"We Tripled the Store!" — Critical Playbooks for Used Cars, Service Growth and Beating Big Groups | Kyle Coleman, Rob Ruth, Scott Simons
Car Dealership Guy Podcast
"We Tripled the Store!" — Critical Playbooks for Used Cars, Service Growth and Beating Big Groups | Kyle Coleman, Rob Ruth, Scott SimonsCar Dealership Guy Podcast · Jun 16, 2026
“Blue sky” is money paid for a business’s future potential, not just the stuff you can point to like buildings or inventory. Think of it as paying for the store’s earning power.
“M&A” means mergers and acquisitions—basically buying companies or combining them. Here, it’s about dealership groups being bought and sold, not just individual cars.
A “stair step program” sounds like a staged plan with different levels over time. In this context, the host is saying it can lead to too many cars sitting on the lot.
Nissan is a car brand. The speaker is describing their experience running a Nissan dealership and how Nissan’s dealer requirements and incentives felt complicated during a tough time.
In dealership language, “programs” are structured manufacturer plans that dictate how retailers should operate—often including sales/marketing campaigns, training requirements, and incentive structures. The speaker’s core point is that simpler programs are easier for dealer teams to execute correctly, reducing the chance of costly mistakes.
“Incentive issues” refers to problems with manufacturer or program incentives—such as targets, eligibility rules, or how incentives are calculated—that can derail a dealership’s expected results. In this segment, the speaker argues that when incentives are hard to understand or execute, dealers pull back to avoid repeating mistakes.
Toyota is a car brand. The speaker is basically saying they’ve not owned a Toyota dealership, but they’re still comparing how different brands structure dealer programs.
Chevrolet and GMC are two car brands under the same company. The speaker is saying they bought a dealership that handles both brands, which matters for how they plan to grow their business.
“KISS” is a common acronym meaning “Keep It Simple, Stupid.” In this context, the speaker is advocating for simple dealer/manufacturer programs because complexity increases the odds teams misunderstand steps and miss incentive outcomes.
Genesis is a luxury line made by Hyundai. It’s the more upscale version of the company’s vehicles, and it’s often sold through special dealership setups. The podcast is likely talking about how those stores are built and presented.
They’re talking about remodeling the dealership or building a new one. The claim is that doing so can boost revenue, partly because the store can handle more work and customers respond better to a nicer setup.
cdgapp.ai is the website for a dealership-focused platform. The hosts say it helps dealers compare their performance and learn what other dealers are doing.
Here, throughput just means how many cars the dealership can handle per day or per month. If you have more space and equipment, you can serve more customers instead of getting backed up.
“Bays” are the garage spots in the dealership where cars get worked on. If you have more bays, you can usually fix more cars because you’re not waiting for space.
A “ticket” is basically a job order for a customer’s car—what work is being done. “CP tickets” means customer-paid service jobs, and the monthly count shows how busy and productive the service department is.
Customer experience is how customers perceive the dealership journey—before, during, and after the sale or service visit. In this segment, the host argues that a new, attractive facility can improve that experience and correlate with higher sales.
Concept
waiters
In this context, “waiters” is dealership shorthand for customers who are physically waiting in the store while their vehicle is being worked on. The hosts argue that this creates pressure on advisors and technicians and can lead to skipped steps because everyone is trying to keep the customer from waiting too long.
Pickup and delivery means the shop comes to get your car and brings it back after they’re done. It helps you avoid sitting around waiting at the dealership.
CSI is a score dealerships use to measure how happy customers are with the service experience. It can affect how advisors are judged and how they manage the process.
This means the dealership sells a lot more used cars than new ones—about 8 used for every 1 new. The speaker is saying that kind of mix can be a deliberate strategy.
“Fixed operations” is the dealership’s service and parts business. Instead of making money mainly from selling cars, you make money by fixing cars and selling parts.
“Sourcing from the street” means buying cars directly from regular people. Instead of going through dealer auctions, you find cars where they’re being sold privately.
Auctions are places where dealers buy cars in bulk from other sellers. Instead of buying one car at a time from a person, you bid on cars through a dealer system.
PVR is a dealership tracking number (an acronym) that helps measure how well the store is turning customers and vehicles into money. When the host says it was down, they mean the store wasn’t doing as well on that specific metric.
FNI is a dealership acronym for a specific money-related performance metric. The host is saying that metric wasn’t doing well in their used-car and parts/service situation.
ROI is a simple idea: how much money you get back compared to what you spent. The host is basically asking, “How fast will this dealership start paying me back?”
This means using your own assets as security to get a loan. Instead of bringing in new investors, the host funded the dealership purchase by borrowing against what they already had.
“Open book” means being transparent about the business numbers. The host is saying they share information so the team understands what’s going on and why.
This is the process of resetting what the team is supposed to do and then training them again to match the new plan. The host is saying not everyone agreed with the new expectations, so some people left.
A Suburban is a large SUV (usually with lots of seats) that many people buy for family use. The host is saying their dealership sells everything from cheaper cars up to very expensive Suburbans.
A franchise is basically the dealership’s permission from the car company to sell its cars. The host is saying they chose the best “dealership setup” they could get.
The Chevrolet Corvette is a well-known performance sports car from Chevrolet. The host brought one to a school event to get attention and talk to students.
“Expenses” are the dealership’s operating costs—things it has to pay to keep running. The host is pointing out that costs didn’t rise much compared to the profit increase.
The FTC is a U.S. government agency that helps protect consumers from misleading advertising. If it changes the rules, car dealers have to show prices and fees in a way that’s easier to compare.
This phrase means the rules got changed so one side doesn’t have an unfair advantage. In this case, it’s about making dealer pricing comparisons more fair for shoppers.
Accessories are extra add-ons the dealer sells with the car, like add-on packages or add-on items. They can make the final price higher than what you first thought.
A dock fee is a dealer-added charge for moving the car to the dealership. If it’s shown clearly (or hidden in the fine print), it can make one dealer’s “cheap” price look higher once you add everything up.
A rebate is money back from the manufacturer. When it’s tied to MSRP, it usually means the discount depends on the car’s official sticker price and eligibility rules.
“Top of the fold” means what you can see on a webpage right away, without scrolling. Here it’s about showing the important price information where shoppers will immediately see it.
Term
Web 101
“Web 101” here just means basic website basics. He’s saying the pricing should be shown in a way that’s clear and not confusing to shoppers.
Term
Simons says price
“Simons says price” sounds like a specific pricing setup or rule their dealership uses. The point is to show a competitive price while keeping the fee/add-on structure clear.
Podium is software dealerships use to message customers and keep leads from going cold. Here it’s being used to follow up after someone shows interest but doesn’t buy right away.
Cox Automotive is a company that provides software and services to car dealerships. Here, the point is that their platform can limit how dealers can message people who are selling cars online.
A buying center is a place and process for buying cars, usually from people who want to sell their vehicles. The idea is to set up a system (people + tools) so the dealership can acquire more cars efficiently.
Auto Trader is a website where people list cars for sale. The speaker’s complaint is that dealers may not be allowed to contact private sellers through the site, even though the listing is public.
For sale by owner means the person selling the car is doing it themselves, not through a dealership. In this segment, it’s the type of seller the dealership wants to reach through online listings.
“Net to sales” is a way to measure how much profit you keep compared to how much money you bring in from selling cars. If the number is higher, the dealership is usually making more money per dollar of sales. It’s basically a “profit efficiency” score.
“IMR funds” are money from the manufacturer that a dealership can use for marketing. The host is saying you have to use it in a certain way and it can expire if you don’t deploy it. It’s meant to help dealers advertise, but it comes with strings attached.
