By on May 26, 2014

bigboxstore

Car dealerships.

Auto parts stores.

Repair shops.

Tire centers.

How many of these places will be needed 10 years from now?

 

Car dealerships have a triple whammy coming straight at their bottom line.

An adversary in the form of Tesla, who has the monetary means to fight a legal war with the strong support of the general public.

A move toward car-sharing services at all levels of society. Right now this is at its early stages. However, in the long run, these services will continue to drive down the value proposition of buying and maintaining a new car.

Finally, the times are a-changin’. It’s no secret that young consumers in particular would strongly prefer to buy a new vehicle online instead of going through the four-square game and the interminable waits at a new car dealership.

If an automaker can legally offer direct sales and convenient test drive facilities without the traditional hassles of buying a car, they would likely get a big chunk of this market.  Tesla is now the sole pursuer of this sales channel. But, if they manage to break through the litigious minefield, a lot of overseas manufacturers may decide that direct sales to the American public offers a far better business model than the dealer as an intermediary. If that happens, you will start to see some of the smaller manufacturers band together and offer direct sales channels in parts of the country where a stand-alone dealership doesn’t make sense.

The big box model of retailing is already experiencing a consolidation throughout many industries. Toys, office supplies and books have already become the domain of online stores. Inevitably, the auto franchise dealer model will become one of those casualties if the manufacturers can’t co-develop new retail models that better serve the consumer.

Brick and mortar auto parts stores will also find their traditional markets in a tailspin. It will likely happen in a far shorter period of time than the legally protected franchise dealer. The big issue for auto parts stores is that they can only differentiate themselves based on convenience.

If you need the part right now, you go to the parts store. But if you can wait, there is Rockauto, Partsgeek, Car-part, and countless other online merchants on Ebay and beyond who will get you what you need for a far lower price. 

Someday soon, these evolving online auto parts entities, along with Amazon, will offer you the same convenience as a big box store. They probably won’t be open to walk-in public traffic. But in a world where online orders are discounted 30% to 40%, the need to have expensive real estate in a well-traveled area is becoming far harder to justify. There will be a shakeout in this industry that will be akin to what office supply stores are experiencing right now. If Amazon and everyone else can fulfill the delivery of a car part to you within 24 hours, the value of that big box in a retail setting goes down considerably.

Repair shops and tire centers have a different issue. Their customer’s financial resources.  I contract out nearly all of my work to independent shops these days, and nearly all of them are having to locate financial institutions to help pay for the repair cost of their poorest customers. Title pawns are becoming the monetary source for financing these repair costs with interest rates that are between 10% and 25%… a month. For the struggling consumer with decent credit, auto repair franchises such as Firestone or Pep Boys are pushing credit cards whenever possible. The local manager of one of these shops recently told me that a little over 1 in 10 of their transactions requires a brand new company credit card to complete. Two years ago that was barely three percent of their business.

I am going to be brutally blunt. In the next 10 years the online world will overtake the big box model. This will not only change what you buy, but also how you use cars in your daily life. Like many of you, I can easily see a time when automakers will use subsidiaries and partners to become providers of automotive transportation services in those places where the population can sustain it. Auto parts stores, tire centers, repair shops, new car dealerships, and even insurance companies will not be needed by the majority of the population. The car will be able to drive itself and the maintenance will be done in-house. The driving regimen will be designed primarily for long-term cost savings, and most folks will simply use an app that allows them to pick whatever transportation service best suits them at a price that will vary depending on demand and their willingness to let other consumers share the cost of transportation.

Consumers will win. Manufacturers will use other companies to become transportation service providers, and no one will miss those big boxes.

Nobody.

 

 

 

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112 Comments on “Question Of The Day: Will Big Box Auto Retailers Survive?...”


  • avatar
    catachanninja

    I would imagine the people they employ will miss them. That’s the terrifying part of all this automation and reduction

    • 0 avatar

      If not for automation we wouldn’t have the auto industry we have today. Auto assembly is already highly automated. Arguably, Henry Ford’s assembly line innovation with the Model T, although involving humans in assembly, was the first salvo of the automation war.

      What has it done? Made automobiles affordable. This will make them even moreso, the same way automation has affected countless other industries. Prices will drop, and consumers will benefit.

      You’re right that there’s a short-term price to be paid, but people can and do move to other industries. Two centuries ago the vast majority of people worked in agriculture. Now because of automation and mechanization, relatively few people do and instead, money has been freed up in the economy from food purchasing to goods and services purchasing. The jobs shifted there instead.

    • 0 avatar
      alsorl

      It’s called http://www.truecar.com They will shut down many auto dealers big and small. The auto makers will still need a place to service and showcase there products.

      • 0 avatar

        True car does get you to a bottom line price, but dealerships pay to use it. We can still make money on financing and on selling your trade even if we are near a break even price to sell you the new car.

    • 0 avatar
      thornmark

      Disintermediation.

  • avatar
    eggsalad

    I think you may have missed one point. Those indie garages you favor need a source of parts *right now* – and one that delivers. The shop can’t afford to wait 2 days for stuff to arrive from Rock Auto, nor do they want to waste the tech’s time running to stores for parts.

    For the likes of NAPA, CarQuest, and a few other nationwide chains, their bread-and-butter isn’t the individual who needs a set of brake pads today, but the shop owner who will spend $1000+ per week on parts for their customers’ cars.

    • 0 avatar
      Scoutdude

      Yup that is how Napa and Carquest make their money the wholesale trade. O’really and Autozoo are trying to horn in on that market too.

      • 0 avatar
        SoCalMikester

        ive found generally autozone parts dont have the same quality as NAPA, since NAPAs business depends on small shops that dont want customer returns

        • 0 avatar
          fiasco

          I don’t think I’ve EVER had a Rock Auto order that didn’t come without either the wrong or a defective part…and by the time you pay return shipping on anything it’s not worth the effort on small stuff, so I find the online experience less than acceptable.

          Unfortunately NAPA has started to slide into the OtterZone realm with parts quality, while still maintaining a premium price. O’Really bought out the biggest regional AutoZone competitor a few months ago, we’ll see how that goes (actually seems to have improved).

          I like going into the local jobber stores (regional chains like Robbins or Sanel, I really miss a local independent shop in the town I used to live in, except for the fact that I’d NEVER get out in less than an hour because the guy liked to chat), but more often than not I’ve found the convenience of figuring out who has what [probably] on the shelf RIGHT NOW online at the Advance or AutoZone is easier than waiting a day or two for the jobber shop, especially now that I have a “regular” job.

