Article: Dealer allocations - what is actually means

[fourjays30]

Good read on what dealer allocation actually means.

https://www.dealerlawyer.com/allocation-its-more-than-turn-and-earn/

A couple of points I take away is that allocation relates to dealer inventory and not for retail orders and I found it interesting that some states have laws against unfair dealer allocation numbers.

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[minitrucknuts]

allocation relates to dealer inventory and not for retail orders

bzzzt wrong

 

[Saul T Knutz]

Could Ford be doing the allocation system wrong? Could that error result in everyone getting their Maverick for free as a result of a massive class action lawsuit? Tune in next week to find out...

 

[jesemd]

The article says exactly what Tim has explained. Ford is going to allocate the most Maverick production to the dealers that sell the most Mavericks and who sell them most quickly after they arrive.

Dealers have to learn how to play the game if they want to succeed. Order the vehicles/options/colors that sell fastest. Maybe focus on a few vehicle lines at first. Get your incoming inventory pre-sold. Liquidate old inventory at all costs.

 

[fourjays30]

FUBAR

 

[fossil]

new to most of us, hardly new to dealers no matter what they spew

 

[KevCuRaoi]

Good read on what dealer allocation actually means.

https://www.dealerlawyer.com/allocation-its-more-than-turn-and-earn/

A couple of points I take away is that allocation relates to dealer inventory and not for retail orders and I found it interesting that some states have laws against unfair dealer allocation numbers.

Allocation is simply the # of a given vehicle that the manufacturer is agreeing to build for a dealer.
Ford may be giving out "estimated" yearly allocation. But allocation is granted monthly. Ford offers a dealer a certain amount of allocation (based on prior sales/market share/retail orders in the system(sometimes)/etc). The dealer can accept. Or deny. Or ask for extra. The region can then give a final allocation # for the month. The dealer accepts, and has agrees or order X amount of Y Vehicle. Ford will want schedule that # of vehicles for that dealer over a certain time period (usually a month). Retail and stock orders will be considered for scheduling. Retail orders are always given priority, but because of constraints, stock orders may be filled instead.
Sometimes the plants are "full" and all of the allocation cannot be fullfilled, so it rolls over to the next month.

Ford allocates vehicles to countries, then regions, then zones w/in the region...... the dealership's zone will decide what vehicles are allocated to them to order.

 

[commadorebob]

The article says exactly what Tim has explained. Ford is going to allocate the most Maverick production to the dealers that sell the most Mavericks and who sell them most quickly after they arrive.

Dealers have to learn how to play the game if they want to succeed. Order the vehicles/options/colors that sell fastest. Maybe focus on a few vehicle lines at first. Get your incoming inventory pre-sold. Liquidate old inventory at all costs.

Yep. As much as consumers want to walk on lots full of vehicles, dealers don't want that. They want those vehicles sitting on the lot as little as possible because it means they get more vehicles coming in. Dealers have to know their market and what sells in a particular market. What is great about retail orders for dealers is they have built-in buyers. So, the turnaround is almost instant, helping boost those allocation numbers.

What I did find interesting in the article is Ford will count "in transit" vehicles against allocation. I am curious when "in transit" starts counting. Is it when it rolls out of the plant or when it gets on the train?

 

[Sirk]

Not for nothing, but this article was published in October, 2019. I'd be curious to know how OEM have adjusted their algorithms to reflect the fact that the new vehicle market is very different than it was three years ago.

 

[jesemd]

The real question is who at Ford can override allocations, and what is on their Christmas list?

 

[minitrucknuts]

Yep. As much as consumers want to walk on lots full of vehicles, dealers don't want that. They want those vehicles sitting on the lot as little as possible because it means they get more vehicles coming in. Dealers have to know their market and what sells in a particular market. What is great about retail orders for dealers is they have built-in buyers. So, the turnaround is almost instant, helping boost those allocation numbers.

What I did find interesting in the article is Ford will count "in transit" vehicles against allocation. I am curious when "in transit" starts counting. Is it when it rolls out of the plant or when it gets on the train?

You have stated that it is better to order from a large dealer. Why do you believe it is better to order from a large dealer?

 

[Automate]

You have stated that it is better to order from a large dealer. Why do you believe it is better to order from a large dealer?

One thing that struck me when watching Tim's video on allocations is that after going through the complex calculation they always round down. So if your dealer's monthly allocation calculation comes up to 0.95, then the dealer gets no allocations that month. Or if the calculation is 1.95 the dealer only gets 1 allocation.

For a large dealer that gets 50 or so allocations a month, the difference between 50 and 51 allocations is not that big a deal. But for a small dealer that only has a dozen orders for the whole year. That one allocation lost each month is a big deal.

 

[minitrucknuts]

One thing that struck me when watching Tim's video on allocations is that after going through the complex calculation they always round down. So if your dealer's monthly allocation calculation comes up to 0.95, then the dealer gets no allocations that month. Or if the calculation is 1.95 the dealer only gets 1 allocation.

For a large dealer that gets 50 or so allocations a month, the difference between 50 and 51 allocations is not that big a deal. But for a small dealer that only has a dozen orders for the whole year. That one allocation lost each month is a big deal.

Good observation, but it will always, and only come down to the ratio of orders:allocations at the dealer.

 

[Lonnie gee]

As I understand it no matter how many orders a dealer took he’s only gone to have so many , Mavericks chosen that he has allocations for , if he took 75 orders and he only has 40 allocations 35 not built ,
I’m not gonna get built

 

[IdahoDirtFarmer]

I'm sure I'm missing something here but messing with allocations seems silly when it comes to what is essentially direct customer orders. I would think it would make more sense to ignore allocations on custom orders. That rig is essentially already purchased. Customer orders should bypass allocations and just go down the list of who ordered first if it can be built. Dealer stock for the lot, allocations makes sense and should be in part based on number of customer orders. Having people make an order, stating they want that certain vehicle and agreeing to purchase it the minute it arrives, then saying you won't get it because your dealer didn't sell enough last year seems asinine at best. A presold order is world's apart from judging how long a rig will sit without being sold on a lot.

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