GM’s program here refers to a manufacturer-funded dealer initiative that provides money to support marketing or sales activities. The key idea is that the funding is tied to specific rules and participation requirements set by the manufacturer. Dealerships often weigh the benefit of the money against the constraints and costs that come with it.
“Low hanging fruit” just means the easiest wins first. Instead of tackling the hardest problems immediately, you start with the things that are most likely to work quickly. The host is saying that’s how they began deploying their plan.
Term
GMR more funds
“GMR more funds” sounds like another pot of manufacturer money for dealership marketing or promotions. The host is saying you may have to put in some amount (like a percentage) to qualify, and if you don’t participate, other dealers will. It’s basically a “join the program or lose the opportunity” situation.
Here, “capacity” just means how much work the shop can handle at once. If they can fit more cars into the schedule, they can do more service and make more money.
“Hours sold” means how many hours of work the shop actually billed customers for. More billable hours usually means the shop is busier and earning more.
A “full synthetic” oil change uses higher-grade oil made for modern engines. It can cost more than regular oil, but it’s often chosen because it holds up better.
A “loss leader” is a deal that’s intentionally priced to be very attractive, even if the shop doesn’t make much (or any) profit on that specific item. They’re trying to bring you in so you’ll do more business with them later.
Concept
independence
In this context, “independence” means independent repair shops (not dealership service departments). The hosts frame the competitive battle as dealers trying to win back customers from independents by competing on price and perceived value.
Concept
perception
They’re talking about what customers think is true about pricing. Even if the dealer’s service is actually competitive, people may still assume it’s more expensive because of the dealership brand.
OEM parts are the same type of parts the car maker uses on the original vehicle. Dealers often use them because they’re made to match the car, which can make people feel more confident about the repair.
Certifications are official training credentials for mechanics. The point here is that dealership technicians have been trained and tested to meet the car maker’s standards.
An RO (repair order) is the paperwork that starts the work in a service department. “Customer pay” ROs are jobs where the customer is paying for the service. They’re saying those customer-paid work tickets jumped after the oil-change deal.
A blended rate is an average labor price across different kinds of service work. If more customers come in for a cheaper deal, it can change that average. They’re debating whether their overall average labor rate went down or actually improved.
MPI means multi-point inspection. It’s a checklist your shop uses to look over different parts of your car and find anything that might need attention. Here, they do that inspection every time someone comes in for an oil change.
Effective labor rate is what the shop actually earns per hour for labor, averaged across the jobs they do. If you sell a cheap service, it can lower that average. They’re saying the director thought it would drop, but instead it went up.
The F-150 Lightning is a pickup truck that runs on electricity instead of gasoline. It’s built on the same general idea as the F-150, but with an electric motor and battery. People talk about it because it’s a popular way to get an electric truck.
LIVE
One dealer here recently acquired their first Chevy store.
Another one has purchased seven rooftops in under two years.
And another one is one of the highest volume four dealers in America.
Welcome to the dealer war room, where we talk about the real stuff
that's happening behind closed doors in the car business.
Let's get into it.
Kyle Coleman, tell us how you really feel.
Tell me how I really feel.
Well, I mean, if you turn on the news right now,
I'd say that there's a bleak view of what's happening.
But I mean, I feel great about the auto industry as a whole right now.
You know, of course, there's a lot of turmoil and, you know,
I feel like leads as a whole are down, but I feel like the leads
that we're getting are higher quality.
So like I have a good outlook and especially I mean, I hope I do, you know,
because my goal in the next seven years to buy 40 stores.
So, you know, I have to have a strong outlook on things.
But I feel like even in a weaker market, there are dealers that win
and there are dealers that lose.
You've been very acquisitive.
Seven stores in what, 18 or 24 months?
24 months, yeah.
Okay.
So what are you seeing right now?
Like we don't want obviously the conference room answer.
And I'm not suggesting you're going to give us that, but like really
on the on the ground floor right now, when you're looking at these deals,
which you're looking at daily, what's out there right now?
I mean, there's anything that you could want out there from small
rule stores that are trading for just real estate to mega 15 rooftop.
You better have a very, very big checkbook out there with every brand.
It's just that, of course, you know, there's far less for each of the left
and the right on that side of things, right?
You know, they're not everybody wants to be in a town of a thousand people
and not everybody's got a checkbook to write a billion dollars.
I would say right now, I'm seeing the market normalize.
I'm seeing the market normalize.
I'm seeing actual prices trade for what they should trade for.
What does that mean?
So a store that transacted two years ago at a eight multiple.
So, you know, hey, let for easy math, it makes a million bucks.
It's it sells for 8000000 bucks.
Well, that store really should probably trade for 6000000 bucks at the most.
But because that's the differences is like M&A in the automotive space
compared to M&A's and most other industries is substantially different.
You know, everybody looks out and say, oh, well, you know, most
industries outside automotive are trading for extremely, you know, 10,
you know, tech multiples are unbelievable, especially in the AI world.
But I mean, they also don't have the capital intensive side of things.
I mean, what we pay for real estate, what we pay for inventory on day one,
everybody looks at we pay, you know, 20 million dollars for blue sky for a business.
We probably have a substantially bigger check that we're writing
at closing the 20 million for blue sky when you add in, you know,
15 million dollars in inventory and another 13 million for real estate.
So it's just not one piece on our side of the world, you know, when we're buying it.
But right now what I'm seeing in the M&A market is things are starting to get back
to reality. I looked at this Hyundai store and it was doing very, very well 12 months ago.
And they wanted a 10 multiple 12 months ago.
The store is not doing as well now because, you know, there's why.
Well, I'm their stair step program, bloated inventory.
You know, big issue, by the way, the the stair step, like that's gotten into,
you know, that's crept into the overall zeitgeist.
People have been talking about that.
We actually we received like an anonymous email about that.
I have dealers texting me about it, literally, like one dealer asked me to download
signal, right, like a confidential encrypted communication app.
So you could send me something.
It's it's interesting because it's not like people don't want to speak up about it.
I understandably no one wants, you know, retaliation, but it's a it's an issue
for for lots of hundred dealers out there.
Or you're not a hundred dealers.
I'm not. No, I'm a Nissan dealer and three times three free time.
I have three Nissan stores and I love Nissan.
Nissan's where Nissan's headed is they're they're headed to the promised land.
And, you know, 12 months ago, when I called you actually over just over 12
months ago, I called you and I said, what do you think you remember the conversation?
I said, what do you think I do?
I'm about to I'm under contracted by my first Nissan store.
And you told me, you're like, man, I'm bullish on Nissan.
It was it felt like it was the trough.
Yeah, you know, just like CDJR a couple years before that.
And Ford Ford had the whole EV thing.
So like it's it's just cycles.
And it was like, look, you're taking some bet, right?
It's like there is a, you know, what is that called in the options trading
like a straddle? I could be completely butchering this.
I'm not an options guy. I'm not an option.
But you know, there's like this like stock trading
strategy where you're just betting on the volatility one way or another.
But basically, to me, it's like you're taking a bet.
Either it's going to fall down or it's going to shoot back out.
But volatility is certain.
So well, the crazy thing is that first store that I bought is one of my most
profitable stores in a Nissan Nissan.
Oh, yeah, my Nissan stores by far my most profitable stores.
And there's a lot of reasons why, one, they have eight models
starting under 30000 dollars, including a truck.
What other brand has that?
Not only that, on top of that, their stair step programs.
Easy. There's no math that at the end of the month, you have this equation
of this, this and this, all these things that you have to figure out
whether you hit it or not.
Oh, we missed it because of this antiquated old metric.
No, it's you either sell X amount of cars or you don't.
And, you know, we every single month, we're 100 and forty
hundred and fifty percent of our objective and the realistic objectives.
