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Tesla Faces Tough Regulatory Hurdle From State Dealership Laws

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  • by Anonymous Coward on Thursday June 27, 2013 @06:39PM (#44127487)

    I think we've just figured out what the next big thing is. Mercantilism should have disappeared centuries ago.

    • by peragrin (659227) on Thursday June 27, 2013 @07:21PM (#44127797)

      Three things,

      Middlemen don't like being cut out. those that try find themselves cut.

      Manufacturers, factories, etc don't want the headaches of dealing with uniformed idiots. Ever work a computer Hell desk? yea that has been going on for as long as we have had machines. The average person is barely above being an idiot and half the population is dumber than they are. I have explained the same thing to the same person 30 times in the last 3 months she still doesn't get it. She can't open her mind up to possibilities other than what she already knows.

      Lastly, Middlemen provide slack, and options for the supply chain. In today's tight supply chains they are even more important than ever. As if the factory doesn't have your part your stuck unless your lucky enough to have a middleman with extra.

      • by ShanghaiBill (739463) on Thursday June 27, 2013 @07:31PM (#44127909)

        Manufacturers, factories, etc don't want the headaches of dealing with uniformed idiots.

        If manufacturers don't want to deal directly, they why do we need laws prohibiting them from doing so?

        Middlemen provide slack, and options for the supply chain.

        If middlemen really added value, then customers would be willing to pay for that value, without government coercion.

        • by Shavano (2541114) on Thursday June 27, 2013 @07:54PM (#44128067)
          The manufacturers of other cars have to sell through dealers because of these laws, and they don't want Tesla to have an advantage, and the existing dealers want a chance to become dealers for Tesla so they can get a share of that action.
          • by countvlad (666933) on Thursday June 27, 2013 @09:59PM (#44128753)

            So the argument against removing the laws (for all auto manufacturers) and making the dealers "sell" themselves to the auto manufacturers is what exactly? That dealerships lobbied really, really hard to sell you a product that they add no value to? Can you say "crony capitalism"?

          • by cdrudge (68377)

            The manufacturers of other cars have to sell through dealers because of these laws, and they don't want Tesla to have an advantage

            Do manufacturers of other cars have to sell through dealers because of the laws? Or did dealers get these laws passed so manufacturers have to sell through them? One way could be interpreted as dealers just wanting to have a level playing field. The other way could be interpreted as dealers protecting themselves from competitive alternative business models.

        • If middlemen really added value, then customers would be willing to pay for that value, without government coercion.

          Well, there are middlemen that add value, but they're not typical auto dealerships. They're facilitators that help you locate the car you're looking for. Many of them have agreements with dealerships that will get you the best price or near it without having to dicker, and you only pay a [relatively] small commission to the "dealer" that you're actually dealing with. This only really makes sense when buying a fairly new vehicle, otherwise the commission can be disproportionate. Of course, their value would fall without this sort of protectionist nonsense.

      • by jxander (2605655) on Thursday June 27, 2013 @07:44PM (#44127995)

        So, why not allow the option of middlemen, and the option of direct sales. If what you say is true then middle men will foster a better experience, capitalism will prevail, and companies dependent on direct sales will falter.

        Right?

      • by Sponge Bath (413667) on Thursday June 27, 2013 @07:59PM (#44128099)

        The average person is barely above being an idiot...

        I admire your optimism.

        • by djhertz (322457)

          Half of all people score in the lower 50% of intelligent tests.

          • by Sentrion (964745)

            I thought No Child Left Behind was supposed to fix that.

      • by tlhIngan (30335) <slashdot AT worf DOT net> on Friday June 28, 2013 @01:14AM (#44129641)

        Don't forget another reason for resellers - manufacturers don't want to deal with 1 piece orders constantly - it's way too much overhead for them. It's cheaper for them to sell 100 units to one person, then that person to sell it to 100 people, than for the manufacturer to sell to those 100 people.

        Also, resellers can handle warranty issues locally - manufacturers then can deal with the reseller to handle it - e.g., the reseller can exchange 5 units to customers, then the manufacturer can send 5 extra units as replacements. Less overhead for the manufacturer, and local sellers may know their market better.

        There are exceptions - like Apple, who can handle it all vertically, but they tend to be the exception. Even then their ordering systems aren't as slick as say, Amazon's.

