In these days of high demand for RVs of all types, a lot of people have heard about RV Brokers but wonder just what does an RV Broker do? The answer is… a lot!
In Episode 345 of the RV Podcast, we talk to Dr. James Upham, a well-known RV broker with years of experience. He offers a very candid explanation of just why someone may want to use an RV broker to either help them find and buy the RV of their dreams or to sell their current model.
He also reveals some little-known insider information about a secret industry sales tactic that explains why some RV salesman may steer you towards a particular RV that pays them an under-the-table payment called a “SPIF” instead of recommending what may be the best choice for you.
Click the player below to listen to the entire podcast. And for a complete transcript of my interview, keep scrolling down.
Here is an edited transcript of the interview with Dr. James Upham of MyRVBroker.com:
What does an RV Broker do?
Mike Wendland: RVs have never been in higher demand. It's harder and harder to find what you want. And that's why I thought that you would make such a great guest. Tell everybody, first of all, what is an RV broker? What do they do?
James Upham: So an RV broker works much like an auto broker. Okay? So they work… The term is used often the middleman, but really the person in between so that it saves, hopefully, saves money, time and it gets you the best deal. Exactly what you're looking for.
RV brokers are generally used to sell or buy or sometimes both, motorhomes. So if you're looking to get out of one, get into one, you don't want to deal with negotiation. You don't have time. Maybe that's an issue for you. You definitely want to get the best deal. You appreciate the whole sales process. This is where you would hire an RV broker to come in and do the work for you.
Why use an RV Broker?
Mike Wendland: So, one way would be to sell my RV. And of course, this is a prime time to sell them. You might just talk a little bit about that. So if I contract with you to sell my RV, what do you do? Why would I do that rather than putting an ad in one of the trade publications or put a sign out front?
James Upham: Well, right now, you hit it on the head, Mike, you don't want to do that. The market right now is such that it's amazing what some of these RVs are getting in the used market right now. I mean, I happened to spend a lot of my time helping buyers, new buyers, first-time buyers, especially.
And a lot of first-time buyers are looking into the new market. The reason being is that a lot of the used market, where, as before, you would save a substantial amount of money. In this market, you don't save a lot. So you really don't need an RV broker in my opinion, to sell your unit. Your best way to do that now is to go to Facebook Marketplace, saved Craigslist, some of these free sites that you would do it on your own.
Now, with that said, let's say that you still didn't want to mess with that and you wanted to hire someone like us in order to sell. What we would do is we would pre-negotiate some arrangement with you.
RV Brokers take a percentage of the deal
We would decide on what our fee would be, and then we would take it from there. So we would take all your pictures. We would list them for you. We do things a little differently for our services and what brokers generally do. But yeah, your big RV sites and such, they'll try to line up certain buyers for your motorhome.
But it may cost you five, 10% depending on what people are charging. And you just don't want to do that right now in this market, because you have a much better chance of selling it yourself.
Mike Wendland: I appreciate you being so honest about that because it really does seem to be a sellers market. So flipping it on the other side and the side that I think is of most interest right now, to so many new people who can't find that RV they want, or they go to a dealer and they find the model and they say, “I want it.” And the guy says, “Well, it's going to take you a year and a half to have it built.”
James Upham: Yeah.
Why use an RV Broker?
Mike Wendland: Why would I use an RV broker, in that case, to find what I want?
James Upham: Well, the main reason… I always bring it down to two big issues. The one being the most, if saving money is important. Now I say that with a smile on my face because I'm blown away and amazed by how many people are rushing into this. They're buying an RV on an emotional whim. They're letting their emotions drive them.
And because they're being told the truth in many cases about an RV's delivery date, but sometimes we know that there might be a little bit of embellishment there and a little exaggeration, but they're letting their emotions drive them and they're paying way too much.
An RV Broker can save you money on an RV purchase
So the main reason why you would hire an RV broker is to help you save money.
The second thing that I like to relay to is that I really provide, in my case, I provide a consulting service where I can help you through to identify certain issues that you may have not have considered before.
James Upham: And it's good to have a coach in your corner to help you with that. The way that it generally works for us is that what we'll do is we have established relationships.
I worked for years as a sales rep, manufacturing rep for Winnebago. And so I got to meet a lot of great people along the way, a lot of dealers, and through the process to starting my own company, what ended up happening is I was able to pre-negotiate discounts based on volume of bringing customers to dealers.
And so that's really if you want to save time, you want to save money and you just don't deal or appreciate with any of the headaches out there. You want someone to coach you in your corner to help you and give you a third-party perspective that's not driven by a commission. That's why you would have an RV broker on your side.
Who pays the fees for an RV Broker?
Mike Wendland: Now, if I contract with an RV broker to help me find the RV I want, who pays the fee, is that paid by me? Or is it by the seller that I end up buying from?
James Upham: Yeah. So great question. It really depends. We work, just to answer it from our perspective, we work a little differently, whereas we'll work out a scenario that's best for everybody.
