The first automobile dealers would rather have sold you a bicycle than a car way back at the turn of the century. Most of those pioneers were bike or carriage merchants, blacksmiths or owners of general stores. Automobiles were typically a sideline sold out of barns and blacksmith shops.
Cameras, typewriters and bicycles preceded cars at Ferman Motors in Tampa, Florida which opened an Oldsmobile dealership in 1902.
Back then, you might have been better off riding a bike. Automobiles were as unreliable as the roads they drove on. Also there weren't many roads to support the cars. In some cases, 'dealers' made their own cars (in some cases made from bicycle parts powered by steam, or by gasoline engine).
Early automobile merchants really could not even be called dealers, said Helen Earley, a historian with the Oldsmobile History Center in Lansing, Mich. 'They were selling agents. They only shipped ordered cars. They did not stock cars.'
The Curved Dash Oldsmobile Runabout for example - were estimated to have made $150 gross profit per car. 'They probably purchased the cars from the factory for $500 and sold them for $650,' says Helen Earley.
Oldsmobile had about 45 selling agents for the Curved Dash from 1901-04. Olds produced and sold 425 of these vehicles in 1901, 2,500 in 1902, 4,696 in 1903 and 3,302 in 1904. That would mean the average Olds agent sold 9 cars in 1901 for $5,850 in revenue and $1,350 in gross profits.
Automobiles were a risky business in the early days.
Dealers often had to also be machinists, making some of their own parts. Many early dealerships also sold gasoline. Some offered cars with drivers for rent. Back then, not a lot of people knew how to drive. It was only after 1910 that people became more familiar with the automobile and it became more accepted.
Early dealers were often referred to as 'agents.' The agent system of selling made its general debut in 1902. Some agents operated under a franchise agreement with a seller-buyer relationship.
Factories needed agents not only to store and display their inventory but also to offer cars for test drives. The public had to be convinced that cars were reliable. Franchise agreements required dealers to stock a specified number of vehicles before each selling season, keep a minimum number of demonstrators in stock and be able to repair vehicles.
Distributorships came into general use from 1903-10, giving factories broader representation. Those were strong dealerships that took on some of the factory's financing, storage and distribution headaches. By 1910, many franchise agreements required the master dealers to appoint subdealers in their territories to give the factories greater exposure.