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Well, with automotive, the main profit center of dealerships is the service dept. the manufacturer and the dealer are different, and can adapt to the demand of
by lukevp 5y ago
Well, with automotive, the main profit center of dealerships is the service dept. the manufacturer and the dealer are different, and can adapt to the demand of each of the respective roles. More demand for cars but more self-repair means a bigger manufacturer and smaller/fewer dealerships, not that the product cost itself needs to change. I think similarly a company’s size if it’s based on selling support is based around the demand for that support plus the profitability that’s possible to sell it for before there is competition for 3rd parties to provide that support. Kinda like red hat, they made money off of support but anyone could support Linux or red hat systems, so there was a market force keeping them from charging too much for support because other vendors could undercut them.