You know, like that's the other side of things is most of the other manufacturers
that, you know, they change the target, the bar. Yeah, they raise the bar.
You hit it, then the bar goes up and it keeps going up, keeps going up.
I mean, that's interesting because not many Nissan dealers are in that boat.
Do you think your geography has to do with it?
The fact that you are in these more rural markets and.
I mean, if you want the honest take of it, I feel like that all the other dealership
Nissan, if you've had been a Nissan for a long time, you probably have whiplash, right?
They they they're they're still thinking Nissan's what it was.
And they have this mindset of like, well, it's just going to go back.
I'm not I'm fresh to Nissan.
So like I'm coming in with a new take, like I'm coming in with the mindset
like you can either choose to think about the past or you can think about the future.
I'm thinking about the future.
I'm thinking that in the last six months, while every brand, including Toyota, Honda,
Hyundai, Kia has seen a reduction in market penetration, Nissan has picked up market share.
So think about that. How how is Nissan when they say new car sales is flat
and this and that and 12 months ago, there was conversations of whether Nissan is even
going to be around when I first bought my first store.
I'm investing millions of dollars to buy and I come out and I say, all right, well, hey,
let's roll the dice. And now we're in a position where 12 percent were the fastest growing brand
in the United States right now. So I feel like I knew something 12 months ago.
The leadership at Hyundai came from Nissan.
And I was a Nissan managing partner when Nissan went through the struggle.
And what happened was you had to dump money into facilities.
You had to hit crazy stair steps and you didn't really understand the programs.
And let's be real, a lot of people get in the auto industry because of the low barrier of entry.
We're not me. I didn't crack the thousand on the SATs.
You know, I didn't test well, but I was hungry.
So if you overcomplicate a program for a retailer dealer,
and then if the team messes it up, you immediately go into office that you see,
man, you know, we got these incentive issues. We've got these issues.
You thought you were going to make this make that.
So then you pull back because you don't want to make that mistake again.
And the reason why manufacturers have excelled such as Honda, such as Subaru,
such as I've never been a Toyota dealer, but it's because they keep their programs simple,
simple programs. So if you would simplify or if he would simplify talking about Hyundai,
Hyundai, what they did at Nissan years ago, which has taken them a while to rebound.
And I'm also pretty bullish on Nissan. I would buy an Nissan store.
I'm actively looking to purchase a second store now after purchasing a Chevrolet GMC
dealership back in November. I do believe that brand's coming back, but Hyundai,
and I do have some experience with Hyundai. It's because everything's complicated and you've
got to do A, B, C, D to get E. So you're saying simplicity?
Simplicity, simplicity. And you know what? Kiss, right?
You know, our facility, our facility in Little Whiteville, North Carolina is a decent facility.
It's clean and it gets the job done. And it's like 15 years old and people don't come there.
And they haven't decided to do business with us because of our facility. They choose to do business
with us because of the people that are there and how they're treated both online and in the facility.
It doesn't matter what our facility is. It could be a gravel parking lot.
Now, do we need some amenities? Yes. Do we want it to be nice?
Yeah, but it doesn't have to be this futuristic thing where we have to spend millions of dollars
on a facility. And that, unfortunately, is if you really look at and talk to Hyundai dealers,
you know, and I probably will never get a Hyundai store after this conversation,
but however, you know, I've got to be honest. It's because of the facility requirements and then
complicated programs that are making the Hyundai stores participate in.
Hyundai and Genesis are the most expensive per square feet build
out there besides luxury brand. It's the most expensive. It's the only one that's more expensive,
I believe, from talking with the company that's building one of my stores right now
for a remodel is like Mercedes and Cadillac. I'm the poster child for facility doesn't matter,
okay? Why? Why is that? Well, our store was built in the 50s, and I think we've had one renovation
since the 19th. And truthfully, my father and I were, we were in the process. We bought land
adjacent to the store, not even adjacent down the street. He had passed away. Unfortunately,
that project never happened. So we're still operating in a store that was built in the 50s.
Okay? We sell 400 cars a month in a town of 2,700 people. Our CSI is great. We outsell our market.
It's not the facility. It's exactly what you said, Scott. It's the experience you give people.
It's the trust that they have in you. It's, you know, the business that you run not,
they don't come there for, for that building. And honestly, the majority of our business today,
we start online anyway. So we're communicating with people. They don't really even want to come
to the facility. Most people don't even want to go to the car dealers. So why these demands that
these manufacturers have on us for this retail facility that I think in the future isn't even
going to matter even, it's going to matter even less, doesn't make any sense. All right. Real
quick, before we get back to the episode, I want to share with you something special we've been
working on for months. The CDG dealer platform. It's built to give your dealership a competitive
edge. Benchmark your performance against thousands of rooftops. Get honest vendor feedback from
other dealers and see what's working across the industry right now. Check it out at cdgapp.ai.
That's cdgapp.ai or click the link in the show notes. So there is a statistic that shows that
if you redo your facility or build a new store, you see a revenue increase between 20 and 25%.
And I've been a part of multiple builds as a general manager. And there is. You have additional
throughput. It makes you, it's almost like it changes your belief in what's possible in a store,
right? You have more bays. Then read that, you know, because like that's the thing is,
a lot of times as operators, we, we're the only business that justifies low performance with
saying it's the car business, right? So, oh, we don't have enough bays. Well, so it's funny. I,
one of my operators, general managers at my store reached out to me and we're in that,
that store is actually in the process of getting a full remodel. We're spending $3 million to redo
the whole, you know, build out, add 15,000 square feet to the facility because it's like,
we're outgrowing it tremendously. And they said, well, we can't do service. We can't keep up with
service because of this. And I was like, guys, you have, you have nine bays. And they're like,
that's not enough. And I'm like, well, here, that's interesting. I was like, I know a Honda store
that did 2000 CP tickets a month with eight bays. I was like, do you want me to, I was like, so,
or is he better than you? Like, you know, of course, that's how I challenge, you know, and of
course, no, no, of course, right, right. No, the next month, the store, because I challenged my,
my leadership at the store, they had the best fixed month that the stores ever had in its history.
You know, so like that mindset, but I will tell you, like, there is something about a customer
experience walking into a new beautiful facility. And like, you, you do see a rise in your sales,
whether, whether it's just a mental clarity for the customer wanting to come in and their, their
experience through it. But I've been a part of it and seen it happen. I'm not against it. I'm just
saying it's not a necessity. Oh, no, yeah, you can be on the man from the manufacturer. That's the
only, well, it should be your choice. That's right. It should be the right choice. It shouldn't be
dictated to us that our grout may be a little bit dirty and you got to get down at the toothbrush
to clean it. Now we all want clean facilities, but that shouldn't be dictated to us that have
spent the millions of dollars. It should be his personal choice, your personal choice. I have seven
manufacturer agreements that says different though. Well, you know, oh, but yeah, you know,
like that's, that's the whole thing is, I mean, all three of my Nissan store, well,
two of my Nissan stores, my newest ones in a brand new facility, it's only like a year old.
I mean, that's my Chicago store, but all my other ones, it's sunk in there like, hey,
you know, you got to do this. And I'm sure there's flexibility if I really wanted to,
but like, I want to invest in my store because I want to invest in my brand. And I agree.
