How to Pick a Vendor

Walking the floor of the National Automobile Dealers Assn. convention last month, I wonder how dealers feel as they weave up and down the aisles featuring products and services

The expo has some impressive booths, impressive sales people and offerings. But how does a dealer evaluate a prospective vendor? Is it based on the size of their booths, the lavishness of their party, the quality of their give-aways or that they have a half-dozen smiling models in short skirts.

Many vendors will pull out all the tricks to connect with potential clients. After all, connecting with dealers is the primary reason for the expo. It is an excellent venue for dealers to see the latest and greatest products the industry has to offer.

However, with the flood of competing products and services, how is a dealer to know what the best product may be?

Also, what if a vendor does not have a presence at NADA? Is that vendor less of a player? NADA expo exhibitors only make up a small percentage of the total vendors in the industry. There are numerous reasons a vendor may choose not to exhibit. For some, it is a question of economics and available personnel resources. But for others, it is a matter of connecting with target clients in the NADA convention environment.

As a vendor who has exhibited at NADA, I have observed other vendors as they have worked to generate leads, and the experience has in many regards mirrored that of watching singles working the floor at a nightclub.

People will stake out their zone, keep an eye out for attendees with dealer-designated name tag, and then move in with a quick line or a blinking bouncing ball.

While this approach can be effective, unless the dealer already knows what and from whom he is buying, he will really not know who he is getting involved with.

This general process of choosing the right vendor has always been perplexing. Having visited hundreds of dealers over the past 16 years, I can say the process by which dealers select, negotiate and engage with vendors can be dysfunctional.

The reason for this is simple:

Dealers operate in a highly competitive environment. They continually look for the edge over the dealer down the street. Given the competitive environment, most dealers do not communicate with each other regarding vendors.

If you visit 10 different dealers on any city's auto row, you will find they are in the dark about which vendors their neighbors use, let alone how their neighbors might rate their vendors.

The same general principle applies if you travel farther away. Dealers 100 miles apart or 1,000 miles apart are not sharing vendor information and results.

Even in 20 Groups, sometimes the exchange of information regarding vendors is not as open as it probably should be.

Given the revenue dollars that dealers generate, our industry attracts vendors from other retail sectors who believe they understand the needs of dealers and are looking to cash in.

While the premise of dealer operations is simple (sales and service), many vendors fail to understand some very complex dynamics in the actual execution.

Here are three questions to ask when researching vendors:

As flashy as some NADA exhibitors may be, it is important not to take your eye off the ball when it comes to selecting the right vendor, even if it's a blinking bouncing ball.

Phil Villegas is a Principal at Dealer Transactional Services, LLC. (an affiliate of Morrison, Brown, Argiz & Farra, LLP) in Miami, Florida. He can be reached at [email protected] or 305-318-8515.

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