The COVID-19 pandemic has done a great job of highlighting the manufacturers who have a long term view and the ones who value their dealer partners more than shareholders. While we have seen some of the OEM’s who really stepped up with some great dealer support programs (flooring coverage, expanded programs and rebates, deferral of dealer payments) we have seen others who have left their dealers out in the cold, fending for themselves. I’m not going to call any of the worst offenders out, but you know who you are.
Over the last couple of years, I’ve been pressing dealers to look at the ROAI (Return On Average Inventory) by brand. The fast turning products with good margins will carry a high ROAI while brands that require high stocking levels and require lots of dealers discounts will have a low ROAI. The dealers who focused on this metric and made adjustments now find themselves in a great position.
Now’s a great time to take notes about who supported you during this crisis and who didn’t. Depending on your State laws, now might also be a great time to punt a brand (especially if they are required to repurchase inventory).
When this is all said and done, support the OEM’s who chose to support you.
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