A specific solution to a specific problem in a specific time
To understand why we buy and sell cars unlike other goods in America requires a look back at the crazy and often brutal early days of the American auto industry.
In the late 1800s and early 1900s, you might see a car parked outside of the general store and the clerk inside would happily take your order for one.
Around Mannheim, Germany, Bertha Benz drove her husband Karl’s invention, the Benz Patent Motorwagen – considered the word’s first internal combustion-powered car – taking orders from curious passersby. For a while, Sears sold the Sears Motor Buggy through its mail-order catalog.
Some companies even sold cars on a literal installment plan. Customers would order one or a few parts at a time that were delivered through the mail and, over the course of months, could assemble their own car.
Some enterprising businesspeople became full-time car dealers. William Metzger, who started selling electric and steam-powered cars of various makes in Detroit in 1898, is usually credited as the first car dealer.
“That was one of the big issues in the first 10, 15 years or so of the American automotive industry, ” said Matt Anderson, curator of transportation at The Henry Ford museum. “What is the best model to sell cars to the public? And all sorts of different things were tried.”
In those early days, car companies were popping up all over, although many quickly went bust. But with the few that succeeded, car production skyrocketed. US auto production went from 4,000 units in 1900 to 1.9 million in 1920, according to a 1985 article by Thomas Marx in the journal Business History Review.
One company in particular was making so many cars that even more innovations were needed to handle all the sales. That company was Ford Motor Co. and the car was the Model N.
Produced from 1906 to 1908, Ford made 6,000 Model Ns in one year, an astounding number in its day. (The Model N. was a predecessor to the far more more famous Ford Model T.)
Even though Ford hadn’t yet started using a moving assembly line, it was still building and selling so many cars – including other letters of the alphabet – that the company began recruiting a network of dealers to handle it all.
While Henry Ford oversaw engineering and production of cars, his famously irascible business partner James Couzens handled finances and sales. He recruited independent dealers believing that someone would work hardest when working for themselves.
But he didn’t make it easy for them.