A lot of dealers have been talking about what they’ll do if a consumer brings in pricing they’ve obtained from SeeDealerCost.com. For example, Paula Fulton wrote in her latest contribution to the conversation within Boating Industry’s LinkedIn group: “I myself am going to focus our efforts on being up front with the customer about our true costs after invoice and build value in OUR business, not just the brands we carry.”
This is a great strategy, except for one problem. The pricing on SeeDealerCost.com doesn’t take into account boat builder programs. A boat builder I spoke with last week gave this example: let’s say a consumer is comparing three competing boat models. In the case of the first boat, the price on SeeDealerCost.com is accurate. It’s exactly what the dealer pays for the boat. In the case of the second boat, the manufacturer’s program offers the dealer a 4-percent discount. And the boat builder’s program on the third boat offers the dealer 12-percent off.
To the consumer on SeeDealerCost.com, the first boat looks like the best deal. So, he visits the local dealer of that brand first. The dealer has decided, like Paula, to be upfront with the customer and explain what the company needs to make to cover its costs (and hopefully make a healthy profit). In this case, the profit margin might be 18 percent.
The consumer then visits the local dealer of the second boat brand. Because that dealer received 4 percent through its boat builder program, that dealer tells the customer the company needs to make 14 percent.
And when the consumer visits the third dealer, whose boat builder offers a 12-percent program, that dealer tells the consumer the company needs to make 6 percent above the SeeDealerCost.com price.
What can the consumer assume from these conversations? If you put yourself in their shoes, would you trust any of them? Consumers can’t be expected to know how much margin dealers truly need to stay afloat. And if everyone's telling consumers a different story, it’s going to discredit the whole industry. That was the boat builder’s point.
He suggested that dealers avoid trying to explain their cost structure to a customer. Instead, he recommended they take the position that SeeDealerCost.com’s prices are often not an accurate portrayal of what the dealer pays.
Now is your chance to weigh in. Have you had any prospects bring SeeDealerCost.com pricing into your dealership for discussion? Have you and your team talked about how to handle this situation if it comes up? What do you think about this boat builder’s suggestion?