          The online guys will take over the “project” car market, but when the CV joint decides to self-destruct and you need to get to work in the morning, you can’t beat a bricks and mortar store.

          • 0 avatar
            golden2husky

            I have to disagree with you on RockAuto. They have consistently delivered exactly what I ordered, and have handled returns courteously. I even had some parts well past the return date, and they took them back, albeit for credit. No questions asked.

            Hopefully the big box purge will not include Home Depot and Lowes. I’m happy to do without the mom and pop hardware store where the help follows you like you are a thief. Goodbye and good riddance to operations like that.

    • 0 avatar
      pragmatist

      Don’t underestimate the importance of the walk in store to the back yard mechanic either. Often you get into a job, discover you need something, and having someone who has it right now is very valuable.

      When I start a job, I usually want to get it done as quickly as possible. Frankly the savings of a few bucks on parts online is often not worth the wasted time.

  • avatar
    mor2bz

    Stupid me, I just ordered the wrong struts for my Camry. I got the cartridge, rebuildable ones instead of the sealed jobs from Rockauto. It never occurred to me that there could be two types for one make, model, and year. They will not accept the return of the struts, just the whole kit incl. the mounts and bellows. The sealed struts cost more, and the other parts cost a lot more separately. I would be reordering the same parts
    I have for the mounts and bellows for the different shocks. There is no human override for the magic computer to accept the return of the struts themselves.

    were I to have talked with an actual human being, I probably would have got the right parts. And I could have, but they encourage one to use the online catalog . I didn’t know I had a question until I had received the parts. Do not pass go, do not collect two hundred dollars.

    • 0 avatar
      Elena

      I believe you’re overestimating the role of human beings. I regularly buy oil filters in local part stores. Once trusted the human, got the wrong filter. Now order online and pick up in store. An Autozone clerk tried to push me to buy different transmission fluid saying my truck needed Mercon, not ATF (her jaw dropped when I explained ATF stands for Automatic Transmission Fluid). Every time I’m forced to deal with humans weird errors pop up. Once bank teller deposited money in a different account (writing over what I wrote in deposit slip) because she thought I was making a mistake, ended with a huge fee and unpaid wages (deposit was for CompuPay). Getting them to undo that took a week, talking to more humans (with an attitude) and the bank lost all 3 accounts. Computers are not perfect, but way more reliable than humans and at the very least you don’t have to deal with their ego, and their supervisor’s… I’d rather deal with nothing but computers and I’m not young at all (almost 50).

      • 0 avatar
        George B

        I’ve had weird human error problems where the person at the counter at NAPA doesn’t see all the part options for a particular car on their computer search results. The consumer on-line search is rather cumbersome to use, but it seems to be accurate. Luckily both the salesperson and myself are pretty calm and, in the end, I left with the parts I wanted. If either one of us had been hot headed, NAPA would have lost a sale.

  • avatar

    “They’ve” been predicting the death of big-box marts like Best Buy, GameStop and Sears for a very long time.

    Truth is that these stores usually specialize in merchandise that other stores either don’t specialize in or they have loss prevention departments that specialize in protecting items that most other stores don’t. Therefore they are able to survive based on filling a niche the others do not.

    The winner from all of this competition is the consumer. The loser is the profitability of the store and the salary of the worker.

    • 0 avatar
      jimbob457

      @bigtruckseriesreview
      “They’ve” been predicting the death of big-box marts like Best Buy, GameStop and Sears for a very long time.

      Curious you have chosen to mention three companies hell bound for extinction. Was this irony on your part? Granted, the reasons for their bankruptcies may be partly unrelated to this particular discussion. Even so, competition from online sales is probably been a factor.

      • 0 avatar

        I used to think online sales would crush those stores but, sometimes, I don’t feel like waiting and I WANT “IT” NOW!

      • 0 avatar
        NoGoYo

        As a Kmart retail drone who hates his job, I await the death of Sears Holdings Corporation with open arms.

        • 0 avatar
          Pinzgauer

          Prepare to wait for a long time. They had already been predicting the death of Sears for years when I worked there in the late 90′s/early 2000′s, but alas like the weed in your lawn you cannot kill, they continue to exist. And that will not change any time soon. I cant understand it, but that’s how it is.

          • 0 avatar
            NoGoYo

            I see the investments in better online sales and shipping products not found in stores to customers’ homes as preparation for when brick and mortar retail operations stop being profitable, honestly.

            There doesn’t seem to be any investment in the stores by corporate any more, pretty much all of the infrastructure in the store I work in has been there since 1998 and is really showing its age, especially the noisy and ineffective AC system and frequently crashing cash registers.

    • 0 avatar
      alsorl

      truecar.com may put a dent in many dealers big and small. Including the mega dealers that are already failing.

      • 0 avatar
        87 Morgan

        Which mega dealers are failing?

        Seems to me the large auto groups are gobbling up the mom and pop single point stores at a frenzied pace, and paying cash in most instances.

  • avatar

    “The car will be able to drive itself and the maintenance will be done in-house. ”

    The automated car will come a day after the flying car becomes a reality.

    • 0 avatar

      The self-driving car will happen within 7 years… IF the legislators and regulators let it happen. The technological problems are known, and being solved.

      • 0 avatar
        pragmatist

        Right after they solve artificial intelligence (with common sense)

        The problem is that the devil is in the details, and those details don’t lend themselves to algorithmic approaches.

        Actual real world driving (as opposed to automatic driver supplement) conditions with millions of cars and almost unlimited situations are FAR from being solved, pipe dreams notwithstanding.

        • 0 avatar

          If I can’t push a button or “tell” the car to go get an oil change…then it’s not a “self driving car”.

          In fact, like the movie iRobot, the car should be able to drive to an automated garage WHEN CALLED BY THE OVERARCHING AI – for its oil change and for its fluid refills.

      • 0 avatar
        mcs

        The self-driving car may be somewhat close, but for a fully autonomous car, there is a lot of work that needs to be done – especially in the area of intuitive AI. I’ve co-designed an aviation collision avoidance system and even in that sanitized environment, there were lots of little issues that cropped up. It’s not easy.

        When we do get self-driving cars, the human operator will be required by law to take over in an instant if something goes wrong (just take a look at the legislation so far). So, it will be like letting a new teenage driver take the wheel, except you might not be able to trust it as much and you have full responsibility. Texting and using your phone will still be prohibited.

        If your self-driving car hits and kills someone, you will be the one to go to jail for manslaughter because you were supposed to take over if something went wrong. Again, take a look at the legislation in California and other states where it has been enacted.

  • avatar

    I must respectfully disagree in regards to auto parts stores for the reasons stated above, i.e. wholesale and personal interaction/assurance you’re getting the right part.

