Keyword: car buying

Here’s a quiz for you: who has more retail outlets — Starbucks or General Motors (GM)?

If you listen to all the late night comics with their shtick on Starbucks and how there’s one on every corner, you think you know the answer.  Well, you’d be wrong.  Starbucks has about 6,300 company-owned stores and GM has almost 7,000 dealerships.  Wow…

Now this is just a little unfair, Starbucks has another couple thousand franchise locations inside places like grocery stores and theme parks.  And GM owns virtually none of their stores.  But the fact that the numbers are even in the same ball park is stunning to me.

I wrote a couple of months ago about what a terrible experience buying a car is, and the toll it takes on the people who have to do it for a living (see that piece here).  And about how the differences between the retail experiences can be easily seen here.

Simply put, buying a car is the worst shopping experience that you can have.  Bar none.  And people with any scruples find it impossible to work in the business for very long.  It’s a sick business that someone needs to change.

I don’t mean to pick on GM just for the excess of dealers.  A piece in the Wall Street Journal today (subscription-only link here) points out that none of the US automakers are immune from this issue.  All the “big three” have well over 2-1/2 times the number of dealers per point of market share of Toyota, for example.  Perhaps that (and this) explains why Toyota is doing so well, and eating Detroit’s lunch.

I think this excess of dealers is one good reason for the problem.  Too many dealers chasing too few customers.  And it leads to a fetid culture of sleeze-ball sales tactics, terrible service, and lousy margins.  It’s little more than vultures preying on the few customers there are.

Starbucks has nothing in their store that costs over $250, and the vast majority of sales are under $10.  I don’t know for certain, but I would have to imagine that their average transaction is in the $5 range.  This just begs for a lot of outlets, to make the impulse purchase easy.

GM, on the other hand, probably has an average transaction around $10,000.  I don’t know many people who decide on a whim to just drop by the Cadillac store and pop for a new $60,000 Escalade.  Or stop in for a quick brake job.  Why on earth do they need so many stores (or brands, but that’s another story)?

If the new purchasers of Chrysler, Cerberus Capital Management LP, want to really make an impact on the car business, they could start here.  And rumor has it, they are going to — by combining all the Dodge, Chrysler, and Jeep dealers together.  It’s a good start.

I had to buy a new car yesterday.  Interesting that I said “had to”, isn’t it?  Pretty much sums up the state of the car buying experience these days.  Despite all the potential for fun — lots of new shiny toys, all the options in the world to choose from, flashy ads from the car companies, the ecstasy of driving home in that new car smell — car retailers work furiously to take all the joy out of the process.

I used to have a nasty new car addiction, about half of the reason I kicked the habit was the pain of dealing with the dealers.  I’m just over it, and I’m now driving a seven year old car with 100,000 miles on it.  The car I bought yesterday was for someone else, or I wouldn’t have been caught dead in a dealership.

You see, when it comes to bargains, I’m not much of a hunter, I’m more of a gatherer.  I’ll do all kinds of research so I know what a good price is, but if I have to fight for the price, it’s just not worth it.  This makes me a lamb to slaughter in a car dealership.  And they seem to sense it.

The whole experience is just rancid, and set up to make it absolutely horrible for the customer.  It begs a lot of questions:

• Why is it considered OK that ten different people would pay ten different prices for the exact same item, based solely on their skill at this silly game?
• What happens to people who either don’t understand the game or can’t play it at all?
• Why is it that you don’t even negotiate with the person directly, but send your representative (the salesperson, who is on the other team) into a mysterious back room to negotiate on your behalf?
• Why is it that you have to threaten to leave before you have a deal?
• Why is this the only retail experience like this?  You don’t buy groceries, or appliances, or even a house this way.
• How did the process get this way?  Who came up with this process that is exactly the same in every dealership?
• Why can’t anyone really change this terrible experience?  Companies have tried (Saturn, Lexus) but it never sticks, and just rots into this same fetid mess.

But even these aren’t the questions that got me to thinking yesterday.  I wonder about the people who have to live in this festering boil of a work environment, and what it does to them.

As I was pacing waiting for yet another deal volley over the net to be returned, I was asked by another salesman if I was “having fun, yet”.  I replied: “I’d rather be at the proctologist’s.  I don’t know how you can do this for a living.”  He said: “It’s my third day.”

What struck me was the way he said it.  It was a combination of shame, humiliation, and resignation.  Although I can’t say from experience, I would imagine you’d get the same answer from a new prostitute.  I immediately thought, how sad.

Now that I think about it, I’ve never met a car salesperson who didn’t aspire to something else.  Well, there are those who take a perverse glee in this sick game.  But they aren’t common.  Most just seem to be there until they get something better, or just something else that doesn’t involve french fry oil.

The whole car buying experience, and the people in it, is so wrong.  Even the latest innovation of getting multiple bids on-line is just a mask for the problem, as soon as you enter the dealer’s lair, you’re meat.  How come some creative company can’t fix the whole thing?