Mercedes-Benz-Blog TRIVIA: Own-account sales: the system of company-owned sales and service outlets


Stuttgart, Germany, Dec 02, 2008

* Daimler-Motoren-Gesellschaft and Benz & Cie. pioneer the principle of company-owned sales branches

* Direct influence of the manufacturer on all sales activities, including service

* Five company-owned sales and service outlets opened in 1909

The invention of the automobile in 1886 revolutionised individual mobility. At the same time, the product was so unique that the manufacturers fundamentally had to change the distribution channels customary up until then: Benz & Cie. first, and shortly afterwards Daimler-Motoren-Gesellschaft (DMG), introduced the principle of company owned sales and service outlets at the start of the 20th century and, with few exceptions, did away with customary intermediaries, agents and dealers. Own-account sales have been a common principle in the automotive industry ever since.
Throughout the late 19th and early 20th centuries the sale of Mercedes and Benz automobiles were still largely in the hands of independently operating agents or partners. A well-known example is that of the Austrian businessman Emil Jellinek, who resided in Nice and created the brand name Mercedes. Jellinek deserves credit for putting a large number of Mercedes in the hands of well-heeled customers. His importance for DMG grew, until eventually he was purchasing the majority of manufactured vehicles for resale. Furthermore, he had the rights to sell the cars at home and abroad at prices and on terms he himself set. Of course, this made him too assertive in dealings with DMG, and the company began thinking of ways to secure a more direct influence on sales.

In addition, the German economy was not going well in 1906 and 1907; and there was a corresponding decline in the sale of expensive goods, and thus of automobiles. Daimler-Motoren-Gesellschaft wanted complete freedom of action and therefore set the stage to cancel all existing contracts – the one with Emil Jellinek in particular – and clear the way to set up a sales organisation of its own. For the same reasons, and more or less simultaneously, the managers of Benz & Cie. in Mannheim entertained similar ideas and came to the same result: both companies developed a model for company-owned sales and service outlets.

This approach had several advantages. On the one hand, agents no longer had the freedom to fix prices; the manufacturers themselves controlled how, where and at what prices the vehicles would appear on the market. Consistency was what mattered, and so list prices were fixed. On the other hand, in their own salesrooms the manufacturers had direct contact with the wishes and needs of the customers and could bring their products even better into line with popular taste. In addition, in this way they could also guarantee quality of service – an essential sales argument for a manufacture of proprietary goods and products as expensive as the automobile. Last but not least, the manufacturers economised on money that otherwise went to the intermediary trade. It should be said that this own-account sales model put companies far ahead of their time: the arguments for such an approach continue to exercise manufacturers and distributors in other branches of industry to this day.
In 1909 Benz & Cie. and DMG then really began to roll out manufacturer-controlled distribution. The two companies did in fact have single company-owned branches prior to that year, but 1909 saw the establishment of five of them at once: in Berlin, Frankfurt, Dresden, Düsseldorf and Hamburg.

From today's perspective it is clear the system of company-owned sales and service outlets proved to be a success. In the meantime the Mercedes-Benz Sales Organisation Germany as part of Daimler AG is responsible for national sale of the brands Mercedes-Benz, smart, Maybach and Mitsubishi Fuso.

The Berlin branch

The first automobile in Berlin was registered in 1902 – it was a Daimler motorcar with the official registration number IA-1. Daimler-Motoren-Gesellschaft also began manufacturing automobiles in Berlin that year. Also that same year, sales and service offices were opened by Daimler-Motoren-Gesellschaft at Königsrätzer Strasse 7 and by Benz & Cie. Rheinische Gasmotorenfabrik AG Mannheim at Kronenstrasse 55.
As a motor vehicle manufacturer, a presence in the capital city was an absolute must: at the turn of the 20th century, Berlin was the dominant centre of German social, cultural and intellectual life – in other words, the ideal place for an aspiring motor company to open sales outlets at the best possible addresses.

1 January 1909 was named as the official founding day of the Berlin sales and service outlet of Daimler-Motoren-Gesellschaft. On that day, the existing showroom at the prestigious Unter den Linden 78 and a separate repair shop were united at one address. Before that the city office of Benz & Cie. had been renamed "Berlin sales office".

Just a few years later, DMG in Berlin inaugurated a house and showroom that combined sales with brand experience and entertainment – a complete innovation for the day. At Unter den Linden 50/51 the "Mercedes-Haus" opened its doors on 30 September 1913. Apart from a pure presentation of vehicles, the idea was to give expression to the company's performance capabilities and the exclusivity of the Mercedes brand in a sophisticated architectonic setting. And so it proved: the building with its elegant architecture, high-quality furnishings and state-of-the-art equipment, spacious showrooms and an exquisite restaurant, quickly developed into a popular meeting place for Berlin society and was soon christened the "Mercedes Palace".

