Nissan Dealers file a formal complaint with Nissan USA, against New-Nissans.com...

new-nissansDOTcom · 02-25-2005, 01:37 AM

It seems that there are dealers who have filed a formal complaint with Nissan against us for our marketing practices. The practices that they are complaining about are; our consistent use and reference to Dealer Invoice in our marketing efforts and public advertising. They are also angry because often when online shoppers type in some of their Nissan dealer's company name - my site will often pop-up on the first page along side of theirs on Google, Yahoo and MSN; before the complaining dealer's website in most cases, and the Title in the search engine link is using the term Dealer Invoice. They are also very upset that we are in their words prostituting the marketplace or another way to say it is whoring out new Nissans. They fear that my site and our marketing strategies are hurting their profits. Some also claim that we devalue Nissans - like selling the hot 350z roadster for a fraction over, currently under dealer invoice (that'll make them real mad)!

The sad truth is, I'm not their enemy as many Nissan dealers see us as. The true enemy is the plethora of companies and websites that these complaining dealers themselves pay for leads - such as Autobytel.com. And in part Nissan (All Manufactures) are also making online business more challenging for its dealers. Here's how and why:

Dealers who wish to capture online sales opportunities normally pay for leads from Edmunds.com, kbb.com, Autobytel.com, Dealix.com and many other lead source providers known by the consumers as auto buying service sites.

A lead, just so you all are clear is a single consumer's information obtained through some marketing source.

A dealer will spend about $2000-$9000 each month to sell about 20 cars online for about the same amount of profit as on the floor: $60,000 by industry standards. These dealers who filed this complaint believe we are making their efforts to fairly profit from online consumers more difficult; but in reality these dealers have actually been paying someone long before I came along to make their profits more difficult to maintain. They still haven't figured this out.

I'll explain- If you go to Google and type in the search term Nissan Invoice - you will get a bunch of websites belonging to the very guys that charge all the dealers for their leads. Everyone of those companies are using the very same marketing tactics as I am - where do they think I came up with the strategy? In all of the results on for the search term "nissan invoice" on Google - there is only one website that belongs to a guy that directly sells Nissans, that's my site! It actually occupies 2 placements on the first page - No. 3 and No. 4 spot on the Results 1 - 10 of about 1,190,000 website placements for the search term nissan invoice. It also happens to be the only website that provides its leads to an exclusive dealer and its for FREE to the dealer as I pay for the expenses out of my own pocket!

Why aren't there any dealers under this popular search term? It's because manufactures such as Nissan prohibits their dealers from marketing as I'm doing; referring to what the online consumer refers to "dealer invoice" - Another problem is Nissan has very strict website design guidelines that make them not so search engine friendly and not so easily adaptable to search engines trends and my website not having these restrictions is designed for maximum search engine results in today's search engine warz. The strict factory marketing rules are making dealers dependent on lead source providers like Autobytel.com and others. Dealers must pay to compete online - it isn't cheap and they make a lot less per sale taking more time and effort to accomplish a single sale. My dealer can't advertise or market as I'm doing on my website either, so I decided to do it myself, but as an independent owner of a lead source provider website. I have no such restrictions as I'm not a dealer. Just like Autobytel.com my website is a licensed business (in the state of Washington) and is in full compliance of this state's laws - and just like with Autobytel.com my dealer receives leads from New-Nissans.com - but for FREE!

And this is what these dealers haven't figured out. I like them couldn't compete in my Nissan Dealer's name online with CarsBelowInvoice.com, InvoiceDealers.com, NewCarPrices.com, NewCarsInsider.com etc. etc.who all advertise and market using these very attractive terms that Nissan prohibits such as – Buy below dealer invoice. These sites also occupy all of the top search engine results and it is therefore rare for an online consumer to find a dealer site through search engines unless they use specific city names or dealer names - and even then it is difficult. These websites also degrade dealers and further alienate the consumers from dealers - making all dealers out to be a bunch of thieves. This is the best part - these websites are actually tactically creating a wedge in the marketplace hoping to permanently make both the consumer and dealer dependent on them. They now profit off of consumers fears and dealers dependence. All of these websites who market in this way are either owned by a more reputable lead source provider such as Autobytel.com. Or they sell leads at wholesale prices to websites like Autobytel. Some examples are like InvoiceDealers.com who is owned by dealix.com who is owned by Cobalt Inc. (the largest auto industry web host provider approved by all manufactures for auto dealer site hosting). So like Nissan dealers have only two choices of factory approved web hosts to provide and manage their websites - Cobalt being the biggest! Cobalt is approved as they are familiar and comply with any factory regulations keeping Nissan dealers in compliance with Nissan factory regulations. So Cobalt then has one of the largest lead source providers in the auto industry; dealix.com who owns InvoiceDealers.com who markets way out of factory compliance and then turns and charges auto dealers about $20 to $25 a lead.