    As far as Tesla, I still don’t understand how they take in trades and some of the backend dealer stuff.

    • 0 avatar
      Elena

      Again, my perception of auto parts stores employees is they know nothing. Looking for a tail light bulb guy tried to sell me headlights (3157 bulb and he said I needed 9007). Same goes on at Home Depot and Lowe’s with stuff as simple as mirror hangers. Don’t ever never tell them what you’re looking for if you happen to be shopping the Electrical aisle: you’ll waste your time explaining what it is, why you need it, why this right there is not a choice, giving them the SKU and they’ll direct you to cleaning supplies after checking the store app… Online inventory shows 168 but you’re told they never carried that product, look for another store.

    • 0 avatar
      Delta9A1

      Here in Vancouver, Tesla handles trade-in business by working with a few local dealer chains who issue “bids” for the vehicle being traded in. Seems like a better option than getting one offer from the dealer you are buying from. Probably helps that people are trading in late-model luxury cars when they are buying a $100K electric car.

  • avatar
    Lorenzo

    All four, including dealerships, will survive. But as parts stores have shown, there’s a lot of consolidation coming, and that will be wrenching for dealerships, and the floor plan model with manufacturers. I wouldn’t be surprised to see mega-dealerships with the heft to negotiate with several automakers to supply particular models that sell, and refuse to be tied to one maker and its brands.

  • avatar
    danio3834

    I don’t see the local auto parts stores going away completely. The proliferation of online orders may thin the most retail dependent, but as already mentioned, the wholesalers with a counter will still be around.

    As for the online distributor warehouses, there’s no reason why they couldn’t also be open to the public. Summit Racing has one of the best online sales models around, but you can still walk into the place and deal with them face to face. You just have to go to them which isn’t convenient for most people.

  • avatar
    Ion

    I don’t see dealerships going anywhere for the foreseeable future. People will still want to test drive a car prior to purchase. The vehicles will still need to be serviced, now more than ever at the dealer do to growing electronic systems. Manufacturers are not going to spend the high costs of shipping to individuals.

    Tesla may not have a dealership in the traditional sense but they still operate in a similar fashion. My local tesla has their version of a showroom in the Westchester Mall. The cars are shipped in bulk by car carrier to a lot close to the mall. The maintenance is done at Mount Kisco. The only difference between a classic dealer is the size of the showroom the basic principles are still the same.

    Auto part stores will wind up like Caldors, Bradleys or the Wiz did in response to Walmart or best buy. A big brand name like Auto zone or Advance will weather the storm the smaller mom and pop style ones will perish.

    • 0 avatar
      krhodes1

      The only difference with Tesla is who owns the dealership. FIAT has dealerships in malls with remote service facilities too.

      In my line of work you can buy a $500K piece of equipment directly from the manufacturer, or you can buy it through a Value Added Reseller, who may charge more or less than the manufacturer, and may or may not provide added services. But you have that choice.

      There is no reason AT ALL that buying a car should not work the same way. If I want to order a car built to spec I should be able to order it from the manufacturer and have it delivered to my door. Or I should be able to CHOOSE to go to an independent dealership who will deal with my trade, and maybe has the car I want in stock and ready to go. Maybe at a better price, maybe not. There is NOTHING so unique about the selling of cars that they should have a single, legislatively required sales model.

      • 0 avatar
        Ion

        But would you be willing to pay the high cost of shipping a car to your house? What if it’s damaged in transit? should the manufacturer accept the risk of being held responsible for shipping damages?

        The other issue is a vehicle must be prepared before it can hit the road. It has to be inspected, registered, and in some case updated. It would have to pass through the dealer or service center anyway. The dealer could probably deliver it to your house, some already do.

        • 0 avatar
          sproc

          That’s the same tired argument like the idea that only a Realtor(R) can properly buy/sell a house.

          There’s no reason manufacturers shouldn’t be able to have a retail distribution center for the Greater Metro [insert city] Area that can do all that “prep.” For a little extra, they deliver it to your house instead. I call BS on the “high cost” of that, given that companies like Enterprise have been bringing cars to your door for years.

          For those who want a more hands-on experience, there will still be a place for small, independent retailers. Same goes for more isolated/rural areas.

          • 0 avatar
            Ion

            Then that distribution center is your dealer. That’s pretty much what Tesla is doing. Not to mention not every dealer has their own service center on hand. How are they any different than a “distribution center”? Furthermore your not buying a car from enterprise. if the cars scratched or something doesn’t work you have the representative make a note of it before you take possession of a car, but they don’t have to figure out a way to fix it for you.

        • 0 avatar
          krhodes1

          Why would the cost be higher? I live about a mile from the BMW dealer. When I ordered my BMW, they put it on a boat in Germany, which took it to NJ, then a truck took it to the dealership. They could have dropped it at my house just as easily. The prep was all done at the port in NJ, all my local dealer did was stick a Maine inspection sticker on it, which any inspection station could do just as easily. No different than buying a car out of state, you get it inspected yourself when you get it home.

          I would expect the manufacturers to still have local service outlets anyway. That is where the money is for a car dealer.

          • 0 avatar
            Ion

            Knowing the process I highly doubt all of your PDI was done at port. The cost would be higher because they would be shipping 1 car to a single individual verse the 10-15 they would to a single location. Does everyone in the US live a mile away from their dealer or even in an area that a car carrier can access? When I order stuff online a third party is always involved in the shipping. FedEx or UPS cannot ship a car to my house and the companies that can do not do so cheaply.

          • 0 avatar

            If we lived in a world where many new cars were delivered directly to homes, UPS and FedEx (or a new competitor) would be doing it cheaply. Even as-is today, we’re talking about adding a few hundred bucks to a five-figure purchase. Is that really a show-stopper?

      • 0 avatar
        izzy

        Ion-
        We are paying for delivery now. At the end of the day, your car have to travel from the factory to your home. Not having to detour to the dealer may even safe some distance. Handle shipping damage the same way as everything else being ship.
        Let the factory prep it. Or just contract out prepping to local repair shops.

    • 0 avatar

      I agree folks want to test drive a car before they buy. I ordered my LEAF online after a ‘test drive event’ in my area before the car came to market. Franchise laws ensured I had to ‘complete the transaction’ at a dealer, but other than that I made my decision and placed the order without the need for a dealer.

      It can work without the dealer.

  • avatar

    New car dealers as they exist now won’t actually be needed, (see Tesla) but will be kept alive because the Republican car dealer owners mantra of “less government regulation” and “free market” ends when their business model becomes outdated.