The "shopping experience" tradition lives on in the capital to this day. At the Salzufer site, in use since 1915, after the old centre was totally demolished, the new headquarters of the Berlin sales and service outlet was erected, opening its doors for business in 2000: covering over 35,500 square metres of floor space, here
Mercedes-Benz has combined a dealership with a brand and event world, where every effort has been taken to give centre stage to the car. In addition, Formula 1 and DTM (German Touring Car Masters) races, as well as major football matches are shown on a giant screen. The Berlin sales and service outlet has a total of nine locations.

The Frankfurt branch office

It is not particularly surprising that automobiles of Gottlieb Daimler and Carl Benz were very soon present in Frankfurt am Main: the city and its environs were home to a comparatively large number of wealthy citizens around 1900. Indicative of this was the tradition of foundations that existed in the city on the river Main, together with the highest number of domestic servants per capita than anywhere else in the German Reich.

During the early years of the 20th century, the people of Frankfurt were even responsible for all German sales of Daimler cars for a short time. In early 1904 the firm Flinsch & Co. acquired the exclusive selling rights for Mercedes cars, initially for Hesse, Hesse-Nassau and northern Germany, and the following year for the whole of Germany. Heinrich and Ferdinand Flinsch themselves handled sales in Frankfurt, Hesse and Hesse-Nassau; sub-agents were responsible for the area surrounding Frankfurt and Wiesbaden and for the Reich, which was divided into eight regions.

In preparation for the system of company-owned sales and service outlets, in 1906 the "Generalvertrieb Deutsche Mercedes-Verkaufs-Gesellschaft GmbH" with headquarters in Frankfurt am Main, established the same year by DMG and others, took over the entire dealer organisation. On 1 April 1908 Ernst Berge was appointed managing director of the Frankfurt sales company for Germany. However, one month later Berge transferred the company's registered office from Frankfurt to Untertürkheim. The Frankfurt agency was liquidated, but the business premises were retained. The manufacturer acquired Flinsch & Co. and set up a company-owned sales and service outlet in Frankfurt on 1 June 1909.

Since 1996 the Offenbach representational area has also come under the responsibility of Frankfurt: the Frankfurt-Offenbach branch office currently has six locations, one of which stands out in particular, since without it Frankfurt’s inner cityscape would simply not be the same today: compared with conventional branch establishments, the "Mercedes-Benz Spot" with its top central location is tiny, but spreads an aura of understatement particularly well-suited to the brand. It is housed in a striking building at Kaiserstrasse 19-21, very close to the popular shoppers’ paradise "Zeil" and the exclusive, pedestrianised Goethestrasse.

The Dresden branch

In its early days, the automobile was not an invention that attracted mass enthusiasm. The vehicles even frightened some road users. But one stratum of the population throughout Europe was particularly fascinated by the car, and it had the wherewithal to buy it: the nobility. In Dresden, for example, the Saxon royal court was very receptive to the new means of transport. Upon his accession to the throne in 1904, Frederick August III bought a Mercedes as his first car.

The most important distributor of automobiles in the region at the time was Robert Vieweg. His company held the sales monopoly for Benz, but also sold Daimler cars. In 1905 Louis Glück became the new Benz & Cie agent and had a salesroom on Prager Strasse. In autumn 1908 the men at Mannheim were planning an outlet of their own in Dresden, which opened on Viktoriastrasse on 1 January 1909.

The sales area of Benz’s Dresden branch encompassed all of Saxony. It soon moved to a better location in the city, to the corner of Lüttichhausstrasse and Sidoniestrasse; the repair shop was located at Nicolaistrasse 19. Separating workshop and sales was also a common practice in other cities.

It very soon became apparent that Saxony was too wide an area for the branch office. Dresden was unable to keep up with deliveries, so it opened a further sales outlet in Leipzig in late 1909 or April 1910 – the exact date is not certain.
At the same time, Daimler too was negotiating to set up an outlet of its own in Saxony's capital city – and it was successful. On 18 January 1909 DMG named the Robert Vieweg dealership in Dresden as its sales outlet; the address was Christianstrasse 39, on the corner of Sidoniestrasse.

Robert Vieweg, then 49 years old, was a motoring pioneer. On 9 October 1909 he even set off for Africa in a 1904 Mercedes. His route took him from Dresden through Italy to Tunis and Algiers, returning via Marseille. 6,900 kilometres later he and his sons reached Dresden again on 21 November. Vieweg wrote about his adventures in a
47-page brochure entitled Autoreise durch Nordafrika (By Car Through North Africa); one of the things he did was to count the number of cars the adventurers met on their tour: 82 in all, nine of them on the 1,774 kilometre stretch through Italy. Vieweg, future purveyor to the court, is also thought to be the first Dresdner to have driven through the city in a Benz: this Saxon automotive pioneer bought himself a Benz Victoria on 20 August 1893.

And the Dresden branch can boast another automotive legend: Rudolf Caracciola, the celebrated driver of the Mercedes-Benz Silver Arrow racing cars, began his career in 1924 as a salesman at the Dresden sales and service outlet of Mercedes-Automobilgesellschaft.

Mercedes-Benz again established a presence in Dresden in late summer 1990 following German reunification. Today the branch office has three locations.

The Düsseldorf branch

The Benz general distributors for Rhineland-Westphalia, Rheinisch-Westfälische Automobil-Gesellschaft mbH, were headquartered in Cologne. The Düsseldorf territory was handled by the firm of Carl Mühlberger until the end of 1908. On 17 February 1909 a sub-branch of Benz & Cie. was then established in Düsseldorf. The showrooms were located at Graf-Adolf-Strasse 61, the workshop at Pionierstrasse 6.
The proprietor of the Benz dealership, Ernst Ibald from the firm Autopalast Oberhausen, is regarded as a pioneer of the automobile in the Rhineland region. To begin with, the Benz sub-branch employed six or seven white-collar people, around 15 mechanics and two demonstration drivers.

At Daimler-Motoren-Gesellschaft events went as follows: after a variety of agents who had handled sales in the Rhineland, and thus also sold DMG cars in Düsseldorf, Hermann Weingand of Düsseldorf took over the Rhineland, Westphalia, Hanover, Bremen, Oldenburg, Lorraine and Brunswick areas from the Frankfurt Deutsche-Mercedes-Verkaufsgesellschaft in 1906. Vested with this sales monopoly for western Germany, Weingand opened up a showroom at Königsallee 100 in Düsseldorf, but also sold Adler cars and Ducellier lighting equipment for cars. In 1910 Daimler-Motoren-Gesellschaft then set up its own branch office in Düsseldorf, also on Graf-Adolf-Strasse – the house number 63–65 showing that Mercedes set up its sales outlet right next door to the competition, Benz.

The salesmen were usually referred to as representatives, as we read in a chronicle on the company-owned sales and service outlets in Düsseldorf. One also learns from the chronicle how salesmen dressed in those days: "The representatives of the DMG and Benz sales outlets wear a double-breasted blue suit and blue peaked cap, as well as driving goggles and in the winter a long, heavy camelhair coat and scarf."
In 1999 the outlets Duisburg, Düsseldorf/Neuss and Mönchengladbach/Krefeld were combined into the Rhine-Ruhr sales and service outlet. Following this linkup, the Mercedes-Benz Rhine-Ruhr branch office with headquarters in Düsseldorf is one of the biggest in the world.

The Hamburg branch

From 1888 onwards, engines and automobiles from both Daimler and Benz were also sold in Hamburg through local agents. As was so often the case in the early days of the automobile, the first car and engine lover in the Hanseatic city was a good friend of Gottlieb Daimler: together with Heinrich Remmer the inventor launched the first motorboats in Hamburg in 1889, as Heinrich Remmer Jr. recalled in a letter in 1958. "This boat caused a tremendous sensation on the Elbe."

In the early years of the 20th century the Hanseatic city of Hamburg first belonged to the territory of the Daimler representation in Berlin-Schönefeld, and then to Flinsch & Co. in Frankfurt. The Hamburg sales outlet in the "Nobelshof" was managed in 1902 by the general representative of the Imperial Navy, Alexander Curti. In the far north, of course, there was a particular demand for marine engines. A chronicle of the Daimler Archive for 1903 states: "Daimler marine engines have an excellent status in Hamburg and make for good business."

But neither Alexander Curti nor the next agent, Heinrich Remmer, who sold Daimler motorboats and automobiles along with supplies and equipment for ships at Rödingsmarkt 46, remained sole Daimler agents for long. In 1906 Raffay & Co., which also sold Renault-Frères motorcars, took over sales; the offices and garage were located at Klopstockstrasse 2-4. However, a year later Alexander Curti was asked to come to Berlin to head the DMG marine department at Unter den Linden 78.

Daimler-Motoren-Gesellschaft probably had more than one representative at the same time in Hamburg. After a brief period in which Ernst Dello was Daimler agent,
Raffay & Co. got another chance in autumn 1908. May 1909 then marked the birth of the company-owned sales and service outlet: the chronicle of the Daimler Archive reports that the "managing clerk Mr. Brandy" was appointed by the Marienfelde works to head the DMG sales outlet Hamburg.

Benz & Cie. operated on its own a whole year earlier in Hamburg: an entry for 18 February 1908 states that the Mannheim company was the first company of car manufacturers to open a "registered sub-branch in Hamburg, at Am Plan 6, a busy central location", so the Hamburg chronicle tells us. However, at first it was just a "small shop for one vehicle, with an office at the back." The rights of DMG representative Ernst Dello to sell Benz cars also expired when Benz set up its own outlet. Understandably, displaying just one car in such a restricted space was not effective, so Benz & Cie. looked around for other premises, and in the course of the year the outlet was enlarged and in August moved completely to Alsterdamm 12/13.
Today the Mercedes-Benz Hamburg branch office has a presence at five locations.

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