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I can understand things like the Three Tier System for alcohol because that is an addictive substance that can cause serious harm if improperly used. But why is

by timdorr 13y ago

I can understand things like the Three Tier System for alcohol because that is an addictive substance that can cause serious harm if improperly used. But why is this same logic in any way applicable to automobiles? They want to impose a required distribution layer between the manufacturers and the consumer. Enforced middlemen. Imagine if that applied to the startup world: "Oh hey, you want to buy this SaaS product I built? Well, you can't sign up on my site, you'll have to buy from one of my SaaS distributors." Madness.

jcampbell1 13y ago
Franchise law has a long history built around some truly abusive things done by the manufacturer/parent company. I don't think this is going to be a big deal. If you own a fleet of cars (think rental car company), you can't technically buy from a manufacturer, but the standard loophole is the negotiations happen with the manufacturer, and the local dealer is the official seller and the dealer gets something like $75/car. Tesla should have no problem setting up a similar arrangement.
Meekro 13y ago
Have you ever shopped for high-end routers, like Juniper or Fortigate? For some reason they absolutely refuse to sell directly, and force you to go through one of those stupid resellers that don't even understand the product they're reselling. Ask the resellers any non-trivial questions, and they forward it back to their contact at the main company. Never understood that.
- jurjenh 13y ago
  There's a relationship management issue there somewhere - supporting one-off small volume sales has a definite cost at some point - someone needs to process and fill the order. Limiting sales to "big" customers means you can spend less time dealing with all the order processes and focus more on a decent product (or decent profits, wherever the focus may lie)
  - Meekro 13y ago
    That was my first thought, too, but here's how my exchange went: 1. Contact fortigate, they put a sales guy in touch with you. Ask him some tech questions, turns out he doesn't know anything. He gets a tech manager in the loop. Ask him, he doesn't know shit either, he gets one of his subordinates in the loop. Now there's 3 cc's on the email thread, and maybe they can tell you some details about the product. 2. They put you in touch with a reseller. A "relationship manager" at the reseller puts you in touch with a sales guy at the reseller. That sales guy tells you that you need a higher-end product than the one you expected, for twice as much money. You start questioning that, turns out he doesn't know much about the product and says "let me get fortigate back in on this" and pulls the 3 people from step 1 back into the email thread. 3. Now there's 5 people in the loop, with several of them arguing about what you need. Eventually it gets sorted, and the reseller ships you the thing you told them you needed a week ago. .. all of this was to sell me about $4000 worth of hardware, total. Now I'd understand their thinking if the reseller would just handle the customer relationship, but they had to pull fortigate back into it every time I asked a non-trivial pre-sales question, the kind any sysadmin would ask. Makes me wonder what all those "relationship managers" and sales guys are for.
    - jurjenh 13y ago
      How often do sysadmins actually make the call on what gets bought? For a purchasing dept, they'd probably stop at step 2, get the over-priced product and everyone's happy. The re-seller is obviously the under-performing part of your exchange, it should be their business to know what they are selling. Most likely it shows the current state of the market - not very many buyers ask these technical questions, hence the experience is not there for the reseller. If you'd want to feel better about it, at least the reseller you've dealt with now has some more knowledge of one of the products they are selling.
- maratd 13y ago
  > Have you ever shopped for high-end routers, like Juniper or Fortigate? A lot of people don't understand that this isn't just high-end routers. It's actually all electronics. Try to buy a motherboard directly from the manufacturer, or a monitor, or really, anything else. The manufacturer will direct you to their sales wing, at which point, you will be instructed to buy from their approved distributors. Those distributors are large companies that work as middle men. And then even those distributors will not sell their goods to you unless you have a reseller license and go through their application process.
  - Meekro 13y ago
    I wouldn't have minded if the distributor was newegg or something, like it is for motherboards. But all these router resellers are really stupid "solution providers" filled with "customer relationship managers" who can't actually answer detailed questions about the product, and don't seem to do much of anything other than draw a salary that inflates the final price.
  - jamesaguilar 13y ago
    It's one thing when it's voluntary. The electronics manufacturers work with resellers because they want to. It's a completely different thing when the law requires it.
  - rtkwe 13y ago
    What that does it vastly simplify the logistics for the manufacturers. If you could order directly from them they'd have to hire sales people or people to run their web store, shippers to pack and ship individual components instead of just palletizing everything, and then have to deal with the laws of each customer's country about taxes. It's much simpler for them and more efficient on their end to just sell to a middleman.
    - maratd 13y ago
      > It's much simpler for them and more efficient on their end to just sell to a middleman. In that case, Dell, Apple, Sony, and Microsoft must be morons. Because they sell directly to consumers. It's not about simplicity or efficiency. It's much more efficient to sell directly to the consumer. It just takes an immense amount of resources that smaller manufacturers simply do not have. That's why medium/small sized manufacturers rely on larger middle men and retailers. Not because it's more efficient, but because they simply don't have a choice in the matter. They don't have the resources to go directly to the consumer.

by timdorr 13y ago

jcampbell1 13y ago

Franchise law has a long history built around some truly abusive things done by the manufacturer/parent company. I don't think this is going to be a big deal. If you own a fleet of cars (think rental car company), you can't technically buy from a manufacturer, but the standard loophole is the negotiations happen with the manufacturer, and the local dealer is the official seller and the dealer gets something like $75/car. Tesla should have no problem setting up a similar arrangement.

