AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

Changing economic circumstances Forsaking the RRP in the pursuit of

11th April 2013, Page 35
11th April 2013
Page 35
Page 35, 11th April 2013 — Changing economic circumstances Forsaking the RRP in the pursuit of
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

sales and tying down the customer is a dangerous road to go down Selling something used to be a simple process.

As Proposition Joe from the HBO series The Wire explained: "Buy for a dollar, sell it for two."

Such simple economics no longer work in a road transport sector driven by cut-throat competition and a willingness to place personal gain over the collective good.

Dealers continually rip up the RRP to achieve two ends: get the buyer to use its workshop and remove the buyer from circulation.

The RRP is more of a guide and, as dealers seek buyers in an ever-dwindling market, more switch to the bigger picture by putting together a lifetime package. This includes making sure the truck goes through the dealer's workshop, guaranteeing maintenance, repair and servicing, as well as a captive parts source.

New truck sales teams up and down the country sacrifice margins and sell trucks at a loss, often at the behest of the MD or dealer principal, to allow the collective package to produce a margin.

More interesting is the theory that you remove the buyer from circulation for around three to five years, stopping them from looking somewhere else for a truck. Easy to do with smaller operators, not so easy with bigger fleets where economy of scale is a factor.

Still, the theory is there and, providing you can wash your face with the deal at the very least, dealerships seem willing to do it.

Selling products at a loss is a dangerous road to go down, and using the workshop to supplement the deal is the thin end of the wedge. Truck sales teams need to stand their ground and revert to the RRP — it's there for a reason. Otherwise the sector repeats the mistakes made by hauliers looking to sell their services. And we know where that leads.


comments powered by Disqus