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Dealerships could have been a thing of the past many years ago. They’ve persisted because dealership owners are often the richest people in sparsely populated a

Dealerships could have been a thing of the past many years ago. They’ve persisted because dealership owners are often the richest people in sparsely populated areas and have a lot of influence on local politicians. This in turn prevents outdated state laws forbidding car manufacturers from selling directly to the public from being repealed. See also, beverage distribution.

throwaway0a5e 6y ago
This is partly true and mostly a baseless trope. Dealerships provide a financial buffer around OEMs allowing them to run slimmer margins, spin production up and down slower, etc. They also provide a point of contact for the customer to complain to as needed (which has some value). As long as the overhead of the dealer system costs less than the benefit it confers it will still be used. If the bean counters at GM thought it was cheaper to lobby to have laws repealed and do direct sales they'd have done it already.
- bradleyjg 6y ago
  If that’s true repealing the laws will be no-op. Let’s find out.
  - thaumasiotes 6y ago
    > If that’s true repealing the laws will be no-op. This doesn't quite follow; dealerships protected by the current laws might provide some value without providing as much value as the law allots to them. In that case, repeal would mean that dealerships continue existing, but become much less profitable.
earthboundkid 6y ago
Why are anti-monopoly laws outdated? I would rather have 10,000 moderately rich families in 10,000 towns across the US than 1 super rich guy. It is better for the economy, better for politics, basically better for everything, even the super rich guy because what's he going to do with the extra money? The laws for dealerships are doing what they were designed to do. Did something change that makes monopolies good now?
- bradleyjg 6y ago
  How is it a monopoly for a company to sell its own product? Is Allbirds a monopoly?
  - earthboundkid 6y ago
    Yes. Why do you think VCs are investing in tennis shoes, lol. They want a damn "moat"!

throwaway0a5e 6y ago

This is partly true and mostly a baseless trope. Dealerships provide a financial buffer around OEMs allowing them to run slimmer margins, spin production up and down slower, etc. They also provide a point of contact for the customer to complain to as needed (which has some value). As long as the overhead of the dealer system costs less than the benefit it confers it will still be used. If the bean counters at GM thought it was cheaper to lobby to have laws repealed and do direct sales they'd have done it already.

bradleyjg 6y ago
If that’s true repealing the laws will be no-op. Let’s find out.
- thaumasiotes 6y ago
  > If that’s true repealing the laws will be no-op. This doesn't quite follow; dealerships protected by the current laws might provide some value without providing as much value as the law allots to them. In that case, repeal would mean that dealerships continue existing, but become much less profitable.

earthboundkid 6y ago

Why are anti-monopoly laws outdated? I would rather have 10,000 moderately rich families in 10,000 towns across the US than 1 super rich guy. It is better for the economy, better for politics, basically better for everything, even the super rich guy because what's he going to do with the extra money? The laws for dealerships are doing what they were designed to do. Did something change that makes monopolies good now?

bradleyjg 6y ago
How is it a monopoly for a company to sell its own product? Is Allbirds a monopoly?
- earthboundkid 6y ago
  Yes. Why do you think VCs are investing in tennis shoes, lol. They want a damn "moat"!