My differences is like, while I think that you, we should update our facilities to look like the
new branding because like there is so cohesiveness across the industry. If my store looks like this
store, their customers getting, you know, we talk about getting the same customer experience. Well,
if your store is older and four generations back, if they service at their, you know, their location,
like they have two houses and they go into one, like they're getting a different customer experience
in the sense of how they feel when they're in the store. But my thing is, is do you have to build a
50,000 square foot facility? You could give that same. That's why I think sometimes the manufacturers
get hung up on you, you know, you have to build this monstrosity because you're from your, your,
you touch this many ROs because they have these equations that says this is how much square feet
you have to build because you're planning volume and how many customer pay ROs you do on a monthly
basis. And the funny thing is, is we're doing remote service at most of our stores and picking
our cars up. We see, we on average see just as many customers that don't walk in our stores' cars
as do walk into our stores. We don't want waiters. Yeah. Right. I mean, I think pickup and delivery
is the smartest thing ever. Exactly. Do you do it? Oh, absolutely. I mean, I think
for years trying to solve the problem, you know, customer comes in, they're waiting, you're on
the clock. Okay. Now tech doesn't want to work on that because it's like, Oh, I got a waiter.
So everyone is hustling and you skip steps. Now this solves a problem customer never has to come
in the store. You're making it more convenient for them. You're not putting your tech under the
pressure. He actually does a good MPI and looks over the car. We can make good recommendations.
The customer has time. It's just a win-win for everybody in my opinion. Do you do pickup and
delivery or do you do mobile service or both? We do both, but mostly pickup and delivery.
Interesting. And I'm surprised because that's usually you see that in urban markets. You're
not in an urban market. You're in a rural market. That's what I keep trying to even tell my people,
like it doesn't matter if they live right behind us. Let's pick up their car and not have them
have to come here. Well, they're our benefits. We have a Ford dealership. Ford pays us to do that,
though. Well, they do pay. Besides that, though, it's bigger than that. I agree. I agree. Honestly,
it just, if you, if you've listened to your techs, they don't want to work on waiters, right?
The advisor is on the clock. Okay. We've got CSI to worry about. The customer sitting in the
waiting room looking at their watch, how much time does this can take? How much time does this
can take? I got to be here. I got to be there. This solves a problem for everybody. Gives us
more time to actually look at the car, make the right recommendations and gives the customer
time to make an educated decision on what they do and don't want to do. I think the other thing, Rob,
about your dealership is where you're an anomaly or an exception is you're eight to one used to
new, right? Correct. You mentioned that to me. How, how did that come to me? That's a very,
that's very lopsided and it's great. I'm sure it's very profitable. But tell us about that.
If you're a domestic dealer in a small market and you're overloaded with other dealers in your market,
okay? You got to differentiate. figure out how you're going to grow. And to me,
it didn't take me long to figure out the more used cars I sold was growing my fixed operations,
growing service, those growing parts. It just feeds the whole machine. And honestly, it was,
and it gives you freedom to operate the way you want to operate as well.
How did you build that apparatus? Like you mentioned also sourcing
lots of used cars. What's the number that you're sourcing from the street?
So last month we sourced 305 off the street.
Okay. Tell us about that process. Like, what do you pass, please?
Well, we were, we've been a volume store even pre COVID. COVID happened. All right. We, we
liquidated inventory for the, at the wrong time, because I thought I had to, I mean,
it was just cash flow. I mean, we were frozen, Pennsylvania government shut us down,
had to get the, the money turned in again. So we're fire sale used cars.
Well, then all of a sudden everything goes through the roof and wholesale is,
is faster than retail at times, especially in a small market. Yeah. So I'm like,
we would source 90% of our inventory from the auctions, couldn't buy from the auctions.
We'd just brought people back. I'm like, well, we're going to have to let people go
if we don't have any inventory. So literally, I mean, I got on Facebook marketplace myself. I
started messaging people the first day I bought five cars. And I'm thinking, Oh, wow. The second
day I bought another five or six cars. And it was easy. like, I'm doing a service for
my community, not, not just I'm buying cars. I'm like, I'm helping this person sell their car.
So at that point in time, I knew like, there's something here and we've, we've got to scale it.
And it can't be me every day doing it. So then we're expanding to our sales force.
And then we added a single person that we, we reach out to people to have the car for sale.
And we make it easy for them to sell to us. And then we have six people in that acquisition
department. We have a 300 mile radius and we'll go to you. We transact in your driveway. We site
on scene, give you an offer on the car. We just make it. So how do you, what is your, what are
your sources right now? Facebook marketplace is one Facebook auto trader, Craigslist. Yeah.
Any like for sale by owner, you're just reaching out to them. Any for sale by owner. I mean,
our people are creative. We're reaching out to other dealers. I mean, we're buying aged inventory.
We're reaching out to dealers that, you know, word use car oriented, not every
the franchise dealers use car oriented. So, you know, we try to make relationships with,
you know, dealers in our market. Hey, if you're looking at a car and you, you don't want to keep
it, let us put a number on it. And we're just scaling that acquisition department that we
don't have to rely on the auction. And what else tell me, tell me more about the operations and
care is, so you, you find these, you know, different people to buy the cars, do you cut them a
check on the spot? We cut them a check on the spot or we can do a direct wire to, to the,
to the client. We just wire the money into their, into their account. Now we'll send drivers out
to with paperwork, we inspect the car, the drivers won't inspect the car. They'll call back to the
gentleman, whoever, whoever put the money on the car if there's an issue. And then if there's an
issue, but honestly, there's not, I mean 95% of the time there's, there's really not. And the other
5%, it's, it's still worth it to do it. And we were talking earlier, I mean, our cost to market on
our acquisitions off from off the street versus auction, there's a, there's a 7% spread. Okay.
And also we're building our brand because it's not only do you, we sell cars, we help you,
we help you sell your car. So, you know, we've made a lot of relationships with people.
How do you, how do you combat against fraud? Like you're wiring someone's information, frauds on
the house. I mean, listen, this hasn't been like a, just a, like a perfect situation. We, we faced
all these things. Yeah. And each time we go through something, we, we find, you know, things that we
need to do better. Or your insurance policies. That's right. We have a fraud boy. Oh boy.
There's no perfect world. And I'm not going to say that this may, this may not be for everybody,
but for us as use car operator in a, in a small market with, with one store at this point in time,
you know, it's just something we've all committed to and we're going to keep growing it.
So do you pay them hourly and then bonuses when they acquire?
Our, our acquisition team. Yeah. Yeah. We, they get a salary and they get a, you know,
they get a commission per units that they purchase. Our top buyer, one of our top eyes,
one or two very close is a single mom that works from home as two little kids. I mean,
she buys 60 cars a month. Wow. Now, that's why people were like, well, who do you,
you don't need a car guy. You need a communicator. All we're doing is providing a service to people
and someone that communicate with them and just, you know, facilitate in a seamless way. That's
what works. I mean, I love what you said earlier. Like, I mean, it tells what type of leader you
are at your store and why your store is done so well is like, you started it though. Like you,
like sometimes as a leader, it's one of those things. It's like, you know, we have to unbuckle
that seatbelt and, you know, show someone that's possible versus tell someone it's possible. Like
that's, like that's what I talked to all my executive leadership and across my company. Sometimes
as general manager, you know, we, we have to get out of our office. You know, I have a test
anytime I go to one of my locations, sometimes I'll just walk around and pick up trash. Like I,
I, it goes. I've been fortunate enough, I grew up in the car business and, you know,
my dad bought the store and him and I alone lived in an apartment above the store. So I
started working there when I was six years old, taking out the trash, you know. So I had responsibilities
and, you know, God bless, God bless him. He, he made me work. You know, I started in recon,
I started as a sales rep, you know, then I worked into finance and then became, you know, sales.
I went through those ranks. So I think it gives you a good perspective of the people and how hard
those jobs are when you've actually done it, you know, and I think being relatable with people
versus, hey, I'm the, that doesn't work in the case. Oh no, no, yeah. No, I understand. Like,
it's funny when people hear like my, my progression to this, you know, when I was 16 years old,
my first job was, I was a detailer at a car dealership in my hometown, a used car dealership.
