Flaw in Fords allocation system?

[Loffredom]

I’m trying to figure out fords allocation logic, maybe someone can provide some more insight but I’m having a hard time figuring out how Fords current system will work out specifically for small allocation dealers

My dealer is a small mom and pop dealership and when I placed the order they showed me the list and there were probably a good 50-60 hybrid orders and 15-20 ecoboosts ahead of me. When I called my dealer a few weeks back to see how everything is going he said that he hasn’t seen a Mav come in for weeks. I’ve even heard of some dealers getting NO allocations for some months.

How are small dealers with way more orders proportionate to allocations supposed to fill all of their orders? I’m assuming the allocation amount can change from month to month but for each month that goes by just means less time to fill all the orders (ex if they are getting 5 per month and have 30 orders left by September they aren’t getting a 30 allocation month) Do large allocation dealers just suck up all the earlier allocations and then small dealers get backloaded for the end of the year?

I’m also assuming that larger allocation dealers will get a lot of their constrained builds built since they get more in general and will leave smaller dealers with more unfilled constrained orders because of this. Ex: if one dealer with 200 orders gets 20 per month and 8 constrained and one with 100 orders gets 5 per month with 2 constrained. (Bigger dealer gets a larger % built)

this also explains why there are a ton of instances where someone who ordered months after someone else gets their vehicle way before some people even get an order date.

I just don’t see a way they fill all of the orders with they way the current system is set up and it seems like most of the orders for large allocation dealers are frontloaded and smaller dealers will be backloaded, which means higher likelihood that get pushed to 2023 will be mostly if not all smaller allocation dealers?

Correct me if I’m wrong but is that not how the current system setup? Unless there’s something I’m missing

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[Mag Maverick]

If someone does figure it out please let me know I have a great dealership but a very poor Ford representative he has yet to give my dealership a single hybrid allocation not a single one that's B.S. yet other individuals with later order dates have got my same exact I say exact truck up to two and a half months later order dates.

 

[Loffredom]

If someone does figure it out please let me know I have a great dealership but a very poor Ford representative he has yet to give my dealership a single hybrid allocation not a single one that's B.S. yet other individuals with later order dates have got my same exact I say exact truck up to two and a half months later order dates.

lack of transparency from Ford and dealers

 

[MikeInFla]

From what I understand allocations are a pretty basic concept for Ford and only one guy handles them all. Here he is hard at work with the Thursday emails:

 

[Decayed]

Yes, the allocation system seems to be all screwed up. Ford has a secret formula they use for determining who gets what when. Your original order date is part of it, supply constraints are also a factor. It is not a simple first in first out system with order. When did your place your order and what packages did you select. Hybrids have been really backed up.

 

[Scott Asheville]

The allocation system works exactly is it is supposed to work and has always worked. Ford wants to sell vehicles in high volume. High volume dealers achieve that end. Ford rewards high sales with high allocations. You produce more hits, you get more at bats.

As a small dealer customer (50+ orders, very few allocations) who's probably gonna wait another year for my lux XLT, I just acknowledge that's the way it works. Life is a bitch sometimes.

 

[Loffredom]

Yes, the allocation system seems to be all screwed up. Ford has a secret formula they use for determining who gets what when. Your original order date is part of it, supply constraints are also a factor. It is not a simple first in first out system with order. When did your place your order and what packages did you select. Hybrids have been really backed up.

I ordered an xlt ecoboost in November and I originally had the Lux package but was removed about a month after. No other constraints. When I ordered at the time the general consensus that I saw from other orders was that the turnaround time was about 3-5 months for an ecoboost since they had less supply chain issues and now 5 months is looking like a best case scenario. I would have hoped to at least gotten a build date 4 months in

 

[Dun4791]

…

 

[TNBubba]

If someone does figure it out please let me know I have a great dealership but a very poor Ford representative he has yet to give my dealership a single hybrid allocation not a single one that's B.S. yet other individuals with later order dates have got my same exact I say exact truck up to two and a half months later order dates.

What part of the Great State of Tennessee are you located? I'm in East Tennessee and have not even seen one yet.

 

[Mymaverick2021]

I’m trying to figure out fords allocation logic, maybe someone can provide some more insight but I’m having a hard time figuring out how Fords current system will work out specifically for small allocation dealers

My dealer is a small mom and pop dealership and when I placed the order they showed me the list and there were probably a good 50-60 hybrid orders and 15-20 ecoboosts ahead of me. When I called my dealer a few weeks back to see how everything is going he said that he hasn’t seen a Mav come in for weeks. I’ve even heard of some dealers getting NO allocations for some months.

