Territorial disputes!

I wanted to take a second to follow up about the dealer buy in.  We already discussed in prior posts that the dealers have to do a large purchase up front and sign a dealer agreement to become dealers for some of the better premium products.  Part of that agreement is to warranty the product a certain way, maintain a minimum margin on the sale of certain products etc.  Part of that dealer agreement is also a territorial agreement, that they will not sell the product to another retailer in your backyard. It helps to prevent a bidding war and show the dealer that the manufacture cares.

    In the last year we have had two dealers violate the dealer agreement.  This leaves the retailer with a bad taste in there mouth and a difficult position to be in.  A retail has the responsibility of not just selling themselves as a reputable place to do business, but also to build the industry and the consumers interest in the industry.  Last, but not least they need to buy the product that will work the best for the customer and help create excitement for that product.  When a deal asks you to do a big buy in and then saturates the market with dealers it hurts the shop, and ultimately the customer.  If the store can not provide them with the product they need, then they eventually will not be able to afford the best and most knowledgeable staff, and the industry with good marketing.  

    I am talking to you viper, Matts and Kenwood Excelon