Yeah, it was my first job ever. So like, you know, hey, I started in detail when I got out of high
school, I started in sales and, you know, the progression from there to, you know, where I'm
at now, I mean, it's amazing. It's you, it's, it's given me a clear path of how difficult the
jobs that we ask people to do. And sometimes it's easy to forget as an owner or an operator,
you know, the, the place that they're in. So, you know, I just, I love to hear that, you know,
hey, you started it, you reached out personally, you know,
was out of desperation. I'm going to say that a little anxiety, like, what am I going to do?
What found a solution? And then it was like, okay, we got to go, you know, we just got to,
we got to make this happen. And some of the best things are born out of fire. And it was like,
one of those things, man, I should do this for years. I'm like, man, we should really start a
buying center too. I must do this right now. Okay. And that was, that was where I was at.
So Kyle, you started us off with your take on a market. Scott, what are you, what are you
thinking about the market right now? What's the health? Yes. Well, we purchased a dealership in
November. It was under producing dealership in a rural market. North Carolina, right?
North Carolina. Yeah. It was a Chevrolet GMC dealer. And the dealer, great guy, just struggled.
And the dealership was losing, you know, quite a bit of money. Of course,
you, when you purchase a dealership, it's not what it's doing. It's what it could do, right?
When you look at multiples and that's what they tell us. Yeah. Yeah. And that's what they want
to try to tell us, right? So I wanted to purchase the dealership, you know, $2 million and below.
By the way, it wasn't like that in the past. Like we're talking, you know what I mean? Like what,
like there was some point in time that I missed, apparently, where all these businesses and dealership
and real estate went from this is what it's doing to this is what it could do. So I'll just,
I'll just put that out there, but go ahead. So when you, you know, when you work with a company,
I worked with Bill Moore Group that helps you acquire your first dealership. You give an area,
North Carolina, South Carolina, Virginia. These are the franchises they're available.
Out of the franchises are available for me, Nissan, CDJR, Ford, Volkswagen,
Chevrolet, GMC, that I had had experience with those brands. I'll see you over company for
like nine months. I got to see all the brands and I said, well, that's when I would like to
target and it was in a warmer climate. So I started to look at the financials, you know,
first of all, PVR was down and FNI did not perform in used cars, service of parts,
basically non-existent, had a couple hundred dollars, I could raise the dock fee. So I started
looking and said, okay, when can I get return on my investment? How quickly could I get the money
back? I was smart with my money over my career and I leveraged my own money. So I borrowed against
myself to put down toward the purchase of the, it was 6.9 to buy the dealership and I'm an open
book. I, people say you share too much information. Well, I don't, I just share because I believe
when you've been fortunate, you should share with other people that would like to go down the
journey you've been down. Cause there's a lot of people, it was all your personal assets. Yeah.
Always it's like real estate, like line of credit. So I learned I was mentored by Grant Cardone.
I knew Grant when he was selling CDs out of the back of his car. So like I've invested in like
12 of his funds, like one through 12. So that gives me back cash flow. What kind of, what type
of fund? Real estate. Real estate. Yeah. And then I'm an investor in automotive state of union,
agile auto. So I've invested a lot of companies and that all comes back to me.
So what I did was I took my, my assets from real estate to everything. I was dent free and leveraged
my, the 2.8 million and then I'm paying that, I'm paying that back. So now I'm currently looking
for a second store. I haven't taken any outside money at all. I don't want to do that at this
point. Could I, you know, I've asked a lot of questions, I could, but right now I kind of
just want to grow on my own and see if my family would like to be interested in the business.
But to answer your question, the store was very, was underperforming. We've tripled parts of service.
We've tripled sales. We've made more money this year than he lost last year. And
everybody that was there was offered opportunity to stay. Everybody. Now a lot of people are no
longer there because we had to set expectations and retrain. And I was able to bring a team with
me. I brought some people with me. So right now the market for those that are willing to
work hard, have a plan, build a culture. The market is really good, especially for Chevrolet
and GMC. Like I'm really proud to be a Chevrolet and GMC dealer. We've got $24,000 tracks all the way
up to $100,000 suburbans. So I just got back from the GM meeting. Fantastic plan coming up.
They're going to simplify things. Fantastic product. So I do benefit from being involved with
what I feel like what was available to me at the time, the best franchise that was available.
And it also benefited from the fact that the dealer was not involved in the local community.
So I went through the first pitch out at the baseball. I went to the community college
with a Corvette and 3,800 kids came by and I had the opportunity to speak to them.
You've been active just locally. Grassroots. And then you met my daughter,
which is going to help capture that. Well, that's when I realized I said, okay, you
got your daughter in the business. You're working on getting your wife into the business now.
So to me, I was like, all right, you're adding some overhead here. It's family, but
it just tells me you want to scale. That's what it signals to me. That's correct. For one rooftop,
you probably wouldn't do that. Correct. That too. But you know, as we get older, I'm 53 years old.
I worked really hard. I've been a managing partner. I've worked for some great companies.
I would like for my family to have opportunity to keep this business going. So I've got to determine,
can they take it and perform? Or do I just need to sell it and then give them the proceeds?
But you know, anything can happen to us. And as we get older, y'all guys are much younger than me.
I'm the oldest guy in here and I used to not be that way. But you never know what's going to happen.
Yeah. So I'm still the oldest person in the room. None of y'all got a five in front of there.
So, you know, you've got, got to realize, but I would like for them to have an
opportunity. But so I am currently looking. So for me, I'm my own worst critic. I sit and take
a look at, man, we've came a long way and people are like, well, you've increased gross by 115%
and only expenses by 4%. How did you do it? I'm looking at all the opportunity there. There's
so much opportunity. What the FTC just recently did, leveled the playing field for someone like me.
Here, here. And I will explain. That was the best thing that could have happened to us.
A lot of dealers are saying that. So I'm surrounded by mega dealers, the Rick Hendricks,
the capital automotive group, Deacon Jones. In my area, I have to go into a small rural town
that most people don't want to go into at first with a broken store. Okay. And I'm willing to do
that because I actually liked that market. I do. I'm from a small town. I like small towns.
I like going out and throwing that first pitch at that baseball game. So dealers, that their model
has been advertised low. And then when you get there, they have $2,500 worth accessories that
cost them about 500 bucks. I'm the dealer that does it the right way. Now I did not have my
dock fee on my website. It is on there now. Same. So I'm compliant. I did not have that on there,
but you are. Everyone added it. Yeah. Right away. It's broken out. The letter came out. I
reached out. We were the first person in our area. So every one of my stores, if you hop on it,
our final price includes it. And then anything that we offer below is below that line as optional.
It's pretty incredible. They've been able to achieve what no one has been able to achieve in
this industry in decades. And so the stack that I wanted done was MSRP rebates that the consumer
qualifies for discount by dealer dock fee. And at first, when my partner put it up there,
they made my dock fee substantially bigger than everything. I said, hey, now hold on a minute.