    Then and only then is government regulation a good thing…

  • avatar
    krhodes1

    I find I am buying more and more parts from NAPA rather than online. No shipping on cores (which is EXPENSIVE), I can LOOK at the part and see if it is correct or of appropriate quality. I usually know far more about my particular cars than the counter monkeys, but I can see where they would be useful for more common iron. What I do buy online are name brand items like Bosch sensors or OEM parts. But those are not things the generic auto parts stores carry anyway.

    I certainly am never going to be bothered with buying nuts, bolts, and fluids online. Shipping costs too much on very small or very heavy items.

    I have ordered tires online many times in the past. But not recently, because I now have a local tire chain that has prices that are just about as good, and they mount/balance/align the car for free when you buy the tires from them. The alignment doesn’t even have to be on the car you bought the tires for!

    So I don’t see these stores going anywhere anytime soon. Car sharing in a place like Maine? Hilarious.

    New car dealerships can go the way of the Dodo bird for all I care. If MSRP is the best price you can get, then fine. I only play the game because the game is there to be played. I don’t really care that much whether I spent $22,900 for my FIAT or $20,500. It’s rounding error. If CarMax had a car I wanted, I would buy it at whatever the price is.

    Steve, it is an interesting and evidently very different from my locale world that you live in down there in Georgia. Are you simply operating in an extremely poor area? Maine is supposed to be a poor state but we don’t seem to have quite so many issues with paying for things here. Title pawns don’t exist here. We even have a state safety inspection regime that has to increase the cost of ownership at the low end substantially.

  • avatar
    anti121hero

    Yeah this isn’t happening anytime soon. The same claims were made about best buy and radioshack for years, but that’s never happened. I need to fix my brakes, and i need to fix them NOW. Rock auto isn’t going to help me install a battery or headlight (if I didn’t know how) or let me look at the parts I’m buying in person to make sure they’re what I need.

  • avatar
    jdash1972

    I think the self driving car is a long, long way off. Who’s going to be liable when Timmy gets run over chasing his ball into the street? Or the car drives off a cliff because the maps are wrong, but those maps are flawless of course… Or when you’re simply taken to the wrong address. The failed sensor with mud on it and the defective map can’t be blamed.

    And everyone please stop using the word “technology”, it doesn’t mean anything!

    • 0 avatar
      redrum

      Self driving cars are not quite ready yet (still lots of edge case scenarios that have to be worked out), but they’ve already conquered all the scenarios you’ve outlined. Some cars can already self-apply brakes when it senses and imminent collision, and does it faster than any human could; Timmy may still get hit but if anyone’s liable it’ll be his parents. Self driving cars do not drive off cliffs; unlike a person mindlessly following a GPS, self driving cars have sensors that constantly scan the road for hazards. Taken to the wrong address…people, taxi cabs, and GPS already do that every day, I’ve never heard of someone suing over it. And if a sensor is clogged there are 2 easy options: 1) have a redundant sensor, 2) disable the car until it’s fixed (tow trucks will still exist).

      • 0 avatar
        jdash1972

        It’s interesting that you think it’s okay to kill Timmy with a driverless machine, but thousands of lawyers would laugh at you. People can be excused for being human but now you’re talking product liability, and when the pockets are deep the lawsuits never end. Look at Toyotas recent fine for unintended acceleration, or Ford and Firestone. Just imagine the recalls….. He’ll, GM can’t even make an ignition switch that works, or correct the problem in a timely manner, imagine them trying to build a “smart car” that drives itself, avoids obstacles, misses children and doesn’t drive off cliffs? That’s a joke.

        • 0 avatar
          redrum

          Nowhere did I say it was “okay to kill Timmy”. Your hypothetical was that he jumps into the street (presumably not at a crosswalk). Almost every manufacturer already has a collision avoidance system that can avoid this situation better than any human. Now, if Timmy is really determined to get hit, he could probably launch himself in front of a speeding car before it is physically capable of stopping or swerving. How is that in any way the car’s fault, whether it’s a computer or human driving it?

          Bringing up a single example of poor design does not invalidate all the advances that have been made and will continue to be made in cars. Not to mention, the failure rate necessary to instigate a recall is still far, far below the normal human error rate.

  • avatar
    ajla

    car-part.com is almost completely useless for me until “Star Trek” style transporter technology becomes available.

  • avatar
    N8iveVA

    10 years really isn’t a long time from now and i honestly don’t see that things will be that much different. Yes, maybe a small auto parts chain will have closed but that’ll be to the benefit of other chains. Yes, there may be more Tesla type sales but traditional dealers will still be in abundance. And out here in the burbs where everyone has at least one car? Yeah they won’t be using car sharing services in any meaningful numbers. Save those for city dwellers.

  • avatar
    Pch101

    New car transactions almost always involve a loan or a lease.

    Large stores can manage their inventories more efficiently than the smaller stores.

    If anything, I would expect the larger dealerships to have the advantage. If anyone will be managing online inventories, then they’ll be the ones to do it.

  • avatar

    New car sales my go to an online model, but used car sales are better suited to a dealer model. Private Party sales (in person or online) will always exist, but the traditional 2nd hand car dealer will do just fine.

  • avatar
    Lou_BC

    I doubt that the traditional auto dealership will be dead in 10 years. We will see consolidation where a few big operators own most of the dealers just like auto parts and tire shops.

    Car-sharing………. not in my part of the world.
    As if I’m going to share a truck with a dozen other guys during peak fishing or hunting season.
    Sharing will only work in urban centres where people view vehicles as an appliance alternative to public transit.

    • 0 avatar
      thelaine

      +1 Lou. If I’m poor I’ll walk or take the bus. If I’m less poor I guess I’ll “car share.” At the moment, I can afford a pickup, so if you want to get me out of it, you will have to impoverish or carjack me. Transportation ideas that work great in San Francisco don’t always translate well to other places, and vice-versa.

    • 0 avatar

      Car sharing makes sense for people who only occasionally need a car – the college student who walks to class most days, the city resident who takes the subway to work but occasionally needs a car to run to Ikea to stock up on fiberboard end tables and Swedish meatballs. The vast majority of Americans still live in suburbs, and still need a car daily to drive to work, at the same time their neighbors do.

  • avatar
    DC Bruce

    This past weekend, I just sold a very “rough” ’02 Saab to Carmax. That’s a big box if there ever was one (it was founded by the same folks who brought you the now-bankrupt Circuit City). The big box electronics and computer store is nearly dead. Best Buy is struggling. Radio Shack is looking for a buyer. Sears is on life support.

