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You're basically asking: Does the dealer's negotiation reduce prices to consumers more than their cuts increase it. I don't think so, at least not for Tesla. I
by esyir 5y ago
You're basically asking: Does the dealer's negotiation reduce prices to consumers more than their cuts increase it. I don't think so, at least not for Tesla.
I'm pretty pessimistic on this. For one, middlemen traditionally increase costs, due to the reduction in inefficiency and well, their cut. Furthermore there already exists a competition layer at the manufacturer level.
In the supply constrained world, this is even more so, as middleman will happily arbitrage prices upwards (see GPU scalpers), meaning that they get to extract value, while providing minimal service of their own.
- tablespoon 5y ago> You're basically asking: Does the dealer's negotiation reduce prices to consumers more than their cuts increase it. I don't think so, at least not for Tesla. What do you mean "at least not for Tesla." Don't they famously lack dealers, so there's no point of comparison for them? > as middleman will happily arbitrage prices upwards (see GPU scalpers) That's certainly true for some middlemen, but I don't think that can be generalized into a rule. Naively, some people think that everyone in a market should act like price gougers, but that's obviously not true, and I don't think the the reason is that there's something special about being the original manufacturer.
- esyir 5y agoMy mental image of Tesla was that it was supply constrained. This argument probably doesn't apply if this has changed. However, if the assumptions hold, then traditionally middlemen arbitrage prices upwards in times of scarcity. Or perhaps I'm just bitter about the GPU shortages, who knows.