4 ms·

Best Buy sells Apple Products. Apple has Apple stores. Best Buy took the same risks. I don't see the logic.

micromacrofoot 5y ago
You see the logic, but you're using the first counter example you can think of to disregard it. (Coincidentally, computers used to be sold through dealers like Best Buy until the mid 80s) There are 3,000 Chevy dealerships in the US (more than Best Buy and Apple stores combined). That's 3,000 businesses that Chevy doesn't need to prove the market for, pay property taxes on, hire salespeople for, insure, etc... all these dealerships have incentives to promote the manufacturers' brand and provide localized support. They do their own advertising too. I'll go out on a limb and say Tesla will never have 3,000 locations. Ever. They won't want to maintain that much physical overhead (and they're nowhere near the capacity to produce inventory at that scale). This might mean you're driving 4+ hours to get service if you live somewhere like Maine, and if you want a new car next week... well, good luck (if you order a new Model Y now you might get it by early 2022 at best). Again, maybe the dealer model is outdated, maybe it's bad... I don't know... but I wouldn't call dealerships "useless middlemen" or "completely stupid" – there are plenty of benefits that go back decades, and still exist today. If all manufacturers stopped selling inventory to dealers tomorrow, you'd be totally screwed if you wanted to go buy a car. Even if you remove the annoying sales tactics and profit, dealerships are the entire infrastructure for the way manufacturers maintain inventory and sell cars.
yunohn 5y ago
Best Buy also sells a million other things.
- arbitrary_name 5y ago
  The car dealers are free to sell other cars? Or dashboard bobbleheads, perhaps?
  - yunohn 5y ago
    It’s not feasible to stock a thousand different cars, and provide servicing and support for all of them. You really can’t make random comparisons, it doesn’t further the discussion.

You see the logic, but you're using the first counter example you can think of to disregard it. (Coincidentally, computers used to be sold through dealers like Best Buy until the mid 80s) There are 3,000 Chevy dealerships in the US (more than Best Buy and Apple stores combined). That's 3,000 businesses that Chevy doesn't need to prove the market for, pay property taxes on, hire salespeople for, insure, etc... all these dealerships have incentives to promote the manufacturers' brand and provide localized support. They do their own advertising too. I'll go out on a limb and say Tesla will never have 3,000 locations. Ever. They won't want to maintain that much physical overhead (and they're nowhere near the capacity to produce inventory at that scale). This might mean you're driving 4+ hours to get service if you live somewhere like Maine, and if you want a new car next week... well, good luck (if you order a new Model Y now you might get it by early 2022 at best). Again, maybe the dealer model is outdated, maybe it's bad... I don't know... but I wouldn't call dealerships "useless middlemen" or "completely stupid" – there are plenty of benefits that go back decades, and still exist today. If all manufacturers stopped selling inventory to dealers tomorrow, you'd be totally screwed if you wanted to go buy a car. Even if you remove the annoying sales tactics and profit, dealerships are the entire infrastructure for the way manufacturers maintain inventory and sell cars.

yunohn 5y ago

Best Buy also sells a million other things.

arbitrary_name 5y ago
The car dealers are free to sell other cars? Or dashboard bobbleheads, perhaps?
- yunohn 5y ago
  It’s not feasible to stock a thousand different cars, and provide servicing and support for all of them. You really can’t make random comparisons, it doesn’t further the discussion.