Voices |
iRV.com--A New Industry Player That May Hurt Every Dealer's Bottom Line by Dan Holt By now you've read Don Magary's editorial and Tom DeWalt's "Voices" articles, and hopefully you're finally realizing there are a lot of people out there bent on taking the profit out of virtually every department in your dealership. And if they can, they'll put you out of business. The Internet age has brought a new company, iRV.com, into the RV industry, which it appears intends to focus on selling RVs through the Internet as well as through a chain of RV dealerships which it plans on acquiring. What we've learned from several dealers who have phoned, mailed and faxed copies of iRV.com's pitch, as well as from our own preliminary research is, it would seem, the company is requesting RV dealers submit their lowest possible price in order to sell a unit to a consumer through the iRV.com Internet site. Just the opposite of an auction where folks bid on product, dealers must bid to sell product at the lowest possible price to the consumer. This sounds like a broker gone mad. We're experiencing the highest sales and shipment figures since the late '70s, and unlike that period, it would appear the market will continue in a positive direction for several years to come - as long as baby boomers are of RV buying age. Why then, would you consider making a sale at the least possible profit margin, and also pay iRV.com somewhere between $248 and $548 for the privilege. Certainly if the company does acquire dealership/s, as we understand the plan, they won't be selling units at bare bones prices if they plan to stay in business very long. Should you participate in the iRV.com program you may be funding your own demise. RV News has tried to piece together some background on the company since none of the principals appear to have emerged from established RV companies. The RV News investigation shows that in February, Southshore Corporation, Colorado Springs, CO, completed the acquisition of RV Holiday.com, Inc (RV Holiday). RV Holiday, also of Colorado Springs, is a company established to apparently engage in the development of an Internet portal site for RV enthusiasts as well as in acquiring RV dealerships nationwide. Prior to the acquisition, the Southshore Corporation was incorporated in 1990 and from 1992 to April1999 had been engaged in the operation of a water park located in the Southeast Denver Metropolitan Area. The park property was sold in April1999. From that time until the acquisition of RV Holiday, Southshore apparently was not engaged in any business. The actual structure of the RV Holiday acquisition is a little difficult to follow, but in general a wholly-owned subsidiary of Southshore (Southshore Acquisition Corp.) was merged with RV Holiday and 5.5 million shares of Southshore common stock was issued to former shareholders of RV Holiday. Following the merger, RV Holiday.com, Inc. changed its name to iRV, Inc. iRV, Inc. operates as a wholly owned subsidiary of the Southshore Corporation. iRV, Inc. has two wholly owned subsidiaries: iRV.com, Inc. and iRV Dealerships, Inc. iRV.com, Inc. has developed an Internet website for RV enthusiasts which is expected to be launched in the near future. iRV Dealerships, Inc. is engaged in acquiring one or more dealerships which will operate in conjunction with the Internet website. iRV Dealerships, Inc., through a wholly owned subsidiary, currently operates under an agreement to manage Coach and Camper of Knoxville, Knoxville, TN, as a precursor to acquiring the dealership, which at presstime was expected to close soon. The dealership's name will then become iRV - Knoxville. The dealership general manager is Don Hanney II, formerly associated with Rexhall Industries, Inc., and Safari Motor Coaches. After the closing the current directors of Southshore appointed three new directors of Southshore which were designated by RV Holiday. They were Dr. Robert A. Scott, Dr. Wayne R. Kirschling and John Deufel. The only person with RV industry experience is John Deufel, president of iRV, Inc. Deufel, age 46, was president of RV Holiday since its inception in August 1999. During 1999 he also worked in a sales capacity for Lazy Days RV in Florida. Prior to that he was involved in the RV and boat storage business and in the insurance business. Dr. Robert A. Scott, age 60, is president, chief executive officer and Professor of Sociology and Anthropology at Ramapo College of New Jersey, a public liberal arts college, with graduate programs in business (including e-commerce), computer science, educational technology, and liberal studies.. Dr. Wayne R. Kirschling, age 57, serves as president of Ontario Corporation, a closely held Indiana corporation with corporate headquarters in Muncie, IN. He also serves as executive vice president of Pyromet, a subsidiary of Ontario Corporation. Ontario engages in the manufacture and refurbishment of components used in jet engines; the manufacture and refurbishment of components used in semiconductor process equipment; provides metallurgical, chemical and environmental laboratory testing; develops software and systems for enterprises involved in collections and accounts receivable management; and is involved in the development of an industrial park. While some strongly disagree, iRV.com is the RV dealers solution to making money on the Internet According to iRV.com, the Internet company provides the RV dealer the daily opportunity to sell additional RV units to customers throughout the nation without increasing staff and advertising dollars, or extending operating hours. While iRV.com claims it is a group of RV professionals with over 50 years of combined RV experience, we could only find Deufels' few months at Lazy Days as evidence of any RV experience. Their program works by a perspective buyer logging onto iRV.com and completing a purchase request form. At this point this process costs the consumer $49, ensuring only serious offers, according to iRV.com. At that point the offer is reviewed by iRV.com for its authenticity and then sent via e-mail to every participating dealership throughout the country that carries the specific model that the customer wants to purchase. The potential buyer then must pay iRV.com another fee to see the quotes from dealers. These fees range from $248 for sales up to $25,000; $348 for sales from $25,001 to $50,000; $448 for sales from $50,001 to $75,000; and $548 for sales over $75,000. Then the dealer that wins the sale through this bidding process must also agree to credit the user's fee ($248 - $548) back to the consumer if the sale is consummated. Remember, iRV.com pocketed the original user fee. According to iRV.com's pitch to dealers, "There is no cost to you, only the opportunity to increase inventory turns, reduce flooring costs, move slow-moving inventory, and smooth out seasonal fluctuations." What about the $248 - $548 the dealer credits back to the consumer? So there is in fact a cost, contrary to iRV.com's pitch. iRV.com plans to emulate on-line automotive companies such as priceline.com, autobytel.com and autonationdirect. com. iRV.com has registered a variety of domain names including:
Most RV dealers that RV News queried about iRV.com's solicitation to participate do not plan to get involved with the company. And some, such as Tom DeWalt, saw this intrusion into the RV industry as a major threat to the traditional RV dealer. This is more than a threat to you the dealer, it's a threat to the unfortunate consumer who buys a radically discounted unit and then expects you to provide service and warranty work. Programs like this have the potential of undoing all the hard work and positive results of the Go RVing campaign. Any consumer who believes he's gotten a bad deal is going to pass the word on to anyone who'll listen. And, by using the Internet, negative postings will reach hundreds of thousands of RVers, and more importantly first time buyers almost immediately. iRV.com has solicited RV America to purchase banner ads. We do not believe their program is in the best interest of our customers, or the industry. We turned them down. Change is inevitable, but not all change is positive. iRV.com's approach, while innovative, will only reduce your eroding profit margins. It makes absolutely no sense to us that any dealer would support this outrageous solicitation. iRV.com is your competitor, not your partner.
|
