171–180 of 325 posts
This is the reason I like TrueCar. It's not a total solution, but it definitely starts down the road of leveling the playing field.
Earlier quoted context omitted.
You're probably right. For example: Even though you can buy a Thinkpad directly from Lenovo, Best Buy still exists.
> Even though you can buy a Thinkpad directly from Lenovo, Best Buy still exists For how long? It's a product an older generation that, for some reason or another, appreciates receiving the sales pitch. We're all tech savvy people here; go into Best Buy and start looking at computers. 4 out of 5 times you'll receive a sales pitch with, at least, a few elements of utter bullshit. Meanwhile, the younger generation are…
Maybe not, though a lot of people do and you probably should. The ergonomics of a car are more important, and much more complex, than for many other items. Some of this is addressed by adjustable seats, but not all of it. Zappos solved this by doing lots of returns, but that's not a great solution for large items with high shipping costs.
That said, I could easily see the value in having a single specimen at the showroom to check for fit, and then having everybody special order one with their own trim level, colors, etc.
Is it just me or did this problem fly completely under the radar during the govt bailout?
Earlier quoted context omitted.
From everything I've read about the industry for the last 15 years, this is all completely correct and serves to demonstrate why it's such a hard industry. Extremely high costs, low profit margins, fiendish competition, considerable regulation, and absolutely no guarantee that the new product you just invested billions in won't flop after you've done all the work.
True, but there are some low hanging fruit that have not been attempted yet... in the following areas: Finance: - why can't I rent a car for a month and if I like it sign up for a year or two or three? If I want to own it, why can't I just convert to a purchase? These options are not fluid and interchangeable which necessitates much more of a "sale" rather than a more flexible, value oriented approach. A manufacturer…
Because of the massive depreciation on a new car the minute you drive it off the lot.
> - trim levels are out of control and make inventory planning much worse. If the base model sells for $18K but is available in a $36K trim level, is it really the same car? Why not just keep it simple.
There are a lot of trim levels in cars for the same reason there are a lot of models and options in Lenovo's computer lineup: https://en.wikipedia.org/wiki/Price_discrimination. When you're selling low-margin products in highly competitive markets, you do everything you can to eke out a bit of margin with price discrimination.
> The dealer lobby prefers negotiated pricing over fixed price because it suckers poorly informed consumers (many of whom are elderly) into overpaying.
This is another form of price discrimination.
Earlier quoted context omitted.
We often moan about the taxi industry, the hotel industry, or the dealer associations but, in doing so, we miss something very important. The players in that industry often existed for years or decades in a state of government-backed protection without realizing it . Taxi drivers didn't necessarily lobby for market restrictions; they took advantage of the oligopoly, sure, but not necessarily consciously. If you live…
Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread. I mention this b/c I don't think it's a gradual accident... The dealers forced Ford to shut down factory stores in Oklahoma not too long ago. This is a turf battle.
Which makes me wonder how much it would change the US political landscape to eliminate the massive protections granted to car dealerships.
There are some interesting comments in here about how tough the struggle is for car dealerships, but I don't think that necessarily justifies their existence or mitigates the point of this article. If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales. But I think we can all intuit that if the ban were lifted, buying a car would be a very different (and b…
If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales. Can you really make that assumption? Customers act selfishly, and game theory applies here. For example, you try a shoe on in the store and then buy it online for less. The store provided something valuable to you, but you still bought the shoe online. Eventually the store will go out of business if m…
This seems like an opportunity for an Uber/AirBnB move. Find a jurisdiction anywhere in the USA where direct manufacturer sales are legal. Negotiate with the manufacturers to handle direct-to-consumer sales for them. Write your "app" so that customers can build their car online and have the order go straight to the factory. Charge the customer a "delivery fee" to get their heavily discounted car to them, from which y…
Heck, this is basically what I did the last time I bought a car. My local dealership in MA treated me like shit, so I called up one in NH, told him over the phone what I wanted. When I got there, he had the order ready to go. I signed some paperwork and gave them a deposit. 6 weeks later my car showed up. Make that an app and save me a drive to NH and I'll pay $1000 premium.
Earlier quoted context omitted.
> There aren't easy answers here I don't think the circumstances are as grim. Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. They may need to apply for a job at the new factory store, but that's really the extent of the displacement. You're not eliminating an entire industry. You're re-organizing it to reduce friction.
Agreed. And I didn't mean to sound grim. Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or u…
Would you support laws that would slow down the growth of digital cameras in the late nineties and early noughties so Kodak could continue to sell celluloid? I bet a lot of people were affected by that change. Where is the smooth transition for them?
Earlier quoted context omitted.
Agreed. And I didn't mean to sound grim. Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or u…
It is one thing to provide short-term support for carriage drivers and ship cargo loaders when mechanization renders their jobs useless. It is a different matter when existing big businesses stand in the way of progress. Would you support laws that would slow down the growth of digital cameras in the late nineties and early noughties so Kodak could continue to sell celluloid? I bet a lot of people were affected by th…
Personally, I have no interest in protecting businesses. I have an interest in protecting competition. I like the disruption and I like the creating of new value that they bring. I just also feel for the individuals who often are so vigorously disrupted.
Earlier quoted context omitted.
> There aren't easy answers here I don't think the circumstances are as grim. Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. They may need to apply for a job at the new factory store, but that's really the extent of the displacement. You're not eliminating an entire industry. You're re-organizing it to reduce friction.
Agreed. And I didn't mean to sound grim. Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or u…
"short-term" means being unemployed or unemployable for a while.
The hard truth is that to the degree that these things do work as a simplistic free market model might predict (and that is clearly arguable) they may operate on time scales that will do nothing to alleviate to problems the changes cause.