Why can't we cut out the middlemen (dealers) in todays age?

[m3keash]

Originally Posted by Technic

They do make money, this is not a free service. Anything from $500 to up to 7% over ED invoice, plus any financing incentives.

It's not free, but none goes to the dealer; no holdback, no marketing funds, nothing.

[Darth One]

and again, why would BMW spend tens of millions building "factory stores" when it has a vast network of retail stores that the dealers all pay for? not to mention if I was the government I'd take a good hard look at them for antitrust if they went down this route.

I wonder, what percentage of BMW sales are from dealer inventory, versus orders? I'm willing to bet that it's heavily lopsided towards the former. it's not broke for BMW so they're not going to try and fix it and court a whole mess of trouble.

[robb7979]

Fleet sales, if you can convince them to sell to you is almost exactly like buying directly from the Manufacturer.

[Technic]

Originally Posted by m3keash

It's not free, but none goes to the dealer; no holdback, no marketing funds, nothing.

The dealer makes money on the actual sale on ED, and good money on that as they can sell as many ED cars as they want and still keep their allocation numbers intact.

That's different than saying that they make no money on ED, and still you have to deal with the dealer.

[jphughan]

Originally Posted by Ateam

Again I am not saying eliminate them but rather give people the option if they WANT to avoid them to go directly to the manufacturer just like you can with tons of other products and buy them for a lower cost but at the same time the company (bmw) would also make more (basically you guys both benefit by cutting the middleman) You could actually leave the dealer how it is and not scale it back but just allow those who want to go direct to do so. IMO with people in the newer generation this would INCREASE sales if they did not have to haggle with the dealer in person.

Just like at the automatic checkouts at grocery stories or hardware or whatever. Sometimes there is a lineup just to use that even if the real people checkouts are open because fact is most newer age people today do not like contact with people! Not saying its a good thing but it is the way it is.

If I want to avoid the dealer than why cannot I pay a couple grand less and go to the manufacturer and why can't they save a couple grand by not having them do all the b.s that most of us do not need. ie-their "expertise", deliver prep (which is wrong half the time) or their "salesmanship" since we would be already buying the car and knowing what we want.

Not saying this is the only way but I promise you this will come down the pipelines, its just a matter of when. I hear you though about not being able to eliminate them, that was an error on my part to think that is even possible due to the things you guys mentioned!

The problem with this theory is what I call the "Amazon effect", and it's why Amazon is having such detrimental effects on brick and mortar stores. If there were an option to buy direct from BMW at a discount, then what's to stop a customer from going to a dealership, taking up all their time and resources test driving, asking questions, etc, and then figuring out exactly what they want and ordering from BMW? Hopefully their integrity, but otherwise nothing -- and that's precisely the problem. Under those conditions dealerships would be providing a service without getting compensated in the form of a sale even if the customer wants the car, in which case the dealerships would soon die out, leaving people who actually NEED them unable to take advantage of them, which in turn hurts BMW in lost sales. That doesn't even take into account the ill will that would be directed at BMW by dealers for essentially undercutting them in price, and bad relations between BMW and its dealers could only result in a poor experience for the customer.

Personally I think the practice of going to a brick and mortar store to find what you want and then buying it online at a discount is despicable. If you do all your research without walking into a store, then by all means make your purchase anywhere you want, but if you go to a brick and mortar store to check out a bunch of TVs in-person and find one you want to buy, at least have the decency to support the business whose services you benefitted from by making your purchase with them rather than going elsewhere. Otherwise eventually that brick and mortar store you used to inform your buying decision won't be there anymore -- and if you complain that you don't buy at brick and mortar stores because they add more cost than they're worth, maybe that's because they have to cope with fewer sales because of people who do this....

[rdollie]

I think this is why Volvo (who has the longest running overseas delivery program) typically runs their factory direct program through the fleet manager at most dealerships. I bought a '99 S80 T6 this way and saved thousands off retail (which you can do with most Volvos that aren't new models but this was at the time), received free airfare, and hotel (this is their base program - at times they do fun themed events like meet your car at the Ring with some other new owners.)

If I can buy direct from Volvo at a discount (in large part because they register the car and require you to drive it so you skip the new car import tariff built into MSRP when your car is shipped over) with no hassle/haggling why can't I do the same with BMW (I understand BMW wouldn't want to discount as much since their product is more in demand than Volvo but seems there's still room for a win-win here for BMW and owners.)

Originally Posted by robb7979

Fleet sales, if you can convince them to sell to you is almost exactly like buying directly from the Manufacturer.

[gthal]

This won't happen for a variety of reasons... mainly BMW is not structured to deal to customers directly. The are a manufacturer... NOT a reseller. They could ramp up to do this but it would be excessively expensive. Second, it they ever sold online, it would have to be at MSRP otherwise it would hurt dealers and that would not work. If that's the case, why would you buy online? Lastly, I think competition is a good thing. The ability to play one dealer off against the other keeps everyone honest. If there was a single place to buy the car, there is no competition. You can argue you could have both (online and dealers) but that would only work if online or direct sales were at full MSRP because you cannot have the manufacturer competing with other resellers.

The other issue is financing, etc. That is harder to deal with online than simply filling out an order form to pick options for a car.

So, although an interesting idea, it is not one we will be seeing anytime soon. Little to no advantage for BMW other than headache and problems trying to become a retailer and, IMO, little benefit to consumers other than the convenience of ordering online.