    Here in metro DC, most of the car dealers are multiple franchise chains: Koons, Ted Brit, Ourisman, etc. (at least on the domestic nameplates). I think the better of them are taking their lessons from CarMax (which also sells new Toyotas in metro DC) and are cleaning up the dealer experience. They’re certainly smart enough to see that Carmax is able to get about 5% more for the used cars it sells than many dealers’ advertised prices, even when the dealer sells a CPO.

    I recently shopped pickups at a Chevrolet dealer. The salesguy I dealt with was very pleasant and professional. I don’t really need the truck now . . .more like 3-4 months from now. And I decided to assume the risk that the pricing will be good and the particular model I want will be available at that time, so I did not pull the trigger. But I will call that guy back and deal with him.

    Six years ago, I bought a new Honda and it was a completely satisfactory experience . . . no b.s. and a professional operation all around.

    At least around here, car dealers are very big business and very professional. They’re smart enough to adapt as needed . . . and they do provide added value to both the buyer and the manufacturer. Today, some of the biggest competition for new cars is used cars with 2-3 years’ of use. I do not see them going away.
    As for Tesla, it has yet to bring a “popular-priced” car to market, much less prove the viability of an EV as more than a curiosity. As a company, Tesla is being supported by selling carbon credits to manufacturers of ICE-powered vehicles, a kind of government subsidy. It’s vertical integration into the battery business is not convincing to anyone. Batteries are a low-margin business, where experience matters. So, I don’t see Tesla as anything but another exotic car manufacturer, with few lessons to teach companies who sell cars by the 10-thousands.

    The problem with the parts business is that, if an individual wants to get the pricing that the autoshop gets for the same part, he has to go online. But I really don’t see an increase in the number of D-I-Y mechanics, so that probably won’t change. If anything, modern cars are pretty D-I-Y unfriendly, so a shop is going to have to do the work. When you have to program the car’s computer just to replace the battery, you know you’ve hit the end of the D-I-Y line.

    • 0 avatar

      I could see the Carmax-ification of big box car dealers before them going away completely.

      I bought my Pathfinder from a Carmax that also has a new Nissan franchise. Their internet presence is great, and they had the exact one I wanted in stock, while every other nearby Nissan dealer seemed to only have one in stock, in poop brown. Smart dealers will consider adopting a similar model – fixed price, website with 50 pictures of the car, ect. I also would not be surprised to see Carmax expand further into the new car business – I think they are in the top 50 biggest new car dealers in the country already despite only having a dozen or so dealers that sell new cars. It’s a great way for them to expand their business… and a great source for late model trade ins that they are so good at reselling.

    • 0 avatar
      krhodes1

      Why is registering a battery such a big deal? You need a computer (which you likely already have), a $50 cable, and some free software. It is just a tool, no different than having the right size wrench. And I would MUCH rather type on a keyboard than get greasy. Much ado about not much.

      Those of us who DIY will continue to do so, and reap the benefits. Those who do not will continue to not.

      • 0 avatar
        golden2husky

        Registering the battery IS a big deal because it is completely unnecessary. It is a classic example of the manufacturer working for the dealer at the expense of the consumer.

        • 0 avatar
          krhodes1

          No, it is not unnecessary. It is VERY necessary as part of BMW’s Efficient Dynamics package. They are not doing it just to make life difficult and enrich the dealers. Basically BMW has a HUGE alternator that they generally only use to charge the battery when the car is coasting. Because of this, the computer needs to know a variety of things about the battery – it’s size in CCA, the type of construction, it’s age, etc. These determine how the computer should charge the battery. Change the battery type without telling the computer and the battery can explode due to over charging. Or leave you dead on the side of the road due to undercharging. Every little bit of added efficiency helps, and 10 minutes extra work every 5-6 years hardly seems onerous to me.

          • 0 avatar
            Luke42

            Recognizing hardware varieties is a Solved Problem in IT. If BMW can’t do it over CANBUS, that’s their problem.

            If you plug an LCD panel into a laptop, its capabilities are picked up automatically. Same thing, if you in a USB device. You can do the same thing with a hybrid battery BMS over CANBUS. Or, if you can’t, just run some extra wires for USB or RS-485 or I2C or Ethernet… This problem is easily solvable.

            Yay for German Engineering and chosing to invite human error into the process…..

          • 0 avatar
            krhodes1

            How exactly is BMW supposed to tell what random battery has been stuck in the car when there is no standard for reporting such? You could fit anything from a 500CCA lead-acid battery to a 1000CCA AGM battery in there – they can handle radically different charging rates. I fully understand why they don’t make this doable through the user interface in the car though – THAT would be inviting human error!

            The alternative is MUCH worse – BMW could simply require that you use a proprietary BMW battery and no other. At least there is the flexibility to use any battery you want, you just have to give the car some information about it so that the battery does not get damaged and the system works as designed. It really is a simple procedure – hardly BMW’s fault if some of their dealers use it as a profit making exercise. As has been pointed out here many times, the dealers are independent businesses over which the makers have very, very little control.

          • 0 avatar
            golden2husky

            I’d buy that argument, but why then do other car makers with the overrunning pulley setup not require such elaborate programming? Judging from BMW’s concern about disintegrating plastic cooling systems (or lack thereof) I tend to think BMW would program the car for the factory battery and that would be that. I’d really like to hear a BMW expert weigh in on this…also was the programming requirement first seen with “edynamics?”

          • 0 avatar
            krhodes1

            It’s not an overrunning pulley, it is a computer controlled regulator that needs to know some details about what it is charging. People have skipped this step and had their new battery EXPLODE. And yes, the requirement for registration appeared with Efficient Dynamics. First in the 5, then in the 3, IIRC.

            It is not elaborate programming, you are telling the computer the type (chemical composition), size in CCA, and that it is a new battery. It’s really not that big a deal.

          • 0 avatar
            Scoutdude

            There is absolutely no reason to need to have the computer programed with information about the battery. The battery is the source of the regulation and it is easy to determine the needed charge rate and voltage. There are tons of computer controlled battery chargers for under $100 that are capable of determining the batteries charge needs and do not blow up batteries nor undercharge them.

            It is done purely to increase the profit of the dealer and mfg.

          • 0 avatar
            krhodes1

            So Scoutdude, you know more than BMW’s engineers?

            Yes, a little trickle charger that has all the time in the world can do that. BMWs system normally only charges the battery when the car is coasting. That means it only charges a fraction of the time. Which means that when it IS charging, it is like filling a 5 gallon bucket with a fire hose. My car has a *250* amp alternator – you don’t think that thing can blow up a battery if it isn’t controlled just right? You can actually feel it when the computer decides to charge the battery when you are coasting. Ultimately this is a very, very, very mild hybrid energy recovery design – I think it is quite a clever arrangement, and worth the extra effort every so often. BMW has a great white paper on all the little things that comprise the Efficient Dynamics systems in the car. It is why a BMW costs more than a Camry. It is not just the little blue and white thing on the hood, it is the added degree of sophistication in the engineering of the car. If you don’t agree with their engineering decisions I suggest you buy a different car.