Meekro 13y ago

Have you ever shopped for high-end routers, like Juniper or Fortigate? For some reason they absolutely refuse to sell directly, and force you to go through one of those stupid resellers that don't even understand the product they're reselling. Ask the resellers any non-trivial questions, and they forward it back to their contact at the main company. Never understood that.

jurjenh 13y ago
There's a relationship management issue there somewhere - supporting one-off small volume sales has a definite cost at some point - someone needs to process and fill the order. Limiting sales to "big" customers means you can spend less time dealing with all the order processes and focus more on a decent product (or decent profits, wherever the focus may lie)
- Meekro 13y ago
  That was my first thought, too, but here's how my exchange went: 1. Contact fortigate, they put a sales guy in touch with you. Ask him some tech questions, turns out he doesn't know anything. He gets a tech manager in the loop. Ask him, he doesn't know shit either, he gets one of his subordinates in the loop. Now there's 3 cc's on the email thread, and maybe they can tell you some details about the product. 2. They put you in touch with a reseller. A "relationship manager" at the reseller puts you in touch with a sales guy at the reseller. That sales guy tells you that you need a higher-end product than the one you expected, for twice as much money. You start questioning that, turns out he doesn't know much about the product and says "let me get fortigate back in on this" and pulls the 3 people from step 1 back into the email thread. 3. Now there's 5 people in the loop, with several of them arguing about what you need. Eventually it gets sorted, and the reseller ships you the thing you told them you needed a week ago. .. all of this was to sell me about $4000 worth of hardware, total. Now I'd understand their thinking if the reseller would just handle the customer relationship, but they had to pull fortigate back into it every time I asked a non-trivial pre-sales question, the kind any sysadmin would ask. Makes me wonder what all those "relationship managers" and sales guys are for.
  - jurjenh 13y ago
    How often do sysadmins actually make the call on what gets bought? For a purchasing dept, they'd probably stop at step 2, get the over-priced product and everyone's happy. The re-seller is obviously the under-performing part of your exchange, it should be their business to know what they are selling. Most likely it shows the current state of the market - not very many buyers ask these technical questions, hence the experience is not there for the reseller. If you'd want to feel better about it, at least the reseller you've dealt with now has some more knowledge of one of the products they are selling.
maratd 13y ago
> Have you ever shopped for high-end routers, like Juniper or Fortigate? A lot of people don't understand that this isn't just high-end routers. It's actually all electronics. Try to buy a motherboard directly from the manufacturer, or a monitor, or really, anything else. The manufacturer will direct you to their sales wing, at which point, you will be instructed to buy from their approved distributors. Those distributors are large companies that work as middle men. And then even those distributors will not sell their goods to you unless you have a reseller license and go through their application process.
- Meekro 13y ago
  I wouldn't have minded if the distributor was newegg or something, like it is for motherboards. But all these router resellers are really stupid "solution providers" filled with "customer relationship managers" who can't actually answer detailed questions about the product, and don't seem to do much of anything other than draw a salary that inflates the final price.
- jamesaguilar 13y ago
  It's one thing when it's voluntary. The electronics manufacturers work with resellers because they want to. It's a completely different thing when the law requires it.
- rtkwe 13y ago
  What that does it vastly simplify the logistics for the manufacturers. If you could order directly from them they'd have to hire sales people or people to run their web store, shippers to pack and ship individual components instead of just palletizing everything, and then have to deal with the laws of each customer's country about taxes. It's much simpler for them and more efficient on their end to just sell to a middleman.
  - maratd 13y ago
    > It's much simpler for them and more efficient on their end to just sell to a middleman. In that case, Dell, Apple, Sony, and Microsoft must be morons. Because they sell directly to consumers. It's not about simplicity or efficiency. It's much more efficient to sell directly to the consumer. It just takes an immense amount of resources that smaller manufacturers simply do not have. That's why medium/small sized manufacturers rely on larger middle men and retailers. Not because it's more efficient, but because they simply don't have a choice in the matter. They don't have the resources to go directly to the consumer.