Let's put it down at the bottom on the top of the fold. Let's not put it first. And let's sure
not make it bigger than every other number on there. Come on, guys. I want to be compliant,
but I mean, that's always make prices small on the web. Web 101. Yeah. So anyway, they got that
straight. And then below the fold is things they may qualify for. But the Simons says price,
which is our modest Simon says, which is a play. It does have that in there. But that enables me
to compete with these large dealers. Because if I had an opportunity to speak to you, most of
time I didn't because you just went with the cheaper price because their price was cheaper
than mine. Because then they had the $2,500 worth of ad backs. I did not. So they would just immediately
go there when this dealership has 300 Chevy's on the ground and I have 40. So they would never
even give me a look. Now, if I got, if I had a chance to communicate with you, I'd say,
ask for the outdoor price. Let's just compare apples to apples. Because once they drove two
hours to get there, most of the time they would go ahead and buy, right? So I am a fan of what's
happened. And that's actually even increased my new car sales even more since then. That was going
to be my next question. Have you seen like a measurable impact on sales from that? I mean,
I spoke with, I won't say what state, you know, I operate across four states, but we have big
dealer groups in one of my states specifically that are so far non-compliant that I reached out to
my state representative and I said, look, I don't want to be the guy that tattles on these other
dealers. And I don't know these dealers. So, but I have guys at my stores that we're playing nice
in the sandbox. We're doing the things the right way with our consumers. And we have dealers that
are still combining incentives that the customers don't qualify for, and they're just lumping in
and they're total savings. And their average, and the worst part is, is actually when you isolate
and see what it is, we're priced thousands below them for the rebates that the customer qualifies
for. And, you know, so I was like, man, I don't want to be that guy, but like at what point do we
have to be that guy because I'm losing market share to this guy every single month in certain
markets that I'm playing in because this dealer is not only one breaking the law, but let's talk
about the consumer side of things. We're in one of the last industries that hasn't evolved in business
that still is growing. Like how is that possible? And a lot of dealers, like they wear that as a
badge of honor. That's a scarlet letter. You know, like we pound our chest because of all the things
that people have done in the past. Like I'm completely against that. Like I want transparent
pricing. I want my customers to walk. All of us in rural markets. So if you're in a small town,
okay, it doesn't take long to ruin a reputation. So we know that we've got to do things the right
way because in small town, people hold grudges too. If you lose business, it's really hard to
get it back because, hey, my grandfather's best friend, so-and-so went there 25 years ago and
this happened. So even after you buy it, that's the worst part is like I've lost or is that bad
reputations and I'm still- You're not working in a metro area and you don't have a lot of people.
You've got to do business the right way and you can't be, you know, there's dealers that we're
talking about that people get there. Well, they're not happy. They may end up buying the car, but
they're not going back again and they're not going to tell anybody any good things about them.
And then also now they're breaking the law and there's more bad press coming about them. So
like you said, Scott, I mean, I think this is leveled the playing field and I think it's good
for those of us that want to be transparent. We don't want to play games. We just want to try
to make this simple between us and our clients. I've sold because I look at every person. I meet
every customer. I'm there. I take the picture with the customer. I meet every service customer.
My office is on the showroom with glass and I look at the front door and someone comes in,
I get up and greet them. And if you look at Facebook, I'm in every picture. They'll even
say that the owner came down there with us. We just sold a guy from other markets. This past
two weeks, we've sold people from much bigger markets that I didn't see since November.
Yeah. I'd never saw someone from this larger market, which is Wilmington or even Myrtle Beach.
Never saw him. Guess what? Another bigger market is I saw him. We sold two on Saturday
and one of the guys- The demand for relationships again, you know?
It's all this technology. I think there's still just a human connection that people
are longing for and they really want that we can provide in smaller towns.
Authenticity, right? I feel like that's what we're missing in today's age. I feel like that's
what customers and just people as a whole are driving for. Social media has done incredible
things for all industries for the world, but at the same time, I feel like people are more
disconnected because of social media than ever before. So when someone's being real and authentic,
there's something to that. So if there's authenticity to your post and how you're doing
business, it's only going to benefit us and the market as a whole. We might actually be one day
where they don't make jokes about car dealers and lawyers on every movie. The worst part is,
as business owners as a whole, we make up a majority, small business owners make up a
majority of the jobs across the United States and they make it look like in every movie,
they portray us as bad guys, business owners. I think that three of us were the type of people
were going to use that to our advantage though. I think that there's an opportunity for people
like us to make a positive impact and change that perception because I think that was one of our
barriers of entry into this industry is like, oh man, I'm settling almost. That's how I felt,
even though there was a family business and I'm settling for this. But then I realized, well,
I can actually, I can make an impact in here and I can help go to another level and I think that's
the three of us would probably agree on that. This episode is brought to you by GuidePoint Systems.
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the link in the show notes below. So we ran, we call it a temp check in circles in the cardio
and the number one concern dealers, this is about 500 rooftops represented. The number one concern
that was voted on the survey was affordability. I didn't expect that. The only reason I say that
because I feel like affordability is just that like evergreen complaint that like affordability,
like it's been a challenge for years at this point. And so when I think about that, I know you have,
you have the highest average sales price here. You're for your fortune as well. But we talked
about $50,000, my average inventory cost. So I'm thinking that the middle class,
not everyone can afford a $50,000 car. Who's buying it? I mean, the only business is like,
what are you, there is no middle, I mean, the middle class is dying. I agree, agree. And that's
the shame of it. And everything is going barbell. That's, that's my like, well, why I concentrate
on selling used cars because I, you've got a 40 million market used cars and you've got a 16 million
on new cars. And then you've got one franchise in that, you know, 16 million. So it's like,
do I want to compete in this or do I want to compete in this? I just, I see a much bigger
opportunity in the used car market for all of us. In the used car market. So when I say everything
is going barbell, you also mentioned like this craving for experiences. And I think that, I think
I agree with you where there's the messy middle is going to be eliminated. Like you're going to have,
I just subscribe to this philosophy in this world we're in, which is either you got to really own
the human aspect, the experiences aspect, right? And be that face, be at the little league, be
involved, or you have to be like, completely the other way, almost like, you know, Carvana or
something where you're just like, don't talk to me, like leave me alone. There isn't, sure there's
a middle ground, I think it's going to disappear over time because it's the technology is kind of
leveling the playing field. And you're going to get the point where either I'm going to want the
best touchless experience where I don't talk to anyone, or I'm going to want the best like
concierge. Yeah, the best concierge. Like I know, I know I have my guy, right? What's going to happen
with the middle? This is kind of like everything we're going through right now. It's the middle
is slowly disappearing. I think it's a transition. You know, I don't think it's like,
it's not all this or from far angles that is the middle that we're in right now. And I think that
we need, as the others, we need to provide a little bit of both. I mean, we, the demographics
of your baby boomers and your gen, they're such different people. I look at my mother and father
law and my kids and the gap is just with technology, the difference of people, right? And how
my kids would do business versus my parents. You know what I mean? So how are you structuring
your business right now for the kids? Well, I think, I think we need to be looking forward to
because that's what's coming. But we also need to recognize and, you know, I'm in the middle. So,
you know, I love technology, but I still like your old school. I'm a Gen X. You're Gen X.
I'm Gen X. Millennial. Yeah. We've got to figure, we've figured out. Love convenience,
even in my age. And I think even your baby boomers, like they, they've, we've all been accustomed
to Amazon. Florida's good for convenience. Yeah. Convenience for, you know, door dash.
You get everything delivered here. That's my point. I mean, I like that. And I think
everybody's willing to pay a little bit for convenience. So we've got to find ways, even
just like, you know, we talked about my buying center, like, we go to you, we're making it
convenient. We're not forcing you to come to us. Now, I think there's a level of that that needs
to happen, even more in retail, where we're doing a lot of business online and over the phones,
where we just got to take a little bit further as time goes on. I saw you added on your website,
Roger. Is this something home billed? Did you partner with the company? Like, what is, what's
saying? Basically, like it's an AI agent. It's an AI agent that is, we're reaching out to people
in our database and we're giving them values on their car. Okay. And once we engage,
Roger's engaging with our database and service drive customers to see if they're interested
in selling us their vehicle. Got it. Okay. And I'm telling you the work that Roger can do
all at once, it'd be like hiring 100 people. Okay. But Roger can't do everything. So we still need
humans. And that's, that's where I was trying to go with that. Hey, we want to be transparent.
