5 Signs That Direct to Consumer Model Could Be a Reality


It's no secret that the current state of the automotive industry is in flux. Manufacturers are looking for ways to cut costs and increase profits, and one of the methods they're exploring is going direct to consumers. While this model has been around for a while, it's never been more viable than it is now. Here are five signs that the Direct to Consumer model could be a reality for you.


Manufacturer Investment in Online Sales

The pandemic has probably impacted your business in one way or another. Perhaps you've had to close your doors temporarily, or you see a decrease in sales. In any case, it's critical that you stay ahead of the curve and prepare for the possibility of a Direct to Consumer (D2C) model.

What is the D2C model? It's a business model where manufacturers sell products directly to consumers, bypassing dealerships and other intermediaries. Technological advancements have made this shift possible, and manufacturers are starting to invest more and more in online sales channels.

Why is this such a big deal? For one, it eliminates the need for expensive marketing and advertising campaigns. Second, it allows for more direct communication with consumers, which can lead to better products and customer service. Finally, it increases profit margins for manufacturers, something they haven't been too happy with lately.

If you're not prepared for the D2C model, your business could be in trouble. Manufacturers are already making preparations to move in this direction, and it's only a matter of time before they do so. Are you ready?


Manufacturer Incentives

It's no secret that the manufacturers of your products are unhappy with the profits dealerships have made since COVID. As a result, they are threatening to go direct to consumers. This could mean big changes for your business.

You need to be aware of the incentives manufacturers are offering to dealers who agree to move to a direct-to-consumer model. Some incentives include free shipping, preferential product placement on the manufacturer's website, and even cash payments.

If you're not prepared for this change, you could quickly find yourself out of a job. Be sure to keep an eye on the news and stay ahead of the curve.


New Online Retail Platforms

You may have seen some new retail platforms popping up lately.

These D2C platforms are a threat to the traditional dealership model. With no middleman, manufacturers can sell directly to consumers and bypass the dealers altogether. This could mean big changes for the automotive industry—and not necessarily for the better.

Dealerships have been making a killing since COVID, as demand for cars has skyrocketed. But manufacturers are getting tired of seeing such little profits from sales. They're threatening to go D2C, and that could mean big changes for the industry.

It'll be interesting to see how things play out in the coming months. Stay tuned.


Growing Consumer Preference for Online Shopping

Consumer preferences have been shifting for a while now, but the pandemic has only accelerated this trend. More and more people are doing their shopping online, and this includes big-ticket items like cars.

And it's not just cars—this shift is happening across all industries. So what does this mean for manufacturers? Well, it means that they need to be ready to sell directly to consumers if they want to stay competitive.


Changing Attitudes of Car Companies towards Direct Sales

Car companies have long been hesitant to sell their vehicles directly to consumers, preferring instead to use dealerships as a middleman. However, that may be changing in the wake of the COVID-19 pandemic.

Manufacturers are increasingly unhappy with the profits that dealerships have been making, and as a result, they are threatening to go direct to consumers. This would be a major shift in how cars are sold, and it could significantly impact businesses in the industry.

There are signs that manufacturers are serious about this change. Some companies have already begun selling cars online, and others have made moves to cut dealerships out of the equation entirely. 


All in all, it seems that the manufacturers are serious about the Direct to Consumer model and taking steps to make it a reality. As a business owner, you need to be mindful of these changes to adapt your strategies accordingly.

When it comes to automotive consulting, dealership training, and F&I goods and services, Vanguard Dealer Services has been a frontrunner since 1999.


Knowledge powers your profits.

Our Road to ROI newsletter is a free resource with valuable advice and industry news - published every month. Subscribe now and stay up to date on everything you need to improve your bottom line.