        • by nedlohs (1335013) on Friday June 28, 2013 @09:12AM (#44131421)

          In which case you don't need a law preventing manufacturers from doing so - they'll use resellers because it is cheaper/better for them. That there is such a law is usually evidence (not proof, there are other possible explanations) that manfacturers do in fact want to sell directly. If no one wanted to speed we wouldn't need speed limit laws after all.

        • Don't forget another reason for resellers - manufacturers don't want to deal with 1 piece orders constantly - it's way too much overhead for them. It's cheaper for them to sell 100 units to one person, then that person to sell it to 100 people, than for the manufacturer to sell to those 100 people.

          That used to be true. Nowadays there's this thing called "the internet." Maybe you've heard of it?

          Also, resellers can handle warranty issues locally - manufacturers then can deal with the reseller to handle it -

      • by Attila Dimedici (1036002) on Friday June 28, 2013 @08:34AM (#44131169)
        There is nothing wrong with the points you make. They are all good points. However, none of them is an argument that supports laws requiring a company to use middlemen.
    • by s.petry (762400)
      It's not just the middleman in this case, though I agree with your comments regarding mercantilism. The beginning points to numerous aspects acting as Cartels. Unions became cartels, franchises became cartels, and executives became cartels. When everyone is a criminal, things never end up well.
  • by Raistlin77 (754120) on Thursday June 27, 2013 @06:40PM (#44127491)
    Now? The petition has been up since June 5th. I guess this is a last ditch effort to get signatures as it's over 44K short.
    • Typo... 74K short. Although now it's only 72K short, seems it's working...
      • by ackthpt (218170) on Thursday June 27, 2013 @07:27PM (#44127855) Homepage Journal

        Typo... 74K short. Although now it's only 72K short, seems it's working...

        If there's one thing business can't stand it's competition - given that the Big 3 conspired to kill the Tucker, you have some idea where the original legislation found its roots and monetary $upport (when it came to buying votes to pass the original bill). Every business would love to be a monopoly, barring that, they settle for an oligarchy.

        • by multimediavt (965608) on Thursday June 27, 2013 @08:33PM (#44128327)

          Please Mod the parent up. He's the only one that got the Tucker reference to where the laws originally came from.

          Laws that protect auto dealerships aren't newly created for Tesla, though ...

          Nope, a lot of them were created to kill Tucker in the late-1940s. Luckily, Elon has a few other hits to back him up so even if the automotive industry quashes Tesla's dreams he's still got rockets and Paypal.

    • It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.
      • by fuzzyfuzzyfungus (1223518) on Thursday June 27, 2013 @06:58PM (#44127603) Journal

        It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.

        I'd be the first to agree that the feds(the executive branch, no less, get your fucking civics in order, people...) are the wrong place to go; but I'd bet a nontrivial amount of money that the Interestate Commerce Clause is 'elastic' enough to handle this one, if Congress felt like it.

        It would be bad form, and strikes me as unlikely to happen; but I suspect that if the feds felt like trying, they'd probably get jurisdiction.

      • by OverlordQ (264228)

        > It doesn't really matter since the federal government doesn't have jurisdiction anyway.

        Ahahahahahah, they've invoke the Commerce Clause for less.

      • by msauve (701917)
        "It doesn't really matter since the federal government doesn't have jurisdiction anyway."

        Because selling cars manufactured in another state isn't interstate commerce? Hell, growing your own vegetables for your own consumption has been ruled to be interstate commerce.
      • by Shadow99_1 (86250)

        Well using the all mighty interstate commerce clause, this could be considered a federal matter as it bans a company from one state selling in another. I mean one group in one state selling to people in another is sort of the root of 'interstate commerce'.

        I believe this is why saturn has no dealerships in my state, but they do in Ohio (next door). Though I've never actually heard that we have such a law in place.

        • Except that the Supreme Court has ruled otherwise such as Exxon Corp v. Maryland [wikipedia.org].

          • by msauve (701917)
            You're under the mistaken assumption that SC rulings follow any sort of logic. They can say "red is green," and it's the law. And they have.
            • by Darinbob (1142669)

              They certainly do have logic. That's why they write their lengthy opinions so that they can explain their logic. And in this Exxon case they did give reasons why this law did not violate existing federal laws.

