Don't dealerships (and the salesperson) only make hundreds on a $30k car? It's almost a loss leader for the service department.
Heck, I've sold used cars at asking price and still made $250 just because the dealership overpaid on the trade in.
All in all it all adds up and evens out, but mentally it can be frustrating coming into work on 4th of July and spending hours with someone trying to have fun looking at 4 cars and then leaving. And then finally selling one at 7pm and staying late, to make $250.
And with the way the pay plans are structured, it's hourly pay OR commission whichever is higher..so if you sold a few cars Wednesday Thursday for $2k, you can end up coming to work Friday Saturday Sunday, not selling anything, and technically didnt get paid anything more for those hours.
If that were true, it wouldn't be necessary to outlaw direct-to-consumer sales.
https://www.justice.gov/atr/economic-effects-state-bans-dire...
I mean that you can buy from a dealership for asking price online.
I have done countless deals over the Internet and had a driver or a truck deliver the car to a customer. Some for asking price, some discounted.
Ok, but buying from their local dealership’s website is not what most people mean when they say they want to buy cars online. Likewise, when they say they buy their pens online, they don’t mean they buy them from the website of their local mom & pop stationary store.
Would you really prefer to buy online and it gets shipped to your house via a trucker, vs buying it on the dealer website and their local driver or the salesperson delivers it?
The reason people want to be able to buy directly from the manufacturer is that they want to see real posted prices so that they can comparison shop from home without needing to drive around to twenty separate dealerships (or have painful email conversations with twenty separate salesmen) to discover the real price for each car. In other words, they want an efficient public market where the posted prices reflect the actual going rate, so that they can be confident they are getting the fair market price, rather than needing to negotiate to avoid price discrimination.
Most customers come and try to negotiate down randomly. For a while the sites showing average price paid were interesting, and as a consumer I totally get it. But you can also get a feel for what deals a dealership is offering by just browsing their special page usually. And then buying like you would from the manufacturer.
Dealerships still play games partially because of the manufacturers sending limited numbers of certain cars and more of others. Currently Tesla is sitting on a large backlog of cars in storage. For other brands, dealers take up this slack. Dodge currently has a 2 YEAR supply of one of their crossovers sitting on dealership lots. It's going to be a huge problem for dealers.
It’s because they don’t know the value and/or they are bad at negotiating. That’s why they want to avoid it. Likewise, when I invest my retirement money, I just want to buy a broad index fund where I know I am getting the market-clearing price. I don’t want to have to know a guy who can get me a great deal on Microsoft stock, could I come down to the lot and talk about it?
> I suppose what you're saying is that you wish BMW just listed a lower price on their SUV that year so that everyone could compare easily
Yes.
> But if we go to the manufacturer model, it'll either still be static yearly pricing like MSRP is today.. or they'll do dynamic pricing like Tesla where people that bought the month prior sometimes pay a few thousand more than people that bought today.
Prices fluctuate. Airplane tickets double in price overnight, and some of that is price discrimination. But the rules are clear: last-minute tickets are a more valuable commodity. At any time, I can check one website and see reliable prices all flights between two places. I don’t have to go to each airline website anymore, much less talk to a human.
> But you can also get a feel for what deals a dealership is offering by just browsing their special page usually.
This is a wasteful, inefficient way to run a market.
I used to sell cars and was top 0.1% in the country at it.
Yet others would say I was a parasite costing them money for nothing. But they were ignoring I was providing value for the dealership and its collection of employees even beyond the owners. I worked for a public corporation. Tons of stake holders profited via stock value while I was there.
On a tangent, people always say they'd rather just buy cars online. Great you can do that for one. Second, if all manufacturers did that, month 1 results would be whatever they were. On day 1 of month 2, some MBA would say "hey, if we had a human these people could call, chat with, or even visit with for a test drive, wouldn't sales go up? Let's try it!" And within a month you'd have salespeople interacting with customers again.