Don’t Bet on Direct-To-Consumer Automotive Retail Yet

medium.com

7 points·sgustard··3 comments

I think the arguments are pretty weak here and it comes off as a little "dealership-apologist". All of the cons of direct-to-consumer can just as easily apply to the dealership model. Yet none of the cons of the dealership model apply to direct-to-consumer.

It's also a bit of a mistake to assume that the way Tesla does things is the way the rest of the automotive industry would do things. Tesla has inventory problems because they're new and can't keep up with the demand. As if Honda is going to have problems keeping Civics in stock.

It also doesn't do a good job of explaining that the advantages of the dealership model in the early days have been greatly eroded by just in time supply chain techniques and other improvements in manufacturing efficiency.

That and most of the actual argument boils down to "it's too hard to do both". Which I think is a poor argument at the best of times when the 2 goals are orthogonal and not at all at odds with each other.

Almost every industry is going back to direct sales. Even Microsoft a behemoth of the channel style of distribution and sales has started making direct sales one of it's higher priorities.

Yep, McDonald's has begun purchasing franchises back as well. I think you're right, that this distributed ownership model is an artifact of an earlier time. I might attribute this to better communication abilities. It made sense to have autonomous dealers; it was hard for everyone to communicate with each other using telephones and snail mail. With the internet, companies can run advanced inventory databases, run prediction algorithms to shift inventory to areas with expected demand, have regional managers focus on local communities, instantly update pricing across the country etc. etc.

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