              • by msauve (701917) on Thursday June 27, 2013 @09:35PM (#44128649)
                You're definition of "logic" differs from common sense. The Constitution wasn't written to be subject to interpretation by arcane legal rules, but by citizens.

                The SC has ruled that people aren't citizens because of the color of their skin (Dred Scott), that corporations are (Citizens United), and that personal crops are interstate commerce (Wickard v. Filburn). None of which stand up to plain reading or common sense.

                The Supremes are in contempt of simple logic and common sense. They're illogical - as political as the Legislative and Executive.

                The SC is the biggest flaw in our system - it should have consisted of a rotating chamber of state justices to provide a true "check and balance." The Feds deciding what the Feds can do is ludicrous.
                • by blindseer (891256)

                  I agree with you generally here. I find the flaw lies in the amendment that had US senators elected by popular vote. The Senate was intended to be a body representing the state governments, a check on federal power in favor of states' rights. If US senators were appointed by state legislatures, as the Constitution originally intended, we'd effectively have a rotating chamber of state justices. Any appointment to SCOTUS has to get past the Senate, the Senate can choose to only appoint those people that a

          • Except that the ban on shipping cars direct to customers would apply to both Tesla, as well as out of state car dealerships if for some bizarre reason you bought a car from said dealership and wanted it shipped to you. Operating a dealership also adds a large surcharge on the item in question. As such, it violates 3 and 4 of the majority holding.

            • by lgw (121541) on Thursday June 27, 2013 @08:02PM (#44128123) Journal

              As someone who has actually bought a car from an out-of-state dealership and had it sent to me, I can say that not only is it legal, but that states have special forms of registration just for this purpose (I still paid registration fees in the state the car was shipped from, but they were very small and accompanied by a warning that'd I'd owe a fine if I tried to register the car in that state within a year).

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.

        Well...a petition to the White House is ridiculous. However, I can see you'd be able to challenge the law in a Federal Court. Tesla manufactures its cars in California, and when I buy one online, I'm buying it from California, where it's a perfectly legal sale. Then they're delivering the car, which is already mine and fully paid for, to me in NC. Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in. That's definitely in the federal gov

        • by khallow (566160)

          Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in.

          I think this alone would be enough to overturn such state laws in federal court. One doesn't need the other branches of the federal government to interfere.

        • by Darinbob (1142669)

          Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in.

          There's no actual law that prohibits interference with all types of interstate commerce by the states. The constitution gives the federal government authority to create laws regulating interstate commerce but that does not preclude states having their own laws commerce with its neighbors as long as these do not conflict with federal laws.

          Or at least this is the interpretation of the interstate commerce clause that the supreme court has been upholding for a very long time. The "Dormant Commerce Clause" doc

      • by jklovanc (1603149)

        Blue laws say that no one can do certain things on certain days. What dealership laws say is that one must have a dealership relationship with the manufacturer to sell new vehicles. The difference being that blue laws effect everyone while dealership laws only effect non-dealer sellers. It is very different and probably does fall under the Commerce Clause.

      • by jklovanc (1603149)

        I just noticed something that makes it definitely a Commerce Clause issue. Basically some one out of state can not sell a new car to some one in state. That is easily restraint of interstate trade. I wonder if there is any other product restrained that way.

    • by Shavano (2541114)
      I think he's going to say it's not Congress's business what restrictions a state puts on their sales outlets.
  • Protectionism... (Score:4, Insightful)

    by ackthpt (218170) on Thursday June 27, 2013 @06:42PM (#44127513) Homepage Journal

    I've seen your face before .. back when Michigan fought Japan through legislation in Washington DC. How have you been? I see you are on the rise again as people pretend you're their last, best hope.

  • by MoFoQ (584566) on Thursday June 27, 2013 @06:47PM (#44127539)

    Tesla victory in NC [engadget.com]

    go figure...once they go on test drive....they love it.

  • Interesting that his spawned a grassroots We The People petition. I don't see how most people have a horse in this race right now.
    • by NoNonAlphaCharsHere (2201864) on Thursday June 27, 2013 @07:01PM (#44127627)
      There are two kinds of people in my town: those who work at car dealerships, and those who would rather go to the dentist than shop for a new car.
      • by anagama (611277)

        Count me in the latter group (except I kinda like going to the dentist) -- you're typically way better off getting a newish used car off Craigslist where someone else has paid the "I drove it off the lot instantaneous depreciation" cost. All you pay for is the car that way.

