Nexus’s Donati on the Merits of Factory-Direct
Editor’s Note: The following is an unsolicited statement from Elkhart, Ind.-based Nexus RV, a new Class C builder, on its decision to adopt a factory direct business model.
Recently, Mike Molino, president of the Recreation Vehicle Dealers Association (RVDA), wrote an editorial in the September/October issue of RV Business. This magazine is primarily an inside industry trade magazine that informs those that supply, manufacture and sell RVs of current affairs. I read with astonishment the candor in which Molino delivered the current philosophy of the RVDA.
It appears the association is concerned with sales that occur outside a dealership’s given territory and with service centers that work on RVs that don’t sell that product. Interestingly, if the association had their way, customers would pay more for their RVs because you would only be able to buy your RV from a local dealer. Consequently, they would pay more to have their unit serviced because the customer could only get their unit serviced by a stocking dealer that would charge more per hour for repairs in order to cover the large overhead associated with stocking large inventory. By restricting the options a customer has can only increase the cost of both the unit and servicing the unit after the sale.
At Nexus, we sell Class C and B-plus-style Class C motorhomes directly to the retail customers, and we have set up a network of servicing dealerships throughout the country that is more extensive than any other dealership in the industry. The fact is RVers travel throughout North America and relying on the local selling dealership to handle the service needs is nearly impossible. Many times the RVer is thousands of miles away from the selling dealer and must rely on mobile service centers and “non rolling stock service providers” to get them on the road. The current manufacturer-dealership business model has failed horribly with supplying customers with the service support they need. Removing all the politics and restrictions to making customers happy is the foundation that Nexus RV is working toward.
As for the selling of RVs directly to the retail customer, without the dealer network, will save customers money. The buying experience when buying from a factory direct cannot be matched by a dealership. The overwhelming advantages are easy to see. First, retail customers are looking for as much information on how their unit is built as possible. In fact, many retail customers want to understand each and every process and component that goes into the building of the unit. As a factory direct company, we know everything there is to know about our product and the reason behind each design. When visiting a dealership, the customer can only look at finished product and the dealership personnel have little information on each model because they represent many different companies and they have too much to remember. This lack of knowledge can cause many other problems down the road. Secondly, when buying factory direct, the retail customer has the ability to “menu customize” their unit. Picking fabrics, outlet locations, paint colors and important options makes the retail customer feel like they had some input on their unit. Contrarily, buying from a dealership, the retail customer is pushed hard into buying the “green one” on their lot because the dealership is trying to move the inventory as it has been on the lot for up to a year or more. Enticing customers to buy aged units with “rot lot” by lowering the price is a recipe for a dissatisfied customer. Buying factory direct, the retail customers gets to buy a unit with little miles on the odometer and that has been freshly built. The unit is truly new.
Finally, one of the most compelling reasons to buy factory direct is the value customers get when eliminating the “middle man.” At Nexus, we have measured the savings we have given our customers. After a year in business, we have saved our customers an average of $7,100 dollars. Imagine, a better buying experience because of more information, better service because of a national service network, a better unit because it is newer and it is built to the customers specs and at a lower price. Do not let anyone tell you different, if you can get all those benefits to buying from a factory direct, you should do it!