Beware The Evergreen


For the last 25 years we have been selling automotive dealer supplies.  One of the most infuriating things we continue to see are our service company competitors signing customers to service agreements that include Evergreen Clauses.  An Evergreen Clause is wording where the parties agree that the agreement rolls over automatically and indefinitely until one party gives the other notice to terminate.  Usually, this notice must be in writing, and received within a very narrow window of time.  By rule, these agreements are purposefully exceedingly difficult to end.

Why does it matter?   Primarily, customers find themselves locked into an agreement that forces them to purchase products at uncompetitive pricing for a year or more.  Then the agreement rolls over.  Say they purchase seat covers at $80 a roll from a service company.  This same seat cover can be purchased on their own for $40 a roll.  At two rolls a month, they are overspending by $960 for one product and usually there are a dozen products being purchased from the service company.  Pretty easy to overspend by $5000 a year, $10,000 a year… then you forget to cancel the agreement, and you are overspending next year too.

Other reasons?  Most customers in our business do not think they have the time to source these products, or they do not affect the bottom line.  Not true and is why came into existence. Customers are told by the service company that their prices are competitive, when they are not… they are told that they will do the stocking for them, which is never a clever idea… they are told that they will be taken care of… they are taken care of, but not the way they think.

The service company KNOWS that most of their customers have many other things to worry about other than where their seat covers are coming from.  They KNOW they can charge whatever they want because all the customer wants is to get this off their plate.  So, the service company whispers in the customers ear that everything will be taken care of, do not worry about a thing.  We are price competitive… do not worry, just sign here and we will take care of everything.   Then they lock the customer down with an Evergreen at prices that are uncompetitive.  It is true… we have seen it.  It is happening right now all over the country. 

Purchasing 101… control all you can control, and do not ever let anyone run your business but you, no matter how much time you think you are saving.  There is a cost associated with everything, with every product, every single time.   Beware the Evergreen…and take control of your purchasing with

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