A lot of cases, a buyer will actually hire me. I'll provide them with an invoice with the flat rate and we'll go to work. And at any point, as long as they pay us before they pick up their motorhome, we have no pressure. We just work there and we have unlimited access to kind of help you through the process.
Other brokers will work out a commission of some kind that either the seller will pay or if they happen to have inventory of their own. So if they're buying and selling their own, then they have that scenario.
So it really depends on what the arrangement is. For us when we're helping people to find motorhomes or trailers. But specifically, we find a lot of motorhome buyers right now. Then we will generally work with that motorhome buyer so that I'm working directly for them.
And there's no ulterior motive or influence based on what a dealer might pay me, because I really want to have their best interest in mind. It's not always that way. It really kind of depends on the scenario.
What fees do RV Brokers typically charge?
Mike Wendland: That was one of my concerns. because it seems to me that it would be very tempting for the broker to say, to go to dealer a and say, “Look, I can put him in that RV. I'll sell them to that one, but I want you to give me a cut on that.” And so negotiating a fee has got… A rough ballpark, let's say we're talking to a hundred thousand dollar motorhome that somebody has budgeted.
What would that cost me as a buyer?
James Upham: It could be a scenario where you may have, might pay as much as five to 10%. I mean, now, usually not that high because of the demand right now, because of the market, right? Where you have everybody trying to get out there and get buyers.
But yeah, it really depends on that particular broker. For us, we usually do a flat fee and then we offer additional services if they need it. We really want what's best for everybody.
The SPIF: A payments to salesmen by manufacturers to push their products
We find that just being kind of middle of the road, having a reasonable fee out there is really the best way to go. You know, to your point, Mike, one of the things that we saw that you may have addressed already with some of the other podcasts and YouTube videos is there is something that unfortunately drives a lot of sales and that is a manufacturer's payment to a salesperson.
James Upham: It's what's called a SPIF. And it's this ugly word out there and whether or not anybody knows about that, I've gone on and on about that. It's something to be careful, where a SPIF is being paid by a manufacturer, in addition to what the dealer is paying, and that can sometimes influence what we're offering to a customer.
So there's an exterior force that's coming in here saying, “Hey, if I sell this one over here, either one will work, but this one over here is going to pay me more.” That's what you'll try to avoid when working with an RV broker, hopefully, is that they have your best interest in mind and they don't have additional resources available to them.
Mike Wendland: This idea of a SPIF… I've mentioned it in times past, but what does that stand for? Is there a sales incentive something?
SPIF stands for Sales Performance Incentive Fund and is common in the industry
James Upham: I have another word for it. I don't know if I can say it on your broadcast, but I mean, it is to me, look, it happens, right?
It's out there. It's been around for a long time.
I'm not knocking this in the sense that I want everyone to do as best as they can. We just don't want to take advantage of people in the process.
A SPIF drives dealer sales
But I personally was working in an environment where I saw these SPIFs drive those sales.
And so, here you got a brand new customer. Someone who's never been in the RV business, they walk onto a lot. They're being told they can't get something for a year. They can't do this. And then they see one over here and it looks like it could work. And the salesperson knows, “Hey, I'm going to make more money here.” They're, you see, it's kind of a slippery slope.
What you really want to do is have somebody be able to guide you, have no additional incentive, work with you. You hire them. They have your best interests at heart. They go to work for you, and then hopefully you refer to them over and over again and everyone's happy.
So yeah, you got to be careful about that.
Hope I didn't open up a can of worms, but hey, that still happens even in this market.
Mike Wendland: Now, people know about it, but I don't think they know it is as probably as widespread as it is.
How an RV Broker works
Now that said, exactly how a broker work? If I called you up and this is the model I'm looking for or I'm looking if I'm looking for a class C that has four seatbelts, not two, that has a small slide. You, then knowing the market, will you suggest a certain model? Will you go out and find them and say, “Here are three that you can look at.”
James Upham: Yeah, so if you already know what you want, you've done all your homework, you know exactly the model, the floor plan, the years, whether it's new or a couple of years old.
You remember, Mike, that, a couple of years ago before all this COVID stuff happened, you would lose 30, 40% of depreciation would factor in on a new unit within the first couple of years. We're seeing that gap, close because of what's happening with demand and with the supply chain disruption right now.
So what you're getting is you're getting a lot of inflated pricing, but you may or may not know what you're looking for. In the event that you know what you're looking for, then yes, you would contact us. You'd say, “Hey, here's what we're thinking about, these certain models, and is there anything you can do?”
We would set up a five-minute, 10-minute appointment, we'll go through it. We'll talk budget. We'll talk about where's the best place? Where do you live? Where could it be delivered, et cetera, et cetera, most important features. You hit it on the head, seatbelts. That's one that I always remind people of. “Hey, have you thought about seat belts? Do you have kids? Do you have grandkids? These are some of the questions that you need to think about.”
But in the event that you know, yeah, then what we could do is I could say, “Hey, for no charge for this, let me make a few calls. Let me see what's available. See what's out there.” We'll come back and decide if we want to move forward with it, then you can retain us and we'll go from there.