Here's a good one - one of the complaining dealers in my area pays Autoweb.com for their leads - maybe $5000 a month or so in leads; Autoweb.com gets a lot of their leads from BuyingAdvise.com. Go check them out, this site is bent on punishing dealer profits and advertises all over the net using the phrase - buy new cars for $1400 below dealer invoice! Even a more extreme use of the term than I do. So why is this dealer complaining about my site? Because they haven't figured it out yet and I have! They know that I, a competing sales manager who works for a competitor own this site, and they somehow feel I am unfairly beating the system. They also don’t understand the chain and massive web of their lead source providers. This dealer has no idea, that he is paying a lot of money to beat his profits into the ground through an indirect source. This dealer is only concerned with me (a direct source) beating his profits into the ground.

Anyway, I thought this would be interesting to some of you.

tnbowhunter · 02-25-2005, 04:00 AM

I don't think that you are their enemy at all. They are their own enemy.
I recently tried to trade my wifes Xterra for an 05 model at the same dealership where I purchased my Titan. They left such a sour taste in my mouth that I will never be back.
When I am ready to buy that new Xterra you will be the first one I will talk to.
Good luck.

travism · 02-25-2005, 04:49 AM

I'm all for innovative ways to give consumers better deals and applaud you in your effort to do that. But it does seem like you have found a loophole in the way Nissan does business with it's dealers. I don't blame the other dealers for at least making Nissan look at it and see if it fits in the guidelines. If Nissan thinks that what you are doing is okay, then the other dealers can't do anything about it. If not, then you do have an unfair advantage and Nissan has a right to do businesss with it's dealers the way it wants to.

I hope it works out for you, as I'm sure almost all consumers would. But I just wanted to be devil's advocate for a second and remind everyone that we're getting one side of the story here. If Nissan decides against you then that will be a shame, but that's Nissan's right to do so. Flame away.

Cajun · 02-25-2005, 05:13 AM

I also have an online business. I also have been reprimanded for selling products for less than my competitors. Is free enterprise dead in this country???They cannot dictate your prices,. Federal Law prohibits setting prices, it is called "Price Fixing". If your supplier attempts to set your minimum price, it is caled Vertical Minimum Price Fixing, against the law..They may whine about the advertising practices, but, legally , they cannot dictate your prices. As for wining about where you rank on the search engines, maybe they should do their homework on search engines...By the way, how about linking websites and helping both our search engine rankings???E-mail me if you are interested....
info@super-chip.com....
Good Luck and God Bless
Danny

KL99SEA · 02-25-2005, 06:33 AM

Tell them to go pound sand....... In Sept my local dealer told me he wouldn't discount 04 Titans because the 05's don't come in till feb of 05.........I laughed and walked out. One email to next closest dealer had me under invoice! I wish you had been local......These dealers need to stop trying to take advantage of people and treat everyone fairly......what a concept. Hope you come out of this ok.

bestatchess · 02-25-2005, 06:41 AM

"Federal Law prohibits setting prices, it is called "Price Fixing". If your supplier attempts to set your minimum price, it is caled Vertical Minimum Price Fixing, against the law.."

Yeah, start mentioning stuff like that, maybe toss in "Sherman Act", "Clayton Act", "conspiracy in restraint of trade", "anti-trust". That should brush 'em back off the plate a bit.

QShip · 02-25-2005, 06:53 AM

That is the beauty of the open market. It allows the buyer to determine the worth of the product.

That's Econ 101.

bestatchess · 02-25-2005, 07:01 AM

Quote:

Originally Posted by QShip

That is the beauty of the open market. It allows the buyer to determine the worth of the product.

That's Econ 101.

Yes, and with the net, it gets alot closer to the "perfect information in the market" model.

falchulk · 02-25-2005, 07:06 AM

Quote:

Originally Posted by Cajun

I also have an online business. I also have been reprimanded for selling products for less than my competitors. Is free enterprise dead in this country???They cannot dictate your prices,. Federal Law prohibits setting prices, it is called "Price Fixing". If your supplier attempts to set your minimum price, it is caled Vertical Minimum Price Fixing, against the law..They may whine about the advertising practices, but, legally , they cannot dictate your prices. As for wining about where you rank on the search engines, maybe they should do their homework on search engines...By the way, how about linking websites and helping both our search engine rankings???E-mail me if you are interested....
info@super-chip.com....
Good Luck and God Bless
Danny

Its not price fixing unless competing brands conspire to sell similar products for not less then a specified amount. A MFG can dictate to its dealers what minimum price they have to sell their product for. The dealer follows the rules or they are no longer a dealer. Thats common practice in the marketplace today.