Like we are using AI and it does make things, it gives our clients the ability to communicate at
their time when they want instantaneous. Okay. But then we've got to bridge that gap between
the AI and the humans. And we're always going to need humans. We just might not need as many humans
to scale in the future to scale forward. Are any of you doing that? Do you have,
have you integrated this type of technology? Are you building your own?
So we are currently working on a project in the background,
where we're building something. I can't say too much about that now, but just
Say a lot. Yeah. I mean, I think that's the thing. I mean, if you look at the big,
the big companies right now, I mean, everybody's getting it out with the big guys and, you know,
why pay a million dollars a year to vendor when you can go out and spend 250,000 and build something
that does it itself and you only have software costs one time, right? What are we really talking
about? I mean, not that many vendors are a million a year. Even if you do, they only grant a rooftop.
It depends. Like what are we talking about DMS or that could be millions a year, but what are you
specifically? I mean, even while advertising, look, look at, look at how I mean, I would bet
almost everyone, all of us in here probably have an agency, right? So we're cost plus if you've got
a great deal plus 20% across this, which that so I was you're talking about advertising specifically,
not like a software vendor. Well, no, I mean, with AI, I mean, I think that's a piece of
what's moving forward with how we're talking with customers and how our advertising is getting to
our people. So like we're that's something that we're working on right now is having our advertising
agency mixed with our our software to where it's ultimately as your customer data platform or
something. Yes, kind of like a CDP in a way, but it's kind of a blend of all three, right? You have
an ad agency, you have your customer database, and you have your CRM all all linked together. So
where there's less touch points. I mean, we talk about friction less than society. I mean,
so I mean, that's that's something that, you know, my goal is and maybe it'll flop, you know,
ultimately, it doesn't cost us a lot to experiment, you know. But I mean, if you think about seven
rooftops, I mean, when I get to 40 rooftops, it will be a million a year pretty much for any vendor.
No, you're starting the right time. Who's doing this for you? Do you have a CTO or
somewhere? So we we've partnered recently with a company that's getting us in front of the right
people. You know, it's just about putting this in right in front of the right individuals. I
mean, we just hired a fractional CMO for our company. And they're helping us build build this out.
What's your what's your like overarching thesis? Are you saying like, how does this reflect on
the PNL in three years? What do I see? I see less touch points. I see a lower cost of acquisition.
Lower cost of acquisition. I see a lower cost of sale for what we spend per car sold.
And I see an increase in revenue because a consumer, we've been able to do this without
having to we're growing naturally, but over the course of time. But it also puts us in a position
to where if we don't have that hard cost of the vendor anymore, that's automatic picked up across
the entire organization. And you have, you know, our goal in the next three years is to be at 26
stores. So like that's our internal goals, 26 stores, you know, it could be plus or minus. But
you know, we have more of a revenue target over just necessarily nowadays is over just a store
target. But yeah, I mean, you look at it across to everything. I mean, if you're spending less on
advertising, you're you're spending less on that means you're you're making even if your margin
stays the same and we don't grow margin. I mean, it just increases our human superpowers that
actually work for us the AI. I mean, I think that we'll be able to get 3040 50 cars a month out of
salespeople that utilize AI properly down the road. I mean, I truly do. I want to juxtapose your
stores for a second because you are hyperscaler. You're very store focused, right? Store count
focused. You have one store. I have one store, but you're doing into 1000 cars a month. And that's
I just recorded a podcast here last week. And the the the entire point of the podcast was,
hey, you have hidden enterprise value in your store, go find it, right? There's many ways to
optimize margin and produce costs and whatnot. I don't think there's one that's better or the
other. And I think at a certain point, you need to expand your store count if you want to get to
certain heights. But Kyle, what's your perspective? Like why are you store count driven specifically
right now? Oh, there's a lot. We'll have to unload that a little bit. So for me, it really
started as a vision. And then it turned into an obsession. So like now I just I have this
mindset and this vision, I can see so clearly, like, I think we talked about this on the first
podcast, you're like, you know, what what I wanted to grow to and probably the first time I said 40
stores, you know, after I just bought my first stores, everybody probably thought I was crazy.
And then, you know, here we are. But true, you know, for me, it really it's about impact.
It's about impact for the industry, change in a positive way, you know,
the change that I'll be able to have on other people's lives. I mean, I, I, you know, anybody
that's listened to my story in the past, like they know I, I didn't grow up wealthy. You know, I did
not by any means grow up wealthy. You know, we did not have air conditioning in my house. So,
you know, when I look at it, and I know that's a first world problem, I mean, most countries don't
have AC, but, you know, I look at it and I say the impact that I'll be able to have on future
generations, you know, when we talk about like we're we have almost 300 employees right now at
our seven rooftops, and we're continuously growing as our operations grow. I look at it and say,
I don't have 300 employees, I have, you know, 2.5 people live in the average household in the
United States, I mean, I have dramatically more than 300 people that I have to worry about.
So, the impacts I make on their children and the future, like that's why I look at 40 stores,
right, the impact that I'll be able to have across, you know, countless lives over the course
of the time that what I'm creating here, that's like what gets me excited, you know, to have
that type of impact. And also, I mean, of course, you know, I'd be lying if I'd say there's some ego
to it that I want to win, like I want to win, like that's, that's who I am at a core, like I wake up
every day with the mindset that there's not a possibility in my mind that we won't hit my goal.
And I mean, you know, at some point, I'll be able to share my internal goal with the world of what
I actually what my my future vision is for my company. Because like, we're going to win, we're
going to do it the right way by making the best decisions possible, hiring the best people,
world class leaders, we're going to pour into them. And when we get to 40 rooftops, the people
that have been along the way, like, it's going to be a ride of their lives. And the that we'll
be able to, you know, the impact we'll have. And Rob, you have just focused on one store for
a very long time. What was in your philosophy? Clearly, you haven't acquired additional stores.
I think it's the same. It's an impact. I mean, I know to get to 1000 cars a month, the impact and
the people that I'm going to bring with the organization to get there is going to be very
meaningful. I just bought the store in 2019. So, you know, it took me a while to get to that
point. And now I'm feeling comfortable, you know, I would consider looking out and maybe
also you would, I would absolutely. But we were just I'm doing I'm doing it organically, to be
honest. What are you, if you're not buying stores, how are you reinvesting the capital? Or like,
what are you doing? Well, we're adding people, we're expanding our buying center, we're expanding
our building. That's where and then the process right now, renovation, adding service base. So,
so you are, you are reinvesting always reinvesting. Yeah. Scott, what's your take on that? So we
right now are training them, training the people that are internal and then I'm adding to the team.
So, when I got in there, I wanted to just grab all the low hanging fruit and we've pretty much
done that. So, okay, how do we scale up from there? So, we do use podium to follow up with our,
with our guests and follow up on unsold prospects. We also, I'm going to be a, and I know Kyle doesn't
necessarily, you know, like Cox Automotive and it had some had a few issues with them,
which we talked about last night. But anyway, and I am going to go. You know, he's gonna take
into that. That's okay. I'm not asking any questions. That's okay. And also, I am going to start a
buying center. So, there was a building on the property that said empty for 10 years. Okay. So,
we redid the building and I'm going to be reaching out to Rob and also Viotto is going to help me.