How are small dealers with way more orders proportionate to allocations supposed to fill all of their orders? I’m assuming the allocation amount can change from month to month but for each month that goes by just means less time to fill all the orders (ex if they are getting 5 per month and have 30 orders left by September they aren’t getting a 30 allocation month) Do large allocation dealers just suck up all the earlier allocations and then small dealers get backloaded for the end of the year?

I’m also assuming that larger allocation dealers will get a lot of their constrained builds built since they get more in general and will leave smaller dealers with more unfilled constrained orders because of this. Ex: if one dealer with 200 orders gets 20 per month and 8 constrained and one with 100 orders gets 5 per month with 2 constrained. (Bigger dealer gets a larger % built)

this also explains why there are a ton of instances where someone who ordered months after someone else gets their vehicle way before some people even get an order date.

I just don’t see a way they fill all of the orders with they way the current system is set up and it seems like most of the orders for large allocation dealers are frontloaded and smaller dealers will be backloaded, which means higher likelihood that get pushed to 2023 will be mostly if not all smaller allocation dealers?

Correct me if I’m wrong but is that not how the current system setup? Unless there’s something I’m missing

My take would be to Kill the Allocations platform and build vehicles on a as ordered system would hopefully create a more even playing field

 

[Mag Maverick]

What part of the Great State of Tennessee are you located? I'm in East Tennessee and have not even seen one yet.

I'm over here in vest Tennessee have juice retired from East Tennessee the only Mavericks I seen the one I test drove at my dealership and I went down to buy a set of tires from one of the other brothers in the club down in Huntsville Alabama and saw his if you get a chance why don't you email me I'd like to talk to you hope to hear from you back take care and have a fantastic day

 

[Mag Maverick]

I hate auto spell West Tn and just retired from East Tn Oak Ridge area.

 

[MakinDoForNow]

I’m trying to figure out fords allocation logic, maybe someone can provide some more insight but I’m having a hard time figuring out how Fords current system will work out specifically for small allocation dealers

My dealer is a small mom and pop dealership and when I placed the order they showed me the list and there were probably a good 50-60 hybrid orders and 15-20 ecoboosts ahead of me. When I called my dealer a few weeks back to see how everything is going he said that he hasn’t seen a Mav come in for weeks. I’ve even heard of some dealers getting NO allocations for some months.

How are small dealers with way more orders proportionate to allocations supposed to fill all of their orders? I’m assuming the allocation amount can change from month to month but for each month that goes by just means less time to fill all the orders (ex if they are getting 5 per month and have 30 orders left by September they aren’t getting a 30 allocation month) Do large allocation dealers just suck up all the earlier allocations and then small dealers get backloaded for the end of the year?

I’m also assuming that larger allocation dealers will get a lot of their constrained builds built since they get more in general and will leave smaller dealers with more unfilled constrained orders because of this. Ex: if one dealer with 200 orders gets 20 per month and 8 constrained and one with 100 orders gets 5 per month with 2 constrained. (Bigger dealer gets a larger % built)

this also explains why there are a ton of instances where someone who ordered months after someone else gets their vehicle way before some people even get an order date.

I just don’t see a way they fill all of the orders with they way the current system is set up and it seems like most of the orders for large allocation dealers are frontloaded and smaller dealers will be backloaded, which means higher likelihood that get pushed to 2023 will be mostly if not all smaller allocation dealers?

Correct me if I’m wrong but is that not how the current system setup? Unless there’s something I’m missing

Don't forget to factor in the transportation/distribution problems. If shipped by train they will have to ship a full rail car to a location where they will have to be unloaded and parked until there are enough vehicles to fill a truck going to a general area (some areas will be avoided by some of the truckers) so the trucks will make as few a number of stops as necessary. It may be that in some cases it is not only the size of the dealer but the number of dealers within 10-20-? miles of each other! Many things are involved! Perhaps in order to fill a rail car they will select a Jan 2022 order to combine with June July august orders because that's what they need to ship to one location, (?????)!

 

[Naranjita]

Don't flame me, but this is the allocation model in a nut shell. I'm not defending it, really. Just explaining it. But this is why...

Normal Every Day Selling Fords:

• Low Volume Dealer sells 1 Ford a Day.
• High Volume Dealer sells 15 Fords a Day.

All Day Long. Every day. If Ford made $1000 per transaction, Low Volume Dealer makes Ford $365k a year. High Volume Dealer makes Ford nearly $5.5M.

