Mark, vendors are hesitant for a very good reason. It is my understanding that the fee structure is governed by a confidentiality agreement - particularly in the case of Reynolds. I have asked numerous vendors what the fee structure is and have been told that they are unable to disclose it because of a confidentiality agreement. Only in the last 12-18 months or so has there been any transparency into the fee structure. vAuto and xTime both have recently made explicit disclosures of what the integration fees are that dealers are being forced to pay. Again, my understanding is that the fees are not getting marked up by the vendors but as I stated in my earlier post - we recently received a 15% increase for xTime integration. It's absurd. According to one vendor the fee structure for Reynolds can be as much as $100,000 or more one time upfront plus $x amount per rooftop per month. Dealers ultimately end up paying for this. He cited this enormous cost as the primary reason why they could not become certified/taxed. One final example before I go: Subaru dealers late last year were informed that they will pay $881 per month as a pass through to Reynolds and Reynolds for the Subaru Data Exchange Interface. Based upon my understanding of how many Subaru dealers utilize Reynolds software that translates into a $1.7 million annual revenue stream for Reynolds. And given the aggressive price increases we have seen other integrations hit with - that revenue stream will grow steadily in the years to come. Again, this issue played a major role into our group's decision to terminate our relationship with Reynolds.
Our DMS appears to be taking advantage of us - WHAT ARE YOU PAYING FOR API INTEGRATION?
- Thread starter Gene Tilby
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I know as a Lightspeed user there are not a lot of options on your side, but if you are a car dealer you have options. At this point I almost look at people who still complain about RR or CDK and ask them, "Why don't you switch" you can switch to a couple of different DMS's that are just as good if not better and do not have the integration fees, or the high cost and contracts in the first place!
- Dec 30, 2009
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There is a reality that from the old way of dialing into a modem and grabbing and dropping files via FTP things have changed a great deal. I can't argue that the DMS companies make enough money, but of course in my own business (and you in yours) enough is never enough, we make as much as we can, period. So for that reason I'll say the the DMS companies have a new expense derived from 3 main areas:
1) an increase number of international hackers interested in small business
2) a stronger legal liability on data breaches
3) a higher number of vendors requiring DMS data which in turn increases exposure and vulnerability
When it comes to the vendor side, the way this has been rolling out is painful. As a vendor I must do whatever I can to adapt to the other systems that you buy and make a smooth and seamless integration. For that, we put people, resources, and time to make sure our systems work with the DMS that you choose to have.
In our contract with REY for example we have an entry fee, a minimum monthly fee, and then the monthly fee per see which is not prorated. So we must adapt top those imposed rules and work with the dealers and the integrations needed.
It is painful for everyone.
1) an increase number of international hackers interested in small business
2) a stronger legal liability on data breaches
3) a higher number of vendors requiring DMS data which in turn increases exposure and vulnerability
When it comes to the vendor side, the way this has been rolling out is painful. As a vendor I must do whatever I can to adapt to the other systems that you buy and make a smooth and seamless integration. For that, we put people, resources, and time to make sure our systems work with the DMS that you choose to have.
In our contract with REY for example we have an entry fee, a minimum monthly fee, and then the monthly fee per see which is not prorated. So we must adapt top those imposed rules and work with the dealers and the integrations needed.
It is painful for everyone.
And it also says you can't tell anyone what those fees are.
I heard it is because when people hear the price they go into cardiac arrest.
- Feb 28, 2017
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I can see your point from the vendors point of view and yes, we are all in business to make a profit. It is difficult to say what is fair due to the people, resources and time costs of creating and then supporting these integrations, that was the main reason for asking the question regarding integration in the first place. I guess that we prefer to sheer our sheep instead of skinning them. I'm just trying to make sure we aren't being skinned.
Make no mistake about it....you are getting skinned. The monthly charges for DMS integrations are obscene. See JLewis74 post above....he nails it.
- Dec 30, 2009
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@Gene Tilby
Not defending the DMS company but asking what's fair to make in business is such an impossible question.
To answer @rollo695, while I don't like the situation I'm in (I have to charge my clients for something someone else does) I truly don't know what it takes to maintain REY security. Could be Mathew Broderick alone (Wargames 1983) or they could have 15 top programers at a $2M a year cost.
Not defending the DMS company but asking what's fair to make in business is such an impossible question.
To answer @rollo695, while I don't like the situation I'm in (I have to charge my clients for something someone else does) I truly don't know what it takes to maintain REY security. Could be Mathew Broderick alone (Wargames 1983) or they could have 15 top programers at a $2M a year cost.
- Feb 28, 2017
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I did read his post and appreciated it, I wasn't aware of the 2 companies that I found, contacted them and went through a pretty high level demo. They look like good products and as he mentioned, no integration costs. I would love to look at switching but unfortunately for us, at this time, that isn't an option. But that's ok, we are moving forward with the DMS we have and we're going to make the best of it.
- Nov 10, 2015
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- Mark
" I truly don't know what it takes to maintain REY security."
Oh, I have a really good idea of what it should cost. And based on what I know about their fee structure, they are making mountains of cash.
Exposing sensitive data via APIs and protecting it is relatively routine stuff. Look at companies like Chargify or Stripe that expose APIs to handle financial transactions. Or companies like Xero that provides APIs into accounting data. I can integrate into the NYSE cheaper than I can some DMS companies. There is no doubt that DMS's are a target, but securing data, while allowing access to legitimate users, isn't something unique to the DMS companies. Companies that are equally large, and even larger, targets do it every day without forcing vendors to rake over piles of cash.
Oh, I have a really good idea of what it should cost. And based on what I know about their fee structure, they are making mountains of cash.
Exposing sensitive data via APIs and protecting it is relatively routine stuff. Look at companies like Chargify or Stripe that expose APIs to handle financial transactions. Or companies like Xero that provides APIs into accounting data. I can integrate into the NYSE cheaper than I can some DMS companies. There is no doubt that DMS's are a target, but securing data, while allowing access to legitimate users, isn't something unique to the DMS companies. Companies that are equally large, and even larger, targets do it every day without forcing vendors to rake over piles of cash.
- Dec 2, 2009
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REALLY funny thing is -- the SECRECY. Because there were so few players -- (sorry for you others, but for true multi-company accounting, there has only ever been 2 real players -- the Gigantors). So you have one gigantic company charging X for their integrations, and have an entire unit set-up to spot, find, and crush "hostile" integrations. The "secret" is only kept from the other major player, who is only charging a fraction of the first's fees, and has no major investigative effort spotting the "hostile" integrations.
That is, until a couple of years ago. Gigantor B found-out what Gigantor A is charging, and brought their fees in-line, hence the "drops" and rate increases many of the vendors described above are attempting to pass along. Now, the Gigantors are both smiling, equal in their gross(ness).
Capitalism at it's finest
That is, until a couple of years ago. Gigantor B found-out what Gigantor A is charging, and brought their fees in-line, hence the "drops" and rate increases many of the vendors described above are attempting to pass along. Now, the Gigantors are both smiling, equal in their gross(ness).
Capitalism at it's finest