I'm going to be the first dealer that we're going to, they're going to help me with technology,
open up a buying center. So, I also have a person, what does that mean? So, they're going to put the
technology and tools behind me to, to help me open up and then if it, if it works with me,
they're going to all, they're piloting like a new buying center program. Maybe they'll let
you actually communicate with people on auto trader that are trying to sell their car because
they can take us dealers off. Yeah. Which I think is the dumbest thing ever. So, people pay to put
their car on auto trader and sell it, but then Cox Automotive won't let us as deal. They figure
out you're a dealer and they, they, they block you from communicating on their platform to people
trying to sell their car. So, maybe, maybe Scott can get through them because they'll try. They'll
they'll be explained that to me. So, they're putting it for sale by owner. For sale by owner,
you're, you as a consumer, you put your car on auto trader. Interesting. And then all of a sudden,
Cox will say, oh no, we're not going to let dealers communicate with you. Well, that makes
sense. Is that confirmed? Is that for sure? It's happening to us. Because it's sales. Like,
I feel like as a consumer, I want to maximize my bids. Well, that's exactly, that's what I,
that's how I feel. Well, hopefully, they're not charging the customer for that because I feel
like that would kind of be a little bit of a breach of contract in a way, right? Hey, we're
if they're paying to buy. I don't know how they, and that's something I should probably reach,
how they actually disclose, if they disclose that to the consumer because, you know, if I'm out there
advertising my car and paying to advertise it, why would I want to push away all these potential
opportunities? And I guess that's when you go to contact them, you have to be an individual with.
Yes. With an account. I can't, if I keep communicating with a lot of people, they figure
out your deal, they just, they just block your account. Well, that's some good, that's some good
deal. We're always like, we're always like making new accounts. Maybe they'll reconsider
based on the spot. Well, that's kind of why I said it. So yeah, I'd like to get the word out there
because I think it's wrong. And we are working with a startup company on AI that would like to
make us store number one, and I've been working on it behind the scenes. So what I had to do first
or foremost is grab the low hanging fruit. And then now I'm also looking to expand, which we talked
about earlier that Rob and I talked about at dinner last night. It's just the way Kyle's going
about it is different than what we would. And I'm not saying, I mean, it's his dream. It's his
goal. It's his journey. I'm going about it differently than what he's doing. I'm going to grow.
I don't want outside investors. Like the good thing about me when I'm competing with
somebody that has partners and everything, I'm excited about it. I don't have to check with
anybody. Not that he does, but you're like, he had family. He had to, you know, that there was
family he had to buy out. I don't have to buy anybody out. Like, I don't, I don't have no
partners whatsoever. And I don't plan on having any. Not unless I want to tap that to grow. Now,
well, people give me money. Yeah, my dad always says, my only partner is God. Yeah. So, so people,
people have offered because they know how I perform. I mean, I'm performing, I have performed at
89 10% net to sales. And I've done that in the past. I'm at 6% now, 6.5%. I'm terribly
efficient in what I do. I'm not the guy that's going to go sign up for all of these tools.
As a matter of fact, with GM's program, the IMR funds, I signed up with a lot of tools at first
because I must make you, I'm sitting on $100,000 of money. I ain't even spent yet in advertising,
but I don't want to just go spend it to spend it or lose it or it will expire. It will expire. So,
I put in 1%, they put in 1%. I'm sitting on 100K that I hadn't even deployed yet,
that I'm starting to deploy. So I hadn't even ran my full game plan yet. I've just picked up the
low hanging fruit, but I'm that type of person. And maybe it's how I was raised. I was raised in
the poorest county in the United States of America. My dad was one of nine. My mom was one
of nine. I was raised a little bit differently. Maybe you referenced, I said, maybe a little bit
more of a scarcity mindset. But when I went into the store, I was debt free. Well, that's unique.
I could have paid. You paid just so we're all on the same page. I own three Chevy GMC stores.
You paid for those funds. I don't play very well with those because I have a different view on
that because the problem is, is you participate to get that money from the manufacturer. And then
they tell you how you have to choose it. It's like all over a gruel, like, may I have another,
like, you know, you're begging, you're begging to, and then they, you participate. So it's not like
they're giving you free money. Like, hey, if you give me free money, I'll spend it how you tell me
to. Yeah. So you don't, you don't participate in GMR, GMR more funds. Oh, we do two. Do you do
half percent of percent? We do half percent. Half percent. So see, we do it because if you don't,
you're going to miss out and everybody else is playing in it. And that's the whole thing. But
at the end of the day, it's by no means, I just look at it and I say, it's not like it's some,
they're doing it out of the graces of their heart. Like, let's be honest, the vendors that they want
you to use, magically, if you go through their program, it's more expensive. That's true. So
like, because I work with these vendors outside of the program at my other stores, and I'm, well,
like, oh, well, because it's approved, we're an approved vendor, it's 40% more. Like, if there's
one of the economics, if it's not a kickback, like, so I really, if you look at it, I'm paying more
to use the vendor, and I've already spent the money to be charged by the manufacturer. So I'm
paying for almost 75 cents on the dollar. I've done the math with my reps. So it's, you know,
and I agree, like, there are benefits. And, you know, because all the other dealers are doing it
in your market, like, I understand, like, it's a cohesiveness of, hey, everybody's saying the same
message. But at the same time, like, I do have some, some issues with the way that they spin it,
it's like, you know, they want you to be grateful for this money, but you're paying for the money.
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slash car dash dealership dash guy or click the link in the show notes below. So when I went in
this first store I ever bought and I bought it on my own, I had some baddie consultant me, but I
kept the foreplay on the same. I kept the operating system the same. I kept the banking account the
same. I kept everything the same because I wanted cohesiveness. Now I'm going back and making changes.
Did you do a stock purchase? No, no, no, no, no. I bought it straight out. I just I kept like
GMF foreplay and they've been they've been easy to work with with me. Of course, I was approved.
They approved you. They approved me, correct. That's what the previous dealer had was GMF. So
they had Automate. I stayed with Automate at first, you know, now I'm looking to make a change,
but I had to get my bearings on it. You're looking though. Yeah, I'm looking at, you know, dealer.com
and looking at some other sources. You've got to make a culture change. So we have to make all
those changes. Yeah, well, and that's and I just wanted to keep it simple, but to go back to what
Kyle was talking about, the previous dealer put in 1%. Well, guess what? Now that I figured out,
I can operate without the I cut back to a half, you know, so I'm making adjustments. But when you
buy a franchise, you don't know. I mean, each one of them run differently. You got to figure out
how to how they go about selling that car. So before we wrap up, I'm curious, you mentioned
your goal of going from 6 to 9% that the sales, which is obviously astronomical performance.
That's kind of what I was referring to by, you know, optimizing enterprise value in your current
store. But when you guys think about the current state of the market, right, new car sales kind
of being flat ish, of course, you can still outperform in pockets, which is great. What
themes are you leaning into? Are you betting on for the coming years, right? Where is your
time allocation being disproportionately spent? Rob, you're obviously like all in unused,
right? You're, I mean, I think, you know, your service department, that's really where we make
our money. When you have a, you know, that's where the margins at because the margin is not in the
sale of the car. What are you doing there now? Right? Because you're you already have fixed.
Are you is are you doing anything to where a capacity? We got to add base. I mean, we want to
add another additional 30 base to our store. So that that would be astronomical growth for us.
So you are adding base? Yes. Okay, so you're expanding capacity.
To me, it's more about adding service space than it is about just a, you know, a renovation aspect
of it. But talk about it, I don't think that that's as important. Well, capacity and renovation is
too complete. Correct. Like a facelift. Then I'm going to do it. I'm going to do it all. I'm going to
do it all. Yeah. Yeah. And like, what about, again, thinking through capacities, obviously,
investment, implementing, you know, I see dealers testing out video MPIs with like Ray-Ban classes.
And, you know, there's a, I think, Finley Auto Group, which has the robots running parts. Again,
these are all add up at the end of the day. Are you guys testing any of that kind of stuff and fixed?
No, no, that's not, that's not where I see the lowest hanging fruit. But a lot
of where do you see the lowest hanging fruit? The lowest hanging fