NeXus RV Rolls into Manufacturing, Sell-Direct
In the middle of the Great Recession, when the door for new opportunity was closing for many in the RV industry, Claude Donati and Dave Middleton saw potential in starting an RV manufacturing operation that sells directly to customers.
Born out of what Donati saw as an era for customer neglect, NeXus RV came to be in July 2010 after Donati and Middleton left their previous posts at Gulf Stream Coach.
“A couple of factors played into the decision (to start NeXus RV),” Donati said. “With the economic downturn, a lot of dealers disappeared and there were a lot of customers calling from hundreds of miles away with questions, and without a local dealer, other customers started buying on the Internet. I saw it as an opportunity to fill customers’ needs.”
Coming from Gulf Stream, Donati said both he and Middleton had a unique insight into manufacturing and believed sharing the process of building the entire unit with customers—the ins and outs of manufacturing—would build better customer rapport, create a higher-quality unit and save customers upwards of $6,000 on a $70,000 purchase.
“By July 2010, we already developed a broad outline of a business plan and spent all last fall developing and planning it,” he said. “We closed on our property Nov. 1, bought chassis already available in Elkhart from other manufacturers, and on Feb. 14, started production on our first unit.”
A first unit that nears completion this spring, Donati said, and that will become part of NeXus RV’s current product offerings: the Phantom and Viper.
The Phantom, Donati said, is a traditional Class C, exclusively built on a Ford chassis, and will feature five different floorplans with an MSRP of $58,000. The Viper is a Class B+, also built on a Ford chassis and will include three floorplans with an MSRP of $63,000. And in three years, Donati said NeXus RV plans to produce a Class A model with an MSRP of $91,000.
“Our MSRP is our advertising price, which does come in much lower than everyone else’s,” he said.
By selling direct, NeXus RV eliminates the dealer and resulting price markups, which allows it to produce its product at a lower price, the company said.
“We feel we are experts in the motorized market, but also, by selling higher-cost units we are also able to save the customer more money,” he said. “If we were to sell travel trailers direct, at $7,000, eliminating the dealer would save customers maybe $1,000, as opposed to $7,000 on a $70,000 Class C model.”
The savings on a travel trailer, Donati said, would not be worth a customer buying it from him direct.
“Because we don’t have the middle tier of selling to a dealer, show expenses or transportation expenses, we are also able to put more money into the product and offer some unique construction options and better components to the customer,” Donati said.
For example, NeXus RV offers a low-alloy steel frame construction on its Class Cs that is high in strength, but lightweight. NeXus RV said it is also not using any luan (wood) substrate, but instead, Azdel, a composite fiberglass material that is lighter in weight and doesn’t retain water or contract and expand like wood. Azdel, Donati said, isn’t impacted by water, thus eliminates mold and fiberglass cracking.
He also said customers will be able to choose from 10 “NeXclusive” features he is in the works of developing.
“By not relying on a dealer body, we are taking on customer conversations ourselves,” Donati said. This, in turn, he added, includes the customer in the manufacturing process, allowing them to tell NeXus RV what they want.
In building that relationship with customers, Donati said NeXus RV has to build trust.
“We have to put you, the customer, in a position to buy from us with the same intimacy (as a dealership) only on a long-distance scale,” he said.NeXus RV has an on-site studio, where a unit can be driven in and Donati or another representative from NeXus RV can take a customer through every component and switch, demonstrate the unit’s functions and answer customer questions all in real time.
And, if the customer likes the unit, NeXus RV promises to pay their plane ticket out to its facility with the “NeXus Fly and Drive” program.
“We fly you in, give you a plant tour, give a walk-around presentation on all of our models, and a place to stay,” Donati said. “If you fly in and buy from us, we reimburse your ticket. We want to eliminate any reason why a customer wouldn’t buy our product.”
And before a customer leaves the facility, Donati said NeXus RV has 15 hookups where he encourages customers to stay one to two nights with a newly-purchased unit to get familiarized with it and to ensure any problems with the unit can be resolved before the customer hits the road.
“I really see this as an opportunity others in the industry haven’t taken advantage of yet,” he said. “It’s a great way to optimize the RV experience.”
Currently, NeXus RV is producing one unit a day. By year two, the company would like to be producing one-and-a-half units and by year five, four units.
“Moving forward we’d like to end up with 300 service centers,” he added. “From a pride standpoint we’d like to say our business model will transform the industry because it is so advantageous for the customer, it’s going to change the way RVs are sold.”