Are $1495 Door Edge Guards the Path to Prosperity?

[ed.brooks]

Monday I was reading Jalopnik, the hugely popular automotive blog, and came across this story, Would You Pay $1495 For These $8 Door Edge Guards?



Written by Ben Popken, the founding editor of Consumerist, it details the story of a reader that discovered a dealership in Maryland adding a $1495 addendum sticker to every vehicle in stock for Door Edge Guards. A little research uncovered the part for sale on Amazon for 8 bucks.

This practice allows the dealer to advertise an attractive price to drive traffic while burying language like this in the fine print, “Pricing throughout the website does not include any taxes, tags, $199 processing charge, prep fee, freight, or dealer installed options (if applicable).”

This dealer seems to recognize that consumers want transparency, but at the same time the dealer wants to keep both feet firmly planted in the old school. Rather than building and selling value, they are using this as a ploy to aid their negotiations.

The outcome? A huge influx of negative reviews. Do you think the short-term increases in grosses are worth the long-term negatives this dealer will be facing for months or years?

 

[Agrrip]

That HAS to be a typo...maybe it should be a more reasonable $14.95...otherwise shame on them!

 

[Jeff Kershner]

I hope thats a typo but as much as hate to say this, it wouldn't surprise me if it's not. I've seen a few dealers in Maryland take advantage of the ADM sticker.

I don't see how this could ever have a Positive long term benefit. Saddening.

 

[Alex Snyder]

One of my coworkers just resurrected this article from 2001: Confessions of a Car Salesman - Edmunds.com and I gave it a re-read.

I could definitely see the first dealership this journalist worked at doing something like this. So my point, coincides with Ed's - all old school = no future school.

 

[Eley Duke]

WOW - Let me guess; the "accessories babe" has to hike her skirt down repeatedly and is wearing 4 inch heels and falling out of the top of her shirt as well?? I am pretty good in F&I when ever I get the chance to jump in there, but I am not even that good selling $1,495 door edge guards.

Thats just stupid.

 

[Jason]

That's nothing, Bill Doraty Kia marks their vehicles up with a $3,999 "Passive Ignition Cutoff" (whatever that is) so they can advertise $4,000 of any new Kia. Google Reviews Here

 

[ddavis]

I hate that kind of business. I just left a market where three out of four of my closest direct competitors did that kind of thing and worse. All were from the same group.

Why do dealers still use those tactics? ...because it works. Customers come in and find out that it is too good to be true and still buy. Three years later, they come back to the same smoke and mirrors and buy again.

One of my favorite quotes: “Nobody ever went broke underestimating the taste of the American public.” Henry Louis Mencken

Car people are street savvy. We don't fall for jick. We try to predict what others will do based on our way of thinking but we are very much in the minority. Besides being street smart, the trait that really sets us apart is being decisive. 80% will come in to a store and buy something different than what they came in on. The average customer spends 18 to 19 hours, online, shopping for a car. We can not use empathy to try to predict how the general public is going to act. You have to watch them like white rats in a maze. Remember when a guy got rich selling pet rocks? The news says that the next Presidential election is going to be tight. I think we give people more credit than they deserve.

 

[ed.brooks]

One of my coworkers just resurrected this article from 2001: Confessions of a Car Salesman - Edmunds.com and I gave it a re-read.

I could definitely see the first dealership this journalist worked at doing something like this. So my point, coincides with Ed's - all old school = no future school.

And there is is again; 'Old School' vs. 'New School'.

I think, at it's core, this is the issue. The 'Old School' will work to squeeze every dime of profit from every customer. Newer tactics like the $1495 Door Edge Guards are designed to continue this age-old practice.

Conversely, 'New School' dealers work to increase profits by increasing Market Share - increasing the number of customers they serve. The advantage the 'New School' dealers enjoy is that we live in the internet age. As Doug mentioned, today's customers spend hours shopping and researching online before ever walking into a store. Price and Reputation are easy to discern today as they never were before. 'Old School' dealers that try to obscure their pricing strategy in today's transparent marketplace will be found out and their reputation will suffer.

The Tipping Point will come for these dealers when the number of customers they draw becomes so reduced that they get more and more desperate in their tactics, thus destroying their reputations. The ZMOT (if you must) is driven by Price and Reputation more today than ever before - not Inflatable Gorillas and carpet bombing newspaper ads in your market. The winners will be defined by those who best embrace today's transparent market and the losers by those who desperately try to hide from it.

 

[ddavis]

And there is is again; 'Old School' vs. 'New School'.

I think, at it's core, this is the issue. The 'Old School' will work to squeeze every dime of profit from every customer. Newer tactics like the $1495 Door Edge Guards are designed to continue this age-old practice.

Conversely, 'New School' dealers work to increase profits by increasing Market Share - increasing the number of customers they serve. The advantage the 'New School' dealers enjoy is that we live in the internet age. As Doug mentioned, today's customers spend hours shopping and researching online before ever walking into a store. Price and Reputation are easy to discern today as they never were before. 'Old School' dealers that try to obscure their pricing strategy in today's transparent marketplace will be found out and their reputation will suffer.

The Tipping Point will come for these dealers when the number of customers they draw becomes so reduced that they get more and more desperate in their tactics, thus destroying their reputations. The ZMOT (if you must) is driven by Price and Reputation more today than ever before - not Inflatable Gorillas and carpet bombing newspaper ads in your market. The winners will be defined by those who best embrace today's transparent market and the losers by those who desperately try to hide from it.

Ed, when you mentioned reputation, I did a search on a couple of my old competitors and noticed this on one of the DealerRater sites:

DEALER WARNING: DealerRater.com has reasonable cause to believe that the individuals or entities associated with or having an interest in this Dealer may have posted fraudulent reviews for this Dealer and/or for other Dealers. We make our best efforts to identify suspicious content and are always working to improve the processes we use to assess dealer reviews. The other two, in the group, now have marginal ratings and some poor reviews. This is going to make it much more difficult for the old school guys.​

 

[joe.pistell]

WTG Chip and DealerRater!