            If BMW wanted this to be a profit center they would just use a proprietary battery.

  • avatar
    Kenmore

    Well, how different is today from 10 years ago? And whatever change there’s been, why would the rate of change accelerate over the next 10 years?

    Cars, new or used, are going to remain big, scary expenses to most people. How will they ever trust online buying? The only “test drive event” they’ll bother attending is when they have to consider a purchase, not whenever a manufacturer happens to stage one to promote a new product.

    Probably the worst venue for this soothsaying (about dealers, anyway) is a blog that is mostly by and for affluent, micro-focused car guys. That’s just a fringe group.

  • avatar
    George B

    Steve, I see consolidation and a hybrid website-to-store model. The general trend would be fewer storefront locations with much lower inventories, but with the ability to get parts or vehicles quickly when ordered. I’d rather pick up expensive parts at a retail location than have UPS deliver them to my front porch while I’m at work. Similarly, an auto dealership doesn’t need to stock every trim level and color option if they can get the customer what he or she wants in hours or days instead of weeks. If customers were buying directly from the manufacturer, there might be an opportunity for custom order cars. Tradeoff logistics challenge of the custom order against an immediate guaranteed purchase.

  • avatar
    troyohchatter

    Service will always sell. Thing is, the big box stores being mentioned, the ones on life support, they offer no service. In the case of the typical dealership experience, there’s the slimeball salesman that doesn’t even know his product and his “closer” finance thief trying to bend over the next “walkup”; neither offer service to the customer. If this does go away, I won’t miss it.

    As far as parts houses, I tend to agree that the market will shrink but it won’t be eliminated.

  • avatar
    el scotto

    Do other countries have franchise laws that protect dealerships like the US does? If not, I could see a company executive asking “why oh why, only in America do we put with these back-slappers, jack-napes, and all around pecker-woods?” Maybe Suzuki will come back with nothing but factory owned dealerships or Mitsubishi will buy out their few remaining dealers and go the factory owned dealership route? It would interesting to watch either two companies do this. It could be an opening salvo in the “We sell our cars on-line” war.
    .

  • avatar
    Hillman

    The economies of scale will force the move to larger mega dealerships. Like the small shop vs walmart, the larger dealerships will be able to beat the small local dealerships in price. The online price quotes will make this transition a reality. The dealer who is willing to accept a $200 profit on 10,000 units will be better off then the guy who gets $10,000 on 100 units.

    • 0 avatar

      I can assure you that average gross profits for high overhead high volume metro stores are higher than the little country store, who maintain a real advantage over their larger competitors. When there is an economic downturn, the low overhead stores are well positioned to survive to the other side.

      Interesting how people outside the industry are so good at giving actual market participants so much advice. Who is better positioned to comment on consumer buying behavior, people actually from the retail car business or amateur theorists?

      • 0 avatar
        Hillman

        So what are you saying? The country store dealer is better positioned to survive a downturn compared to the mega dealership groups? That must be why the smaller dealerships are folding into chains after the worst recession in decades. The small independent dealer is dead. Some just don’t know it yet.

        • 0 avatar
          Pch101

          The big box stores have higher fixed costs. They have much more upside potential, since they can be more efficient, but they also have to move more volume just to hit breakeven.

          The trend surely favors the larger players, but during a severe downturn, the smaller store should be able to get by on less.

          • 0 avatar
            Hillman

            Agreed the fix costs can be higher but the ability to move more units is key. By taking advantage of online price quotes and other services they can steal business from the smaller dealerships by undercutting them and providing no haggle services.

          • 0 avatar
            Pch101

            “the ability to move more units is key”

            It isn’t during periods when demand is too low to carry the store.

  • avatar
    Mandalorian

    A problem with this proposed new system is some dealers sell multiple brands from multiple marques.

    There isn’t a problem if BMW own XYZ BMW or if GM owns ZXY Chevy/Cadillac/Buick, but how would if work for Billy Bob BMW Ford KIA Chrysler Honda? I would say at least a third of dealerships sell multiple marques.

    This also limits customers who want to stay with one dealer but want to buy a vehicle of a different brand.

  • avatar
    gasser

    Friends, you vastly overestimate the sophistication of the average car owner.
    Most people can’t even check the oil in a car for themselves. If they venture from a dealer to an independent shop, they are considered shrewd and knowledgeable by others. Since Autozone sells neither pizza or yogurt, they’ve never been in. Guys like you may be buying on line parts, but the parts stores which cater to the local shops will always have business.
    As to auto dealers, the ones that combine price, selection, financing and a place to dump your trade will grow. People no longer order and wait weeks to months. This requires large inventories which someone must select to fit his customer, order, finance and warehouse. This is the key difference between the Tesla paradigm and the current big box system. What works for the $100K car, doesn’t work for the $20K car especially when that purchaser has an under water dog to trade and iffy credit.

  • avatar
    indi500fan

    I recently did a loop of local Kia, Mazda, Honda, and Chevy stores.

    Man it was ugly. Still doing business like 30 yrs ago. Sharkey salesmen and games being played. I know auto dealers are big political contributors and have a lot of sway in state legislatures, but these guys are just sitting ducks for a better consumer oriented biz model.

  • avatar
    Onus

    My favorite parts store is my Local Napa. Great guys and the best part is if they don’t have it stock they can have it in my hands the next day for no extra cost.

    My truck being a 7.3 IDI F250 last produced in 1994 i don’t see parts flying off the shelves for this engine. I can get everything i need for it with little issue.

    I needed a fuel pump about 2 years ago. Next day.

    Evidently it is also hard to find a transmission filter for a 42re in a Grand Cherokee in the local big box parts store. Go to Napa and I’m all set.

    I usually buy oil and filters at the big parts store unless i see an ad for cheap oil at Napa which they seem to always have every month on something.

    I suggest everyone subscribe to napa, advance auto, autozone, circulars to get good deals.

    • 0 avatar
      Steven Lang

      Or go here…

      http://www.bobistheoilguy.com/forums/ubbthreads.php/forums/33/1/Product_Rebates,_Sales_and_Pro

    • 0 avatar
      Onus

      That works too. I do frequent Bob Is The Oil Guy from time to time. Great website.

      I do check my email more often so it works for me.