    • by amicusNYCL (1538833) on Thursday June 27, 2013 @07:05PM (#44127663)

      There are plenty of people who would like to purchase a Tesla if they had the means, and Tesla has lower-priced cars on their roadmap. Just because this wouldn't affect someone right now doesn't mean they shouldn't support it for when they need it. It's the "first they came for X, but I said nothing" scenario. Just because you're driving a gas car now doesn't mean you shouldn't support Tesla or any other EV maker. I'm sure the various auto dealer associations would love to get a bunch of laws passed in their favor before Tesla releases their lower-priced models in a few years. If you don't want to see that happen, then now is the time to speak up.

    • by techno-vampire (666512) on Thursday June 27, 2013 @07:19PM (#44127773) Homepage
      Just because I'm not interested in buying an electric car (and don't live in one of the states affected by this) doesn't mean that I don't have a horse in this race. What's at stake here is the ability of ordinary people to buy whatever brand they want even if the only way they can do so is by going directly to the manufacturer. Being required to go through a dealership is a form of restraint of trade, and when the merchandise comes from another state, that makes it interstate commerce. Everybody who's concerned with the rate at which the current administration is eroding our rights has a horse in this race, not just those who want to buy a Tesla car.
    • by drinkypoo (153816)

      I don't see how most people have a horse in this race right now.

      Everyone who is paying attention has a horse in this race. Unless you support the notion that states should promote unconstitutional restraint of interstate trade as well as economic protectionism which harms consumers, you should oppose laws which require cars to be sold through dealerships.

  • Impossible! (Score:5, Funny)

    by sphealey (2855) on Thursday June 27, 2013 @07:09PM (#44127693)

    Impossible! North Carolina and Arizona, at least, are libertarian paradises - very "business friendly" - that would _never_ pass legislation interfering with markets or freedom to contract. Never! There must be some misunderstanding.

    sPh

  • by Greyfox (87712) on Thursday June 27, 2013 @07:14PM (#44127731) Homepage Journal
    Tesla can't sell them directly to consumers on their web page? Since that'd be interstate commerce and all, and states can't regulate that...

    If they want to be really cool about it, they could have someplace you could deposit $50000 worth of bitcoins and have the car delivered directly to your doorstep.

  • I'm sorry, this may sound stupid, but can anyone point me to directions where I can find something about WHY this is the case? I.e. why is it forbidden for car manufacturers in the US to sell cars directly to consumers?

    I'm not native, so I don't know and it sounds outlandish for. The TFA has a link but the text there is awful to read, so any help really appreciated.

    Thanks
    a former European

    • by Spy Handler (822350) on Thursday June 27, 2013 @07:49PM (#44128037) Homepage Journal

      It's not forbidden in the U.S. by the national (federal) government. Some local (state) governments do forbid it to protect a class of people called "car dealers".

      Why you ask? Same reason the British forbid Indians from making their own salt: to protect the profits of a certain group. It's not unique to the U.S., I'm sure it happens all over the world. Is it fair? No it isn't.

      • by ImdatS (958642) on Thursday June 27, 2013 @08:07PM (#44128153) Homepage

        Thanks for the answer.

        I probably was not accurate enough in my question. Question was rather "how this happened and still happens..."

        Now, a little search provides a really good link I found: http://www.justice.gov/atr/public/eag/246374.htm [justice.gov]

        I thought there was a real reason historically but it just seems that car dealers effectively lobbied their state governments to introduce these "Franchise Laws" after they were established. And it was in order to "... protect their investment in real estate and showrooms, etc..." - So, as you said, the traditional protectionist malaise as everywhere (reminds me of the stupid solar industry in Europe which actually managed to convince the EU Commission to introduce tariffs on Chinese solar panels... up to 67% ... now the Chinese are striking back with tariffs on European products *sigh* - will this never end?)

        • I thought there was a real reason historically but it just seems that car dealers effectively lobbied their state governments to introduce these "Franchise Laws" after they were established

          Because then, as now, car dealers are businessmen. And hang out with the lawmakers.
          Or are actual lawmakers themselves. Like Scott Rigell in Virginia. Who owns Freedom Ford. Do you really think he would craft laws that challenge the car dealer status quo? Not likely.
      • by Smauler (915644)

        I'm really confused by this... Europe is constantly being lambasted by some in America about the consumer protection laws restricting free capitalism. These kind of laws seem the antithesis of free capitalism - they're designed to keep the local rich rich. I don't see their purpose, at all.