[jphughan]

Originally Posted by rdollie

I think this is why Volvo (who has the longest running overseas delivery program) typically runs their factory direct program through the fleet manager at most dealerships. I bought a '99 S80 T6 this way and saved thousands off retail (which you can do with most Volvos that aren't new models but this was at the time), received free airfare, and hotel (this is their base program - at times they do fun themed events like meet your car at the Ring with some other new owners.)

If I can buy direct from Volvo at a discount (in large part because they register the car and require you to drive it so you skip the new car import tariff built into MSRP when your car is shipped over) with no hassle/haggling why can't I do the same with BMW (I understand BMW wouldn't want to discount as much since their product is more in demand than Volvo but seems there's still room for a win-win here for BMW and owners.)

What you're describing sounds like Euro Delivery, which BMW already does. Consumers get a substantial discount on the car because the car isn't "new" when it's being imported anymore, and BMW offers it through its dealer network.

[WRXXX]

Originally Posted by jphughan

The problem with this theory is what I call the "Amazon effect", and it's why Amazon is having such detrimental effects on brick and mortar stores. If there were an option to buy direct from BMW at a discount, then what's to stop a customer from going to a dealership, taking up all their time and resources test driving, asking questions, etc, and then figuring out exactly what they want and ordering from BMW? Hopefully their integrity, but otherwise nothing -- and that's precisely the problem. Under those conditions dealerships would be providing a service without getting compensated in the form of a sale even if the customer wants the car, in which case the dealerships would soon die out, leaving people who actually NEED them unable to take advantage of them, which in turn hurts BMW in lost sales. That doesn't even take into account the ill will that would be directed at BMW by dealers for essentially undercutting them in price, and bad relations between BMW and its dealers could only result in a poor experience for the customer.

Personally I think the practice of going to a brick and mortar store to find what you want and then buying it online at a discount is despicable. If you do all your research without walking into a store, then by all means make your purchase anywhere you want, but if you go to a brick and mortar store to check out a bunch of TVs in-person and find one you want to buy, at least have the decency to support the business whose services you benefitted from by making your purchase with them rather than going elsewhere. Otherwise eventually that brick and mortar store you used to inform your buying decision won't be there anymore -- and if you complain that you don't buy at brick and mortar stores because they add more cost than they're worth, maybe that's because they have to cope with fewer sales because of people who do this....

So true...if everyone just decides to buy directly online then eventually all these brick and mortar businesses will fold. Then where will ppl go to actually see the product before buying? You'll just have to trust your gut instincts and press the "buy" button? On something that is a few bucks, fine. But $60k+?? I am also in the wholesale business. From time to time, I always have ppl calling us directly hoping to cut out the retail middleman to save money. Problem is...we don't have the infrasture to deal with individuals. We import in bulk and sell in bulk. Every business has their place.

As for the few remaining dealers as OP suggested, why should they be in business if chances are ppl will come to their stores, test out the products, ask numerous questions and in the end order online directly with bmw? Makes no sense. Attend a business class to better educate yourself. Geez.

[rdollie]

Yes, conceptually the same but last I checked (it's been a few years) BMW didn't offer much of a discount if any if you factored in cost to travel to Europe. By contrast a couple of Euro brands do and have a process that allows you to skip the salesman (but not the dealership.)

Originally Posted by jphughan

What you're describing sounds like Euro Delivery, which BMW already does. Consumers get a substantial discount on the car because the car isn't "new" when it's being imported anymore, and BMW offers it through its dealer network.

[Technic]

Originally Posted by rdollie

Yes, conceptually the same but last I checked (it's been a few years) BMW didn't offer much of a discount if any if you factored in cost to travel to Europe. By contrast a couple of Euro brands do and have a process that allows you to skip the salesman (but not the dealership.)

It must have been at least three years... ED discount is as much as 14% from MSRP, including options.

[Ateam]

How many of you really made your decision based on a test drive? I guess probably msot do but I certianly did not. Especially since you cannot really drive the m cars or most cars for that matter how you would really want to drive it so not sure point of test drives

[Technic]

Originally Posted by Ateam

How many of you really made your decision based on a test drive? I guess probably msot do but I certianly did not. Especially since you cannot really drive the m cars or most cars for that matter how you would really want to drive it so not sure point of test drives

No problem here test driving any car in 27+ years of driving, including M cars.

One thing, though: the M3, as any other high strung-engine car, requires a particular mentality to really appreciate it for what it is. In paper, 414hp and 295lbs-ft is impressive. However, I once let a coworker of mine drive my M3 while I was taking my girlfriend's VW CC to the VW dealer, he following me. I took several highway exits at more than double the speed limit and he could not keep up.

After I dropped off the CC he seriously told me that he was disappointed with the M3 performance as he tried to keep up and he felt that the M3 was "slow" to react. The CC is Sport (2.0T, 200hp/207lbs-ft), completely stock, running on regular fuel and somehow I smoked a M3.

IMO, a M3 test drive is essential if you are coming from "easier" driving cars. Cars that accelerate strongly without too many rpms. Otherwise you will be in forum like this complaining about how the M3 feels slow, the lack of torque and how you ended up buying something that really was not what you thought it was.

[kmarei]

believe it or not i was never in the market for an M3
i had just bought my Audi A5 about 3 months earlier
i went for a test drive with a friend from work
he was driving with the dealer guy sitting in the front
i was sitting in the back
he took one corner
it was 270 degree corner
took it damn fast
and i was immensely impressed with how much grip the car had
not a hint of tire squeal
and the rest, as they say, is history
i'm about to pick up my 2nd E92 M3