    • 0 avatar
      jpolicke

      Chrysler has practically built the entire product line around the Pentastar V6, so naturally Walmart hasn’t heard of it and still doesn’t stock oil filters for them. So I buy my Pennzoil Platinum and leave. Found a CJDR dealer in North Carolina on Ebay that put his parts department online, and sells them for less than A-zone or my local dealer.

      • 0 avatar
        Pinzgauer

        Last I checked Walmart has Fram filters made for the Pentastar, at least the 2014 variety of filter which is different than the previous years.

        • 0 avatar
          highdesertcat

          The Pentastar V6 uses the Purolator L35136 (IIRC). I bought a case of them from Amazon ($4 a piece) back in 2011. WalMart sells them for $13.97 in my area. Swapping one out takes all of 1 minute! Seriously! And they do trap dirt (on the inside).

          O’Reilly’s has the best deal on Cabin Air Filters for the 2011-2014 JGC at $6.99 each in my area. But I have ordered the Fram Cabin Air Filters because they have Baking Soda inside the filter material folds. Highly recommend them at $23.95 each from Amazon. Buy two or more at a time and get free shipping, no tax (in my state). Saves bucks!

          I use a K&N Air Filter. Has paid for itself after three oil&filter changes at 3K-5K miles between oil changes. Been using K&N since 1972, on all my cars, trucks and motorcycles.

  • avatar
    Dimwit

    The big thing is: What’s in it for the manufacturers? For the most part the companies have *no* interest in dealing with the retail crowd. Can you see Ford or GM dealing with an irrate buyer because the option pkg was different from ordered or the colour isn’t the same shade as indicated on the monitor? Me either. Or smartasses trying to pull a COPO special cuz he got codes from a cousin with shady access.
    You can see it. Not appealing at all. Sure, troubled assemblers with dealer problems already could do something, but if there’s already trouble getting feet into the dealer, just because it’s online isn’t going to be a panacea.
    And another thing, this is very US centric. The dealership model seems to have been exported worldwide and doesn’t seem to be going anywhere from outside the US borders.

    • 0 avatar

      There are many factory owned dealerships outside the U.S. There are also many right here in he US as well, although the corporate make up of these factory owned stores is somewhat different than outside the U.S. In Japan, there are MANY factory owned stores. They don’t compete with franchise dealer owned dealerships which are owned by large multi dealership corporations with large granted territories.

  • avatar

    the industry will never be able to replace the salesman.

    • 0 avatar
      sproc

      Replace auto salesmen entirely, no. But there are a significant and perhaps growing number of well informed customers who are 99% sure what they want, and so jaded by poor experiences that they’ll gladly find ways to avoid ever having to interact with one.

      • 0 avatar
        Lou_BC

        @sproc – I agree that we will not be able to replace salesman but they do need to get rid of the slimy image of salesmen.

        No one likes for profit healthcare but the front line staff rarely ever see disrespect. The auto industry is the opposite. No one begrudges a retail outlet the right to make a profit but most everyone has had an issue with frontline staff.

  • avatar
    AoLetsGo

    Ten years from now?
    Tire centers – yes need tires now and installed
    Repair centers – yes car broke fix now
    Auto parts stores – need parts now to fix car, don’t need 3 similar auto parts box stores close to each other some will close
    Car dealerships – that is tricky, dealers have spent a lot of money and have a lot of power to protect their business model, expect slow changes in this buying experience
    Sears and Kmart – dead
    JC Penney – dead
    Sears and Penney closing will take down a lot of older, traditional malls, I have seen it already in many parts of the country
    Home Depot and Lowe’s will soldier on with flat sales but how about the surprising strength of the expansion of Menards in the mid-west
    Best Buy – dead but Microcenter will be okay but not much of a business model when it takes a metro area of over 5 million to support one store
    Dollar stores and grocery stores will be okay but this is a race to the bottom and expect consolidation
    Any place you need to touch, test, feel, try on, eat, drink or social interaction will be okay if run right

  • avatar

    RE: “Car dealerships have a triple whammy coming straight at their bottom line. An adversary in the form of Tesla, who has the monetary means to fight a legal war with the strong support of the general public.”

    Here we go again. How is Tesla a threat to franchise car dealers? Articles like this are written by people who don’t have a clue how the retail new car business works.

    Of course consumers don’t like the process of buying a car. They have to put some effort into it looking for the dealer and vehicle that satisfies them. AND they have no guarantee they will “win” the negotiation. Why wouldn’t they be happy with that? They’d prefer the dealer didn’t make the $3k per transaction required to pay for the dealer tier of distribution. They tend to naively believe that factory owned stores would reduce the cost of the dealer network, when the opposite is true.

    All consumers are different. They all have the ability to shop for the deal and dealer that satisfied them. Consumers have more on their side than at any time in history and they still complain. That should tell you something.

    • 0 avatar

      “Consumers have more on their side than at any time in history and they still complain. That should tell you something.”

      Here’s what that DOESN’T tell me: that “consumers” are just whining.

      As long as the price of a new car is “negotiable”, consumers will demand (and in this day and age, get) as much information on cost and pricing as possible. That’s why the current system is so convoluted — to hide that information from the average Consumer-Reports-educated buyer — and THAT’S why consumers “still complain”: Because they feel that the process of buying a car is akin to playing blackjack against a vindictive, duplicitous house that knows what cards they’re holding.

      It’s DEEPLY unpleasant. Does that hurt dealers’ business? It will if and when there are less unpleasant alternatives.

      Enter Tesla.

      Tesla’s prices are what they are, no blackjack involved. And the folks you meet on the floor at a Tesla store aren’t working on commission (so they can be friendly and casual and not shark-like), and Tesla goes to considerable lengths to provide their customers with a polished, positive experience.

      Are Tesla buyers paying “too much” for their cars? You bet: Tesla’s pricing is intended to support a 25% operating margin once they’re at scale, which is just ridiculous. (Directly competing brands like BMW are generally in the 10-12% range globally. Ferrari did a little over 15% last year. Porsche led the industry at 17% and change.)

      But Tesla buyers still experience that sales process as a big revelation. Ask yourself why.

      • 0 avatar
        brenschluss

        I came to say much the same.

        There are plenty of transactions where I know I’m not really getting the best bargain, but because the system of hiding wholesale costs from the consumer at the end of the line is so entrenched, I really don’t mind. If Home Depot wants $700 for a grill they paid $160 for, I’ll give it to them, because no one else is getting them for $200. Peace of mind is worth a lot, but unfortunately few would understand if tomorrow no dealer would negotiate from MSRP. The problem is simply that we know we can do better because everyone does.

