ins.
Basically, this would be Scout "dealerships" that are centrally owned and operated businesses vs. the traditional franchise model. In a traditional dealership a local owner sets up shop at a location, buys stock from the manufacturer then marks it up and resells it to the public. In the direct marketing dealership, the central corporation controls all aspects of product from design and manufacturing through pricing and sales and into owner support. Traditional dealerships basically have a free hand to mark up their product to whatever price they think they can get away with, whereas a centrally owned dealership sells at the manufacturer's cost. Centrally controlled "dealerships" allow the manufacturer to more closely control their products after the sale as well so you don't have local dealers charging outrageous maintenance and repair fees.
The downside of this model is it requires a huge capital outlay by the manufacturer to set up these showrooms. Once it's running it's great - getting started is tough though.
SO, yes, Scout may need to have a form of dealership. But by cutting out the middle-man they keep cost low and and improve owner satisfaction instead of relying on local franchisees. What does Scout leadership think about this model?
Tesla originally encountered huge pushback from national auto dealership associations in states that require all cars to be sold thru a dealership. Tesla got around this by establishing company owned "showrooms" where prospective buyers could go, see models and do test drives. These "showrooms" were counted a "dealerships" that would also assist buyers with buying directly from Tesla. No stock on hand beyond a minimal number of test vehicles and maybe some used from trade-ins.
Basically, this would be Scout "dealerships" that are centrally owned and operated businesses vs. the traditional franchise model. In a traditional dealership a local owner sets up shop at a location, buys stock from the manufacturer then marks it up and resells it to the public. In the direct marketing dealership, the central corporation controls all aspects of product from design and manufacturing through pricing and sales and into owner support. Traditional dealerships basically have a free hand to mark up their product to whatever price they think they can get away with, whereas a centrally owned dealership sells at the manufacturer's cost. Centrally controlled "dealerships" allow the manufacturer to more closely control their products after the sale as well so you don't have local dealers charging outrageous maintenance and repair fees.
The downside of this model is it requires a huge capital outlay by the manufacturer to set up these showrooms. Once it's running it's great - getting started is tough though.
SO, yes, Scout may need to have a form of dealership. But by cutting out the middle-man they keep cost low and and improve owner satisfaction instead of relying on local franchisees. What does Scout leadership think about this model?
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