I have been in retail all my life. I have been working, and sometimes fighting, with manufacturers these past 40 years. This issue is difficult for end users to understand, but I will give it a try.
The issue is one of control. When a manufacturer has hundreds or thousands of dealers the manufacturer is in control.
MasterMech
...but Stihl needs to look at it from the end user's perspective. You are somewhat pissed at Deere for doing what they did, but what they did is essentially get rid of the mom and pop stores on the low end stuff, which I am fine with. Would be fine with Stihl doing homeowner saws in the big box stores and mid to pro level saws via dealers or internet sales. Stihl's profit on the saws would be exactly the same even if they changed their business model.
(emphasis mine)
In practically no case would this be true. Control shifts from the manufacturer to the big box retailer When Lowes or Cabelas or Petsmart or (God help you!) Wal-Mart is buying 50%-70% of your output the retailer determines what you make and at what price you make it. They do not need the manufacturer: Echo, Shindaiwa, Toro, and many others will fill their shelves for them. Others will gladly slap their label (Homelite, McCullah) on something Chinese. The manufacturer in these situations becomes absolutely dependent upon the big box retailer, however. And it is a one-way street - once the dealers are gone, they are gone. It would take many years to rebuild a dealer network from scratch and almost no manufacturer is big enough to survive the attempt.
In the end, the customer who actually appreciates the brand is the one to lose. Parts become unavailable. Selection becomes reduced. Quality usually suffers as the buyers at the big retailers can see no reason why one brand should be 50% higher in price. Often the manufacturer ceases to make anything at all and becomes just a label.
Dealerships are a headache to such manufacturers, to be sure. Some dealers are ignorant. Some are inept. It takes a huge amount of resources to try and keep dealers who will represent the product properly, but the alternative is usually death. The best example I can think of is Maytag. They once sold the best appliances made only though dealers. Then they decided Montgomery Wards would give them a few more unit sales. The dealers were gone in five years. In another ten Maytag was nothing but a contract builder for the big box stores. Today Maytag is just a label applied to Whirlpool products. Anyone remember Magnavox? Same thing. Justin boots, Delta tools, now just labels.
The problem is that Sears, or Lowes, or Bass Pro will not make a brand. They will only use it. To build a reputation for quality takes people out there on the sales floor showing and explaining why you, the customer should pay substantially more for this product rather than the cheaper one. This puts the onus on the manufacturer to deliver, of course. There are many examples of once-revered brands sold only through dealers that are gone, or at least in trouble. Avon products come to mind. Schwinn bicycles. Lawn Boy.
And yet the need for on line presence is still there. What some companies are doing is to set up internet systems that will credit sales to participating dealers. This would allow you to purchase an item on the internet, yet the dealer in your zip code gets the sale less some kind of fee.