But it can get much more askew than that. What if the Low Volume Dealer sells more cars that have less margin? Maybe their margin average is $1000, but the High Volume Dealer sells lots of expensive SUV's and trucks. Maybe their average is $2500 for Ford? Maybe it is comparing $365K to $13.7M a year?

So, if there was no allocation model, in a normal year they would still after a year be a ratio difference of 15:1 between the low volume and high volume dealers in total sales. Just letting the chips fall where they may.

Popular model comes along. It's constrained in the number of units it will produce the first year. A Low Volume Dealer may be able to quadruple their normal sales volume due to that popular model. The High Volume dealer would see anything less than a 15:1 ratio as cutting into their sales. And that would be true.

They have been there, year over year, producing high numbers of sales for Ford. And now, when something popular comes along, they are supposed to live with less than what they normally receive? Meanwhile, low volume dealers get a sudden windfall, but the high volume dealers, are supposed to fund their windfalls.

The allocation system is designed to keep things in check, that dealers can't suddenly just take constrained and popular vehicles at a much higher quantity than normal. It's a stop gap to keep the field fair for dealers.

And you have to ask yourself, "Why does a dealer do such low volume and have a low allocation?" In many instances it is because they provide poor customer service, have bad reputations, overcharge or have ridiculous ADM's or shistery business practices. Do we really want a greedy high ADM low volume dealer getting a much higher ratio of Broncos and Mavericks? Each one there will be at the expense of another dealer with better business practices. If it was first come, first served, they are much more likely to put in fake ID names and get a larger share. Or turn on their customers and demand ADM on retail orders that were not disclosed. If you can't get more units than your allocation, it doesn't matter how many orders you put in...illegitimate or otherwise.

I'm sure there are lots of small dealers who are professional and price fairly, but they are small. And they will get popular Fords in roughly the same quantity they always sell Fords.

High volume dealers sells lots of cars. They generally are good dealers with good reputations and reasonable prices. That's why they are a high volume dealer. You can't force mass numbers of people to purchase a great quantity of vehicles.

If only 50,000 Mavericks end up being produced, the allocation system is designed to make sure that they are awarded out to dealers at roughly the same rates that they normally purchase vehicles. The only way to game the system is to sell more vehicles. That's what Granger was doing selling their Mavericks at low prices. To change their ratios and get more future allocations.

This process, though the fairest for dealers, is not fair to a customer. A customer would probably happily go to another dealer if they knew the end result for them would be different. Customers want to be treated fairly and similarly. In a dealer stock situation, customers wouldn't be harmed by the allocation process. They would go to the low volume dealer lot and see little to no inventory and move on to other lots until they found what they were looking for.

But in a retail order model, the allocation system does not work for customers. Because the low volume dealer is not injured that they are getting vehicles in roughly the same quantity ratio they always have. Their final sales numbers will end up similar at the end of the year. But all those extra customers they ordered vehicles from beyond their normal allocation are stranded.

The way I see it, they need to either...

• Modify the allocation system on the order end. Instead of scheduling allocations, make order allocations. The low volume dealer can schedule their 1:15 share (or whatever it actually is). Then they have to tell customers they are out of order allocations for the month when they want to place an order beyond their monthly allocation. Then the customer can decide to look elsewhere for a dealer with order allocations, or go on a waiting list, or check back in next month. In this method, everyone who gets an order in will be scheduled in a month or two. Customer is in control, and not subject to an undeterminable and prolonged order/waiting process.
• Or scrap the allocation system all together. But something will need to be done to protect the high volume dealers from having their inventory raided on popular models. A first come first served system will just cause all the dealers to commit funny business to try to get a greater share for themselves. The only way to game the system now is to sell more (and all the time).

Ford does need to do something though. This is just killing the customers. Who did nothing wrong except want to buy a Ford. I'm sure Ford never thought this kind of information would ever get out there and understood by the public. But it is.

I know people that won't buy Chevys, or Fords, or Dodges, or Volvos, or whatever, and they say it's because something minor or obscure that happened to them 30-40 years ago. Or sometimes they do not even remember why. But they are still holding a grudge.

I've seen some of them in these forums. They will be hating Ford 40 years from now. And they may not even remember why.

Ford, do something for the customer! You can't win here. But you certainly can lose!

 

[Loffredom]

Don't flame me, but this is the allocation model in a nut shell. I'm not defending it. But this is why...

Normal Every Day Selling Fords:

• Low Volume Dealer sells 1 Ford a Day.
• High Volume Dealer sells 15 Fords a Day.

