Frequently Asked Questions
What is Dealers United?
Dealers United is a network of retail automobile dealerships that have joined forces to create a collective buying power allowing them to compete with the MegaDealer Groups.
How does Dealers United work?
Our member-dealers identify a specific product/service they desire - or a particular "pain point" in their dealership - and the Dealers United team goes to work for them. Each month, Dealers United will research a specific product/service (CRM, SEO, SEM, Social Media Management, Websites, DMS, etc.) to identify the best possible solution for our member-dealers. Then, we negotiate the best overall deal with better terms and conditions and a stronger Service Level Agreement than any dealer can negotiate on their own.
How will you know it's the "best deal?"
Even the largest MegaDealer Group won't offer a potential supplier the dealer count of Dealers United. By leveraging the buying power of all our member-dealers, Dealers United is expected to always be able to negotiate huge savings and fair terms and conditions - the kinds of terms and conditions the MegaDealer Groups have been negotiating for years.
How much does it cost to join?
Dealers United is a free service to dealers. There is never a cost to join, nor any obligation to remain a member - ever.
If it's free, how does Dealers United make money?
Dealers United operates much like an advertising or travel agency; in that we receive a percentage of each deal purchased. Because every deal is different and every vendor agreement will require varying levels of technical support and expertise on our part, the percentage we make off each deal will vary greatly. That said, even with our cut, the net price paid by our member-dealers will be significantly below what the exact products/services would cost them if they had to negotiate on their own. Additionally, the vast majority of the contracts we negotiate will allow dealers to participate on a month-to-month basis. This gives you the MegaDealer advantage of lower prices and flexible terms.
How can I be sure you won't choose vendors based on what they pay Dealers United?
Our industry is chock full of snake-oil salesmen (it's one of the reasons we created Dealers United); and dealers are getting taken every day by these guys. Our mission is to find the best of the best in every category and negotiate price, terms and conditions only after we've properly vetted the suppliers. We would not be in business very long if we did it any other way. Finally, our deals will prove our worth to our member-dealers. Every member-dealer is free to shop our pricing, terms and conditions with any vendor they choose (including our selected vendors).
If I'm a member-dealer, do I have to buy every deal?
No. In fact, member-dealers are never required to accept any Dealers United deal.
At the end of every month, Dealers United will distribute an informational video and specifics of the upcoming deal to all members. The video will not only describe the deal, but it will go into great depth to educate you about each vendor providing this product/service. We will demonstrate what success looks like, what to watch out for, and why Dealers United chose the specific vendor for that particular offer. Each dealer may then individually decide whether they want to participate in the given deal or not.
How do you guarantee savings?
The ability to negotiate better terms and pricing with vendors depends heavily on the volume you purchase. A MegaDealer Group can negotiate better pricing with vendors due to the volume they buy. Dealers United achieves the same results by bringing together a large network of private dealers - a network bigger than even the biggest MegaDealer Group can deliver.
Are there other benefits to being a member?
Besides great pricing with better terms and conditions, Dealers United members also benefit from our expertise and extensive supplier vetting process. (Think of Dealers United as your Corporate eCommerce Department - just like the ones employed by the MegaDealer Groups). Because Dealers United will research and validate vendors long before presenting the best deals to our members, we save you time and allow your team to focus on what you do best: selling cars.
I'm a vendor; how do I join Dealers United?
The short answer is you can't. We choose our suppliers based on the needs expressed by our member- dealers, and only after a long vetting process. However, we are interested in hearing from honest suppliers interested in delivering World-Class products at fair prices to our member-dealers. If this describes your business, please visit our vendor info page.
What prompted you to start Dealers United?
Founders Jesse Biter and Matt Buchanan began Dealers United after being faced time and again with some very scary facts. For example, in 1990, there were just over 900 dealerships that were part of what we call MegaDealer Groups. Today, there are around 1,400. That's more than a 50% increase in only 20 years! Over this same period of time, total dealerships decreased by 35%.
