As seen in May 31, 2017 in Opinion, RV Industry News
By Charles Campbell
Executive Partner, U.S. Compliance Academy
Recently, it appears I have received an abnormal number of calls involving overall management control of dealerships. Perhaps the recent few years of an upswing in RV dealership profitability and/or highly noticeable increased sales volume has allowed dealer principals (DP) to become a bit lax in maintaining the rigid controls they were forced to take after the downturn caused by the recession.
Lately dealer principals have inquired if they are the only ones that have allowed various management positions to attain more control over the daily operations of the dealership. This includes concerns over the proper stocking of inventory to what vendors they utilize.
This is certainly an area of mixed reviews and opinions. However, most, if not all, successful dealer principals will surely agree that they must maintain a high level of control over the daily operations, including what inventory they stock and the vendors they utilize. These vendors include parts suppliers, manufacturers and ancillary products & services providers.
Upon inquiring with some highly successful dealer principals, I found a consensus on a few factors with regards to monitoring their senior management team. These are as follows:
• The DP should always reserve the right to make the final decision on how much and what inventory should be stocked, after consulting with his senior management team. After all, as several DPs quickly highlighted, at the end of the day it is the DP and his/her personal finances on the line, not the members of the dealership staff.
• The DP should have final say on which vendors the dealership shall conduct business with. Once again, several DPs pointed out that all too often red flags start to pop up when a new manager comes aboard and soon thereafter wants to exchange vendors for personal reasons, such as they liked conducting business with a manufacturer representative or enjoyed working with an ancillary products agent, and therefore they want to fire the current agent or bring aboard an “old friend.”
This isn’t to say that eventually you don’t permit them to bring such an old acquaintance aboard. However, if your current rep, product or ancillary product provider has already proven to be a reliable business partner, why would you want to change?
Friendships between your managers and others within this industry should not have an absolute bearing on who the DP allows the management team to bring aboard. In fact, DPs informed me that this has at times created problems and conflicts of interest.
DPs stated that, after a given probationary period for the manager, they would permit their desired rep or agent to provide the dealership with a presentation. If the presentation is convincing enough that the new rep, agent and/or product is significantly more worthwhile than the existing relationship, then it could be the proper time to change. But be very careful in making such a decision they all warned.
A couple of the DPs informed me that, based on past experiences, they immediately become a bit weary and even somewhat suspicious when a manager becomes too aggressive and/or insistent on bringing “his/her rep or agent” aboard. This is especially true, these DPs exclaimed, if the current vendors, reps agents or products have stood the test of time in providing quality service and performance.
All the DPs I interviewed agreed on one major point, and that is that the DP should never relinquish total control to anyone who isn’t directly invested in the ownership of the dealership.
Should the business fail, or even loose considerable finances and/or create a bad customer relations issue, because of a bad business partnership with a rep or agent, it is the DP that will certainly suffer the most. The DP stands to lose everything, while a manager can simply move along to another dealership and cast blame on somewhere other than their “control” within the dealership.
All of us within this RV industry have witnessed some of the best managers any dealership could pray for, as well as a few incorrigible or misguided managers. Therefore, the question for the DP is: Who is really in charge of your dealership?