All Day Long. Every day. If Ford made $1000 per transaction, Low Volume Dealer makes Ford $365k a year. High Volume Dealer makes Ford nearly $5.5M.

But it can get much more askew than that. What if the Low Volume Dealer sells more cars that have less margin? Maybe their margin average is $1000, but the High Volume Dealer sells lots of expensive SUV's and trucks. Maybe their average is $2500 for Ford? Maybe it is comparing $365K to $13.7M a year?

So, if there was no allocation model, in a normal year they would still after a year be a ratio difference of 15:1 between the low volume and high volume dealers in total sales. Just letting the chips fall where they may.

Popular model comes along. It's constrained in the number of units it will produce the first year. A Low Volume Dealer may be able quadruple their normal sales volume due to that popular model. The High Volume dealer would see anything less than a 15:1 ratio as cutting into their sales. And that would be true.

They have been there, year over year, producing high numbers of sales for Ford. And now, when something popular comes along, they are supposed to live with less than what they normally receive? Meanwhile, low volume dealers get a sudden windfall, but the high volume dealers, are supposed to fund their windfalls.

The allocation system is designed to keep things in check, that dealers can't suddenly just take constrained and popular vehicles at a much higher quantity than normal. It's a stop gap to keep the field fair for dealers.

And you have to ask yourself, "Why does a dealer do such low volume and have a low allocation?" In many instances it is because they provide poor customer service, have bad reputations, overcharge or have ridiculous ADM's or shistery business practices. Do we really want a greedy high ADM low volume dealer getting a much higher ratio of Broncos and Mavericks? Each one there will be at the expense of another dealer with better business practices. If it was first come, first served, they are much more likely to put in fake ID names and get a larger share. Or turn on their customers and demand ADM on retail orders that were not disclosed. If you can't get more units than your allocation, it doesn't matter how many orders you put in...illegitimate or otherwise.

I'm sure there are lots of small dealers who are professional and price fairly, but they are small. And they will get popular Fords in roughly the same quantity they always sell Fords.

High volume dealers sells lots of cars. They generally are good dealers with good reputations and reasonable prices. That's why they are a high volume dealer. You can't force mass numbers of people to purchase a great quantity of vehicles.

If only 50,000 Mavericks end up being produced, the allocation system is designed to make sure that they are awarded out to dealers at roughly the same rates that they normally purchase vehicles. The only way to game the system is to sell more vehicles. That's what Granger was doing selling their Mavericks at low prices. To change their ratios and get more future allocations.

This process, though the fairest for dealers, is not fair to a customer. A customer would probably happily go to another dealer if they knew the end result for them would be different. Customers want to be treated fairly and similarly. In a dealer stock situation, customers wouldn't be harmed by the allocation process. They would go to the low volume dealer lot and see little to no inventory and move on to other lots until they found what they were looking for.

But in a retail order model, the allocation system does not work for customers. Because the low volume dealer is not injured that they are getting vehicles in roughly the same quantity ratio they always have. Their final sales numbers will end up similar at the end of the year. But all those extra customers they ordered vehicles from beyond their normal allocation are stranded.

The way I see it, they need to either...

• Modify the allocation system on the order end. Instead of scheduling allocations, make order allocations. The low volume dealer can schedule their 1:15 share (or whatever it actually is). Then they have to tell customers they are out of order allocations for the month when they want to place an order beyond their monthly allocation. Then the customer can decide to look elsewhere for a dealer with order allocations, or go on a waiting list, or check back in next month. In this method, everyone who gets an order in will be scheduled in a month or two. Customer is in control, and prolonged order and waiting process.
• Or scrap the allocation system all together. But something will need to be done to protect the high volume dealers from having their inventory raided on popular models. A first come first served system will just cause all the dealers to commit funny business to try to get a greater share for themselves. The only way to game the system now is to sell more (and all the time).

Ford does need to do something though. This is just killing the customers. Who did nothing wrong except want to buy a Ford. I'm sure Ford never thought this kind of information would ever get out there and understood by the public. But it is.

I know people that won't buy Chevys, or Fords, or Dodges, or Volvos, or whatever, and they say it's because something minor or obscure that happened to them 30-40 years ago. Or sometimes they do not even remember why. But they are still holding a grudge.

I've seen some of them in these forums. They will be hating Ford 40 years from now. And they may not even remember why.

Ford, do something for the customer! You can't win here. But you certainly can lose!

makes a lot of sense. I’ve always said in a normal economy with high output capacity their allocation system probably works good but for wanting to transition to a retail order model it does not work, especially in todays messed up economy. It also doesn’t help that ford and dealerships have not been very good at communication

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