Many dealers are on the same side of the fence as Ahearn. The Internet now presents a huge sales opportunity that can’t be missed—but online sales should always be channeled through the appropriate dealer.
For example, one dealer says he was compensated by his distributor for an online transaction he never put a finger to. The distributor took the order and shipped the product to the consumer, and the dealer received a credit for just under full margin.
Aftermarket parts suppliers that sell and ship directly to consumers is especially frustrating for dealers. “We can fill email or phone orders no problem,” one dealer said. “Make the customer go through us. On the one hand you’re telling (dealers) to stock a bunch of parts, but then you turn around and sell parts directly to our customers.”
Internet sales are not only depriving dealers of business, but are also robbing local communities of tax revenue, according to Lynn Pesson Jr. of Lafayette, LA-based Southland Engine. “Each state should pass a law requiring Internet sellers to charge taxes,” Pesson says. “This way everyone is competing on the same level, and our suppliers would not have to police it. Customers would more likely go to the local dealer, and the states would have the tax dollars they need to support our communities.”
Internet selling aside, simply advertising on the Internet is something dealers are also concerned about. The OPE Industry Relations Task Force is looking to address this issue as well.
“Most manufacturers don’t provide any co-op benefit for online advertising,” Ahearn points out. “This would enable dealers to increase their local online presence, which is quickly becoming the most important and effective advertising tool. At the same time, it would inhibit dealers who sell online and outside of their area by not providing co-op for online advertising that is outside of policy guidelines.”
The OPE Industry Relations Task Force is also looking at the increasing amount of government regulation that’s affecting the Green Industry. Public policy related to taxes, immigrant labor, water quality and conservation, and alternative fuels such as E15 (gasoline with 15% ethanol) are of great concern.
“Dealers want to work more closely with manufacturers so their voice is heard,” Kindinger reiterates. “Whenever we can find an opportunity to work together and come across as a united industry, the better off we’ll be.”
Are we in this together?
“We’re looking to build more rapport between dealers and manufacturers, plain and simple,” Williams adds. Good timing. The economic challenges of the past few years have put additional strain on the dealer/supplier relationship. Manufacturers and distributors have been scrambling to grow sales by increasing market share—not an easy task when demand is weak and the number of dealerships is limited.
Territory protection is often the biggest bone of contention. Dealers who grow sales of a particular brand in a particular area are often “rewarded” with additional dealers who’ll be selling that same brand. This is why more and more dealers feel as though investing in a manufacturer’s line is risky these days.
“Dealers were protected years ago,” says Illinois dealer Kenneth Tease of Harold G. Tease & Son. “A dealer felt an obligation to make his brand a leader in his area. Today it seems like you only have to be breathing to become a dealer.”
This lack of territory protection is one reason why many dealers are becoming increasingly concerned about investing in large orders. Yet the pressure to do so persists.
Randy Longnecker of Olympia, WA-based J&I Power Equipment says his dealership hasn’t had many issues with suppliers attempting to overstock them with wholegoods inventory. But he sees it happen elsewhere, especially when a dealer takes on a new line that’s already well supported by another dealer in the area.