OEM’s approach inventory management in different ways, but what is the “right” way? With the wholesale push method, dealers are loaded up with inventory and that creates pressure on the front lines for dealers to sell through it. With a retail pull, OEM’s build products that customers want and market it accordingly, thus driving sales on the front side.
What’s good for the OEM isn’t always aligned with what’s good for the dealer (they can be). With many OEMs being public companies, there is lots of short term pressure and not a lot of thought on the long term and the dealer’s well being. I only know of one major OEM in the powersports industry that places the long term vision of the company and the well being of the dealers before the price of their stock (I’m not saying it out loud, you can guess).
Wholesale push might sell units in the short term, but as it often drives down margins, the result is a weaker dealer body and a loss of long-term brand value. One OEM recently reached out to me asking my thoughts on this problem. It’s a good question. I’m still mulling over what the answer is.
From the dealer’s perspective, how do we find a middle ground that works for everyone?
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