        Also, I can’t reconcile the idea of “shopping for dealers” with the many areas that aren’t spoiled for choice. If you want a brand new Firebreath Mansedan but the only Firebreath dealer within 250 miles is full of people you don’t want to deal with, your options are slim.

  • avatar
    Xeranar

    Lang’s personal soapbox of the Internet will conquer all never quit sells me on the idea. Not to mention his business tends to deal in the ultra-low end of the market which while sizable doesn’t tell the more common story of the system.

    Will big stores go away within the decade? Not likely. Tire centers and repair shops are a pretty steady group, if EVs take over the market that could seriously shrink as the need for component repair would drop significantly as well as oil consumption. But assuming EVs remain a steadily increasing segment and require 20-25 years to dominate the market place we’re unlikely to see them go away that soon.

    The auto parts store could evaporate in the next two decades but how many I see being erected seems to dictate otherwise. If anything they’re being built smaller and having more numerous service bays. They also act like quick-service warehouses to independent repair shops and bigger tire shops that may need a quick part.

    As for the dealership, we may see a consolidation of individuals but they aren’t going away as a model any time soon. The capital required to shut down the model is so obscene that Tesla has avoided by simply not starting with them. The Internet can do many amazing things for commerce but eliminating any of these places effectively seems unlikely, least in the short-term of a decade or so.

    • 0 avatar
      Steven Lang

      The overwhelming majority of my business is wholesale, not retail. However, that has absolutely nothing to do with my positions about the retail side of the world.

      I frankly believe that what I wrote is pretty conservative.

      1) In the next 10 years the online world will overtake the big box model.

      This has already happened in a lot of industries. Books, toys, office supplies. Auto parts will eventually go down the same path. There will be large distribution centers to handle the commercial trade and the retail presence for parts stores will be far more limited than it is today.

      2) Automakers will use subsidiaries and partners to become providers of automotive transportation services in those places where the population can sustain it.

      This is already taking place. If self-driving cars ever become a legal reality in the United States, a great part of our population won’t need to own a car at all. Many neighborhood shopping centers will subsidize the cost of running these vehicles in affluent suburbs which will limit the need for a second car, and access to these vehicles will eventually become universal.

      The concentration of vehicles into fleets will limit the need for repair shops, tire centers and auto parts stores. Dealerships will see a slow and unstoppable change in the size of their audience.

      Will some big box retail establishments be around? Of course!

      The bigger question is whether consumers will require their services as much as they do right now. I think the short answer to that question is no.

  • avatar
    psychoboy

    I can’t suggest where the front of the house is going, but Big Box Car Stores (namely the multi-line mega dealers) aren’t getting ready to shutter their parts and service departments due to an online revolution.

    Google isn’t coming to your house to rotate and balance your tires. Amazon isn’t doing oil changes in your office parking lot.

    And…this suggests that retail sales are where it’s at in the first place. The dealership I work for barely even considers the retail aspect of our parts sales. I’m not even close to kidding. The overwhelming majority (75%) of our gross profits are made on the wholesale side, which is impressive considering our wholesale profit margin is 8% and our retail profit margin is 50%. My store is a bit of an outlier, but those numbers aren’t off the charts compared to the other stores in our group.

    Body shops keep us in business. Of the $350,000 in inventory I have on hand at any given moment, maybe $50,000 stands a 50/50 chance of seeing a retail transaction.

    I can get next day nearly anything in my catalog (assuming I don’t already stock it) and I can get it to our customers within 24 hours of me getting it. I get parts at 2am from my overnight facing warehouse, and my customers get parts at 2am on overnight dedicated delivery routes to four surrounding states. Frankly, I’m faster, cheaper, and better than Rock Auto and LKQ for most everything a wholesale customer wants.

    Plus, I’m online for retail customers (at a pretty decent price point), and most anything can be FedEx’d overnight if you are willing to pay for shipping. If Rock Auto can beat me anywhere, it’s because they are selling aftermarket and I’m selling OE…that’s a judgement best left to the customer.

    In short (too late!), the front of the house might have to follow Tesla’s or CarMax’s lead to the Saturn-envisioned future. But, so long as the drivers of those cars keep breaking them, wrecking them, and drowning them…the back of the house isn’t likely to face broad changes.

  • avatar
    ponchoman49

    The last thing we need is more businesses folding up. We have already suffered so many loses that have put people on the streets and have lowered tax revenue for cities making property and school taxes unbearable. When is this lunacy going to stop? We need more businesses opening up, more jobs and more tax revenue not less. Online sites do not contribute to your local tax revenue or employee local people. This massive problem seems to have escaped today’s younger generation who seem only interested in saving a couple of dollars. On the other side of the coin some of these box store retailers need to get a grip on there pricing and be a bit more competitive. There is no reason for a can of R 134 Freon to be priced at $18.99 when Walmart can sell it for 9 bucks as an example.

    • 0 avatar
      brenschluss

      As if any other generation wouldn’t be as happy to save money any way they could. Were there the option to easily research and get the best price on any product and have it shipped to your door in 1950, I bet folks would have taken it.

      On pricing, if the little shop sold their products at WalMart prices, they’d go out of business. The only option today, if you really want to support local businesses, at least those which provide something easily found online or at a larger store for less, is to eat the cost yourself. Most people aren’t willing to do that just for the sake of it.

    • 0 avatar
      Steven Lang

      Commercial cost for freon right now is about $3 a pound. At least if you have a small business. I just ordered a small 30 lb. tank last week.

  • avatar
    tobiasfunkemd

    Having worked for one of the big box auto parts stores in the Bay Area (anybody remember Kragen?) in high school and college, I have a pretty detailed, but admittedly limited, insight into the average auto parts store customer. I can confidently say the majority of these people are not going online for parts.

    The commercial guys want same day parts, and they want the salesman on the other end of the line to be knowledgeable enough to get them the right part the first time. The shade tree mechanics usually will bring in the broken component (starter, alternator, water pump) and want to physically compare it to the new part before purchasing. For large sales, the vast majority of these went to people at the lowest end of the socioeconomic ladder: undocumented workers, chronically unemployed people, workers right at the poverty line. They purchased 98% the engines, transmissions, and radiators we sold, often in cash, and had friends or family provide the labor. These people are likely to be unbanked and unable to make transactions over the internet without a credit card.

    The customers auto parts stores will lose are the semi-knowledgeable DIYers who will order the new headlight, oil and air filter, and spark plugs directly off the internet, and go to WalMart for oil. I wonder if these guys will eventually stop perusing the weekly flyers for deals, as they were a regular source of foot traffic in my branch, especially on the weekends.


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