Power13 wrote:
yeah, I made that point on another thread. Dealers telling their customers "No" are probably doing 2 things: - losing that customer for good
- likely nearing the end of their Cervelo dealership, whether they want to or not.
As I said, smart / good shops will find ways to make the deal work for them. Shops that are focused only on that particular sale (or as Dan correctly stated are marginal dealers) are gonna bitch about it.
I sat and discussed this with a Cervelo dealer yesterday, post ride. Good friend and I have provided business help through the years, so I know his business as well as he does, I think. He would probably disagree . . . I've seen your two bullet points twice now and both times it has made me think, so we discussed it, yesterday.
What they have experienced, so far - lots of calls from people looking for the deal. Some from several hours away. Some local. The local people ask questions and want to "understand" the deal, because it does sound too good to be true. Once they even get a little understanding, they have backed away from the deal out of concern for the dealer. Those are the customers that he wants and he is ultra-appreciative that they will pass on the discount in order to not put him in a bind. I agree with him. That's the loyal customer that every shop tries to cultivate. The ones calling from several hours away? No so much. They travel to another town, get their bikes, and disappear back to wherever they came from. No repeat business and probably not another sale to them, ever.
As for Cervelo pulling someone's dealership over this promo, I think they would have a tough time. Suggested Retail Price Maintenance (essentially "forcing" sellers to not sell below a certain price) has been through the courts and, although recent rulings sort of support the right for them to do that, there are also cases where it has been found to be illegal. My friend is entirely for the enforcement of MSRP selling because it's protects him from the online behemoths that could sell for much less, and make up for it in volume. Here's the predicament for Cervelo, though. They "ask" a dealer to sell two bikes at, what could be, a "no profit" sale for the dealer. Okay, but dealer doesn't get a straight up rebate from Cervelo, they get a frame that is valued at $4900, by Cervelo. Dealer needs to get their money back, so they choose to sell the frame for $2000. Yes, they maybe could sell it for more, but they really just care about getting their operating profit in the bank account. So, the question arose -- How can Cervelo enforce anything (I understand dealer agreements)? You must sell at a much lower price. You must sell at a much higher price. I'm not sure this would stand up well in even a lower level court. Most shops could not afford to fight Cervelo on something like this, but all it takes is one person who can afford to, for whatever reason.
The above, combined with, even just the appearance, that Cervelo pushed this deal out there to reduce their inventory, in light of the PON deal, probably would not be seen favorably in a legal setting, either. That would be my concern if I was the one trying to make that deal happen. It really is an interesting situation that Cervelo has created.