TOK · 02-25-2005, 07:13 AM

When I bought my truck, the salesman and sales manager must have reminded me 5 times to give them EXCELLENT ratings on the Nissan survey. They said Nissan really pays attention to the ratings and comments. If this is true, I'm sure you are getting a ton of EXCELLENT ratings for giving people such a sweet deal without the BS.

I was treated with respect, but my dealer had options listed on every truck which clearly weren't there. To me, that reflects WAY worse on Nissan than you offering a good haggle-free price.

Good luck!

falchulk · 02-25-2005, 07:22 AM

Quote:

Originally Posted by TOK

When I bought my truck, the salesman and sales manager must have reminded me 5 times to give them EXCELLENT ratings on the Nissan survey. They said Nissan really pays attention to the ratings and comments. If this is true, I'm sure you are getting a ton of EXCELLENT ratings for giving people such a sweet deal without the BS.

I was treated with respect, but my dealer had options listed on every truck which clearly weren't there. To me, that reflects WAY worse on Nissan than you offering a good haggle-free price.

Good luck!

My dealer did the same thing with the survey!!! They even called me twice to remind me. Funny thing is I never got the survey in the mail but the dealership sent me a hat and other trinkets to "bribe" me.

bestatchess · 02-25-2005, 07:48 AM

Quote:

Originally Posted by falchulk

Its not price fixing unless competing brands conspire to sell similar products for not less then a specified amount. A MFG can dictate to its dealers what minimum price they have to sell their product for. The dealer follows the rules or they are no longer a dealer. Thats common practice in the marketplace today.

The rules were relaxed by the Supremes in '97, but the ftc still pays lips service to anti-trust law:

http://www.ftc.gov/bc/compguide/illegal.htm

"Resale price maintenance agreements. Vertical price-fixing -- an agreement between a supplier and a dealer that fixes the minimum resale price of a product -- is a clear-cut antitrust violation. It also is illegal for a manufacturer and retailer to agree on a minimum resale price.

The antitrust laws, however, give a manufacturer latitude to adopt a policy regarding a desired level of resale prices and to deal only with retailers who independently decide to follow that policy. A manufacturer also is permitted to stop dealing with a retailer who breaches the manufacturer’s resale price maintenance policy. That is, the manufacturer can adopt the policy on a "take it or leave it" basis.

Agreements on maximum resale prices are evaluated under the "rule of reason" standard because in some situations these agreements can benefit consumers by preventing dealers from charging a non-competitive price."

Quad T · 02-25-2005, 07:50 AM

new-nissansDOTcom, good luck with this issue. As someone in the advertising field I just see you as a hardworking innovative kind of business owner, and I see most dealers as something way less flattering...

falchulk · 02-25-2005, 08:18 AM

Quote:

Originally Posted by bestatchess

The rules were relaxed by the Supremes in '97, but the ftc still pays lips service to anti-trust law:

http://www.ftc.gov/bc/compguide/illegal.htm

"Resale price maintenance agreements. Vertical price-fixing -- an agreement between a supplier and a dealer that fixes the minimum resale price of a product -- is a clear-cut antitrust violation. It also is illegal for a manufacturer and retailer to agree on a minimum resale price.

The antitrust laws, however, give a manufacturer latitude to adopt a policy regarding a desired level of resale prices and to deal only with retailers who independently decide to follow that policy. A manufacturer also is permitted to stop dealing with a retailer who breaches the manufacturer’s resale price maintenance policy. That is, the manufacturer can adopt the policy on a "take it or leave it" basis.

Agreements on maximum resale prices are evaluated under the "rule of reason" standard because in some situations these agreements can benefit consumers by preventing dealers from charging a non-competitive price."

Exactly what I said. Its up to the MFG who the dealrs are. If they dont follow the rules they get the boot.

Cperki1 · 02-25-2005, 08:56 AM

I have to deal with dealers that have added mark up on EVERY car. What a joke. The GM cars all have $3K to $5K rebates on them and the local dealer add 2G's in markup. THAT is funny. The reason why? California residents MUST buy new cars in Cali, or we get RAPED by DMV for SMOG fees. I woud love to buy from newnissans.com, but I would have had to pay over $3500 in smog fees.