        This kind of law wouldn't last 5 minutes in the UK, let alone the rest of Europe. The salt tax on India is getting on for a century since it was repealed, prior to independence.

    • Rentseeking (Score:5, Informative)

      by cervesaebraciator (2352888) on Thursday June 27, 2013 @08:05PM (#44128141)
      There once was a reason for laws such as this to exist on the local level. Whether one thinks it a good reason, I leave to the individual judgement. Here's an excerpt from an article [theamerica...vative.com] that explains succinctly:

      While auto-dealership laws go back to the ’20s and ’30s, the dealers’ nationwide legal grip on selling cars was established by state legislatures in the postwar era out of concern that the Big Three would establish networks of their own dealers. It was a time haunted by bigness, as Americans stared at the giant corporations that had swelled to dominate the economic landscape and feared that consumers would soon become subject to whatever whims the companies cared to impose on them. Smaller businesses feared General Motors, General Electric, and the rest of corporate America for the same reason those companies could promise a lifetime of employment followed by a generous pension: they seemed immortal. As Kenneth Elzinga of UVA explained recently at an ISI Faculty Seminar, there was a palpable fear that big companies would slash their prices below cost until all their smaller competitors were driven out, and then, having the market to themselves, they would dramatically raise prices.

      For the auto industry this was particularly feared, as 1950s cars were, compared to today, terribly unreliable. The state antitrust laws that prohibited manufacturers from selling direct also set limits on entry and exit in order to ensure that a car company could not decide a region to be undesirable and just pull up stakes, leaving the customers they had sold long-term products to without a source of spare parts or service. Legislators feared that allowing manufacturers to set up their own dealerships would make the communities subject to the whims of the latest Detroit strategy document, so they sought to break up the process. With independent dealers, states hoped to insulate themselves from concentrated corporate power and force it to serve their communities if it wanted to sell to them.

      Thus the laws were originally intended to protect consumers on the local level. Now, especially in the face of subversive business models like Tesla's, matters have changed. Local dealers are in closer league with manufacturers, the latter often even providing financing for purchases [wikipedia.org]. The arrangement is mutually beneficial: manufacturers can prevent upstarts like Tesla from getting a foothold in the market; dealers, acting as middle-men, can reap the rich benefits of rentseeking [wikipedia.org] through powerful lobbies targeted toward state governments. N.b., however, this arrangement does not prevail in all states.

      • by ImdatS (958642)

        Thank you very much for this great explanation. Now I understand.

        So, in fact, what is happening now is exactly what these laws were meant to prevent - e.g. with regards to Tesla Motors. I have experienced these unwanted side effects every time any government tried to regulate an industry with very specific laws with the intent of protecting one group of people from another... be it consumers against Big Business or one side of business against another.

        Thanks again, this helped me understand the history of t

      • I also occurs to me to note that a similarly vestigial system also remains in place in the form of the three-tier system of alcohol distribution [wikipedia.org]. Major producers of alcoholic beverages cannot sell directly to retailers or to the public in the U.S. (brew pubs and the like excluded, and there are many other state-level exceptions). Rather producers sell to wholesale distributors who, in turn, are allowed to sell to retailers. I needn't add, I am sure, that this makes for many taxation opportunities and this m

      • by drinkypoo (153816)

        With independent dealers, states hoped to insulate themselves from concentrated corporate power and force it to serve their communities if it wanted to sell to them.

