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Business Resolution To Shipping Delays

532 Views 5 Replies 4 Participants Last post by  MJS73
Hi All. This random, but I'm always thinking about creative solutions to business problems. Feel free to correct my understanding of the below process.
  • My general understanding is that once a vehicle has been completed the factory invoices the dealer.
  • The dealer pays the factory and they release the car for transit to the dealer.
  • The vehicle gets to the dealer, I pay the dealer, and they transfer the car to me.
Why do dealers pay an invoice, only to then have that outlay sit on their books while cars sit idly in a lot somewhere or meader their way to the dealer? The incentives to get a car delivered are removed from the factory once they get paid. If dealers didn't pay the factory until that car hits their lot you'd better believe the factory would figure out these shipping delays right quick as the money would now be sitting idle on their books.

Same reason why you or I wouldn't pay the dealer until it's sitting on their lot.
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I thought that cars were given to dealers for "free" for a while. Then, if they don't sell them in a certain time, they pay money back to them.
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