In a scenario where you don't know what you're looking for, you just know you want something. That's where we would do something similar. As I would spend a lot of time with you. We would figure out what's best for you and your family. And then we would decide at that point on what's going to work best for you.
So it's really a matter of just contacting us, letting us know what you're looking for, or in the event that this market changes and you want to sell something, say it's on the opposite side of that. Then we would do a lot of Google SEO work for you, market that for you. So it really kind of depends on what you're looking for.
How long does the process take with an RV Broker?
Mike Wendland: So I want to buy a new RV. I contact you. I give you a rough idea of what I'm looking for. What's the average time now in this market that it would take you to come back and say, “Hey, I found three of them or one of them, or there's nothing like that. But here's something you might want to look at.” How long does that process normally last in this market now?
The RV market is crazy right now
James Upham: Yeah, right. I guess that's the caveat there in this market now. It's crazy.
I'll answer that by saying, in years past, when I was working as a manufacturing rep, you would say on average, if there wasn't a motorhome, for instance, in the yard, you'd say eight to 12 weeks, depending on if it's a class B, it's a class A so you know, it just kind of varies.
Now you're looking on an average of more like three to six months, more like six months, depending upon chassis, there's all kinds of variables out there.
I can generally with the dealers that I work with, get you one a little quicker, but it's not going to be, just to be completely forthright and honest. I'm not going to be able to save you and cut off months at a time. Unless, because I have certain contacts with dealers that are knowing what we're looking for, that they see something, grab it for us in market, and then contact us because maybe a retail sale had unwound. So there are scenarios like that, that I've seen.
But yeah, you're typically looking at a minimum, I would say if it's a new unit, three months and sometimes a lot quicker, sometimes more. It just really depends on which… Class B's right now are really hard to find.
I've been able to get some of our buyers in there a lot quicker at a much better price, just because we were able to negotiate that ahead of time before some of this demand. But yeah, it's, I tell you, it's a day by day basis. Isn't it? It's just wild what's happening right now.
Does using an RV Broker save money in the long run?
Mike Wendland: There is a fee obviously that you negotiate or an RV broker works out, but is that fee made up in savings that you then would get for that buyer from buying directly themselves?
James Upham: Yeah. I mean, I don't like to complicate things. Here's what makes us a little different is we connect buyers and sellers. And at some point in the process, I will either turn them over, a buyer to a seller if it's a dealer, for instance, let them do their paperwork, help them with financing.
I'll provide all kinds of information referrals if they need insurance. I mean, I'll do the whole package for them, but when it comes to the actual purchase and the purchasing agreement, et cetera, then at some point I'm connecting them together and I'm in the loop.
If there's a private party seller, then we'll draft some paperwork. I have an attorney here in town, a good friend of mine, who I'm actually trying to help find a motorhome right now, who we could put together paperwork. They can review it and do all of that for them for a seller.
But right now, what we're finding is a lot of customers are interested in new motorhomes and trailers. And with that happening, we typically will send them over to the dealer, work with them on the side and then help them through the process in case they're being offered some services that we just don't think that they need.
Mike Wendland: So you handled the negotiations, the sales negotiation.
James Upham: I did.
Mike Wendland: Okay. So that's the point because that's where the money is saved or somebody who's paying. You, for example, say to the buyer, you don't really need this… You don't need to pay this paperwork fee. This is a ridiculous fee that the dealership charges. Do you find savings in that process?
The savings can be in the thousands of dollars
James Upham: Oh yeah. Thousands. I mean, and so just from the top line, just on what they're being charged, Mike. Whereas somebody who doesn't spend the time, know the market, know what they're purchasing, it's these emotional driven, right?
We talked about that, about the emotions driving it. Got to have this now. We're going on a vacation. You got to think about the long-term memories that this motorhome or trailer is going to provide for you, not just the summers, right?
So it's this emotional drive. There's a tremendous amount of savings from what we're able to, just because of the volume of who we send to the dealers. Right? And that's why dealers like to work with us is because we're their base.
It's not free money for them, but we're bringing them customers who we've qualified, who we are working on behalf of, they save money. They typically 99, 98% of everyone we bring, they don't walk away from a deal. So dealers love that.
They save money and they translate that savings to the customer. And because we typically will have a flat rate, we don't monkey around with, “Hey, if we save you this much, we'll take this much.” We just make it simple, clean, easy, and then we continue to help people along the way. So that's how it works for us.
How do you find an RV Broker?
Mike Wendland: All right. Last question. How does somebody find a broker?
James Upham: I always think you got to go back to Google. You go into myRVbroker, look up Facebook. I tell you the best way to get a review, right, an honest review is go to these Facebook groups out there and just see what people are saying and put a question in there. “Hey, has anyone used a broker? Do you need one? What were your experiences?”
Those, I think, give you the most honest and candid conversations that you really need to make in that decision. But yeah, just like anything, just Google it, right? You should be able to find one.
Mike Wendland: That's what we suggest. That's why we have 50,000 people in just our Facebook group alone for helping like that.
Thanks for telling everybody and being upfront so people know what a SPIF is.
I think people are going to find this very helpful.
James Upham: Thank you for having me. It was a blast.
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