        Of course, all of that is a lot of bullshit, because dealers were never actually independent. They still had to form relationships with manufacturers, and they couldn't just force the manufacturers to sell them cars for resale. Therefore the manufacturers still wound up tightly coupled to the dealerships. As time has gone by, more and more special-purpose, maker-specific tools have crept into use (you can work on cars from the fifties and sixties with pretty much only generic tools; try that on cars from th

    • by cranky_chemist (1592441) on Thursday June 27, 2013 @09:09PM (#44128521)

      For anyone interested, NPR's Planet Money team ran a very good story back in February on this topic. If focused on the entrepreneur behind carsdirect.com, who ran into the same obstacles in the 90s when he tried to set up a Web site to sell cars directly to consumers.

      http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes [npr.org]

  • by angrytuna (599871) on Thursday June 27, 2013 @07:39PM (#44127963)
    Planet Money did a great piece [npr.org] on dealership laws awhile back, talking about a startup that wanted to sell cars directly, and how insurmountable the obstacles they faced ended up being.
  • by AaronW (33736) on Thursday June 27, 2013 @10:01PM (#44128767) Homepage

    Having purchased a Tesla Model S the experience is the exact opposite of when I purchased a Toyota. Tesla's showrooms do not sell cars. They show them. When I went to the showroom I could ask questions without any pressure to buy the car. The only way to buy a Tesla is on their web site so there's no sales critters trying to get a commission. There are a myriad of options to choose from which allows you to get the exact car you want. I got the paint color, interior color and all the options I wanted. It went to the point where I chose the wheel colors and whether or not to have a rear carbon fiber spoiler (I chose not to). There's also no haggling over price. Tesla basically builds to order without having to deal with an inventory of cars. You order your car and they deliver exactly what you ordered, or in my case I picked mine up at the factory and took the tour.

    At the Toyota dealership I didn't have much choice. I could choose any car as long as it was on their lot, plus there's the high pressure sales. The only thing worse than one of their car salesmen is a used car salesman (which they also sell there).

    Dealerships don't really protect the consumer. As far as I'm concerned, they're leeches. A relative of mine bought a Fisker Karma and the dealerships are basically helpless since Fisker is more or less bankrupt in all but name. The warranty is basically worthless as is any pre-paid service and parts are unavailable. Since Fisker laid off their engineers even support is limited even if paid by the owner. The dealership my relative goes to is better than many. Many dealerships completely dropped any and all support for Fisker so the owners are completely SOL. There's nobody to even perform routine service on the vehicles.

    I groan every time I have to have something fixed that's not under warranty at Toyota. They charge a premium for the service since they know that with a Prius you're unlikely to take it elsewhere.

    Dealerships also wouldn't make nearly as much profit on service either. Tesla has vowed to not make a profit on service, but then again, service should be a lot simpler than a gasoline powered car. There's no transmission to service or wear out, only a simple gear reduction. There's no 5K mile oil changes, the motor is lubricated for 12 years. There's no fuel pumps or spark plugs to replace.

    Since the number of cars sold is fairly low, a dealership would also be selling o

    Tesla service consists of a 12,500 mile inspection, replacing the wiper blades and brake pads if needed (brake pads should last basically forever), rotate the tires, replace the cabin air filter and possibly flush the coolant. Service also may include hardware upgrades, software upgrades are distributed over 3G and can be applied by the owner whenever it's convenient.

    Tesla has vowed to not make a profit on service. When I broke one of the clips on my roof they had to replace the entire panel next to the glass sunroof. If the panel were on my Prius, the dealership would probably charge $200-300 just for a replacement panel plus a fortune in labor. Tesla charged me $100 and $175 labor to replace it, which after explaining what they had to do to replace it was a bargain.

    Things are quite different now than they were in the 1950.

  • Middlemen everywhere (Score:3, Interesting)

    by sylivin (2964093) on Friday June 28, 2013 @08:33AM (#44131165)
    As a bit of a counterpoint, remember that we use middlemen *everywhere.* Amazon, Walmart, grocery stores, department stores... the list goes on and on. Damn near every single business we buy from is a middleman.

    Usually it is in our best interest to go through a middleman as it ends up with savings for everyone. The middleman usually buys in bulk (thousands of items) and then sells to us (1 at a time) at a markup. The manufacturer gets the benefit of a steady, predictable cash flow while we get the convenience of buying one at a time.

    Of course, that's how it usually works. Not everyone wants that though. In today's connected world we can pay a premium straight from the manufacturer for items custom created directly for what we need. Cars, as large capital investments for most people, are a perfect example of this - especially as the "premium" is usually the same price that you would be charged from the middleman anyway. For middlemen to survive they need to provide a "value added" effect to the merchandise and I do not see that happening with most car dealerships.

    tl;dr version: You use middlemen every day, usually love it, but if they don't provide extra value they shouldn't exist.

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