From Dealer to Manufacturer Expressing Concern About New Dealer in Vicinity
[DATE, ex. Wednesday, June 11, 1998]
[NAME, COMPANY AND ADDRESS, ex.
1234 First Street
Anycity, Anystate 85245]
Dear [NAME, ex. John Smith],
I was distressed to learn recently that you were considering the opening of a new dealership in the area of [NAME OF AREA].
I have been a [TYPE OF DEALER, ex. ABC Appliance] dealer for over [NUMBER OF YEARS AS A DEALER, ex. four years]. It has been quite a struggle to become profitable, despite working long and hard hours and taking few vacations. Our entire life savings have been invested in this dealership on the hope of a reasonable return in the future.
You now have [NUMBER OF DEALERSHIPS IN AREA, ex. six] dealerships in the [NAME OF AREA] area to service the retail market in this area. This compares to [NAME OF COMPETITOR, ex. XYZ Appliances] which has [NUMBER OF COMPETITOR’S DEALERSHIPS IN AREA, ex. three] dealerships servicing the same market. As you well know, the competition among the dealerships is fierce and bitter.
Your proposal to open the new dealership in this area can only exacerbate this situation further. It will unlikely lead to a greater overall market share for you, but will diminish profit margins even further and lead to cannibalization among the dealers.
In light of the constant struggle of the existing dealer network to earn a livelihood, I urge you to strongly reconsider your decision to open any new dealerships in this area at this time. Your existing dealer network needs an opportunity to establish itself and plant its feet firmly in this area.
I have grave concerns about the viability of my own dealership and those of my fellow dealers if you proceed with any further expansion at this time. My family’s livelihood and that of the other dealers depends on your decisions.
[YOUR NAME, ex. Jill Jones]
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