Typically, the Tier III dealer has narrowed his lines a bit because he wants to focus on his top three manufacturers so he can buy in the best brackets and increase his wholegoods margin. This also makes the dealer more important to the manufacturer. This dealer can actually get his suppliers to work “for” him; moving inventory to other dealerships, assisting at open houses and trade shows, etc. The Tier III dealer has leverage.
When you can reach Tier III, everything will be OK—as long as you keep your margins in line and your expenses under tight control. You can make some serious money in this business, just like you can make some serious money in Tier I. But, in most cases, if you flounder around in that no-man’s land known as Tier II for too long, you’re dead. If you’re a Tier II dealer, get a strategy in place now so you’re not the next one to bite the dust.