Jacobs To Sue Dealer Cost Website

J&D Acquisitions Chairman and CEO Irwin Jacobs has advised dealers that his company has initiated a lawsuit against the seadealercost.com website that launched yesterday.

In a letter to all Larson, Seaswirl, FinCraft and Triumph dealers and sales reps dated March 18 2011, Jacobs wrote “As you know, a website was recently launched which includes contractual and proprietary pricing information for some of our brands. I am writing to inform you that we have initiated a lawsuit in Hennepin County, Minnesota against such site to stop this illegal behavior. These unconscionable acts have and will damage our brands and our dealers and we will not stand for it. We will pursue every legal remedy available to us, including injunctive relief, to stop this in its tracks and recover our damages.

“Please also know that we are fully investigating how this site obtained our contractual and proprietary information. Once such source is identified you can trust that the appropriate actions will be taken to deal with these individuals. In the meantime, I cannot stress enough the importance that each of you continue to protect and not disclose to third parties any of our confidential business information. We will hold all of our employees, dealers, and sales representatives to the highest standards in this area.”

While Jacobs does not identify the website by name, the letter comes in reference to the www.seedealercost.com property which launched yesterday (March 17, 2011). The new website is described by spokesman Dave Taylor as a shopping information site, including specifications, standard features and both MSRP and invoice cost on a full range of boats, engines, RVs and powersports equipment. MSRP and invoice costs for optional equipment, including engine upgrades, are also provided.

“What we show as invoice cost is the amount that the dealer is invoiced by the manufacturer, including factory installed options,” says Taylor. “It does not include shipping, dealer prep, taxes, licenses or other fees. It also does not account for retail or wholesale incentives that the manufacturer may offer its dealers, nor does it include provision for the dealer's cost of doing business, meaning basic overhead. This is clearly stated throughout the website.”

In an exclusive interview with Boating Business, Jacobs said “I'm tired of seeing boat dealers being hammered all the time. They've all been through extremely difficult times, and now they're being confronted with this? How exactly is this serving anyone's purpose? The people from the website came to see me to ask if we would participate and I was astounded. I said, are you crazy? Do you think I'm going to bury my own dealers? Why would I do that? It doesn't make any sense.”   

The new website is designed to be monetized through a combination of advertising sales and its lead generation capability, says Taylor. “When a consumer comes onto the site they enter their zip code so we can provide the most accurate information. With the consumer's zip code and email address, and detailed information on exactly what brands and models they are browsing, they can be served with ads of local relevance. Beyond that, we have the ability to provide manufacturers and dealers with highly qualified leads.”

Jacobs questions the value of this capability, however, asking “What good are leads when you can't make any margin on the boat?”