This essentially means that the MegaDealer Groups are getting bigger while the private and independent dealerships are continuously getting smaller in terms of overall market share (and industry influence). We felt like we needed to do something before there were no more private dealers left in the business.
I'm doing okay right now. Why should this matter to me?
As the MegaDealer Groups' market share continues to increase, they gain even greater competitive advantages that allow them to run even more efficiently than Private Dealers. They are able to do this because they continuously leverage their power in numbers to realize additional savings. In turn, they are able to take these savings and reinvest them into additional training, upgraded facilities, bigger inventories, additional advertising, and much more.
Just because you've not yet been targeted does not mean that you won't. The MegaDealer Groups can only grow at the expense of othersâ€¦ and this means the Private Dealers who try to go it alone will always be at an ever-growing competitive disadvantage.
Isn't it enough that their size already allows them to have lower administrative and employee costs (like health care), and access to larger and often cheaper inventories? Join Dealers United and start leveling the playing field.
Do you really think the MegaDealer Groups will continue to grow their market share?
We not only believe this will happen; we're pretty sure it's going to happen at an even more rapid pace. Not so sure? Take a look at the history: the first MegaDealer Group went public in 1996 with just 0.4% market share. In 2009, the market share of just the publicly-traded MegaDealer Groups soared to 7.3%! That's a 1700% increase in only 13 years! How long before they hit 15%? 30%?
How are the MegaDealer Groups able to grow so fast?
The short answer: They have CASH! Right now, many dealers have been reading about how big groups are in an acquisition mode. This is because they all have the cash to do it - even after the great recession we went through the past few years. Additionally, since banks are not back to "normal" lending levels, they are requiring much more capital to buy dealerships; which makes it a perfect time for MegaDealer Groups to gain market share.
What happens if MegaDealer Groups' market share continues to increase and they become even more efficient as they grow?
The question should not be "if" but rather when. Independent dealerships and small dealer groups are essentially frogs in warm water. Currently, the market share that publicly-traded groups have is not a major threat to the industry. However, years down the road it absolutely will be, and it will be too late to recover from if nothing is done to level the playing field.
What does this mean for our industry?
Think Wal-Mart. Yes, Wal-Mart. Think about Wal-Mart, because this is where our industry is headed whether you want to believe it or not. It is almost next to impossible to compete any longer in the general merchandising industry unless you are a big company like Wal-Mart or Target. Private groups or family-owned general merchandising stores cannot compete with these big companies any longer due to major differences in the cost of doing business between big groups like Wal-Mart and smaller family- owned businesses. In our own opinion - and through our research - the auto industry is slowly beginning to mirror what happened to the general merchandising industry over time.
It is not happening overnight, but it is happening; and the facts prove that market share gains of the big public groups are on the rise and will continue that way. You can wait until it happens to you like the local hardware store did, or you can decide today to do something about it.
What can dealers do to keep their cost of business down and stay competitive in this industry?
There is not an exact silver bullet to remedy this situation, but Dealers United was founded on the premise of educating dealers first on this situation. Secondly, Dealers United came up with a plan to help dealers fight this cause and ensure that there will always be an opportunity for family-owned and operated stores to compete with the MegaDealer Groups.
Dealers United has created a system to help dealers significantly reduce their vendor expenses by combining the purchasing power of many dealerships across the country, and giving the savings back to the dealer. This will allow our dealers to invest these savings back into their businesses to help them run more efficiently - all at no cost to the dealer. Just knowing what the MegaDealer Groups pay for identical products, we're confident you can expect to see vendor savings 20-75% below what you pay today.
Can a dealership go back and sign up with previous negotiated vendors or is there just one chance each month to sign up with one vendor?
Once the deal closes, it's closed. We will keep our informative video about the deal up and Dealers United members will have access to that video, however the terms of the deal will be removed once the deal closes. This is to protect the vendor's future sales.
Sounds like a no brainer. Why wouldn't a dealer sign up?
It's definitely a no brainer for a dealer to signup. As a Dealers United member, you will be able to look at our deals and if you buy, great, if not, you can ignore that deal and wait for the next deal. You won't have to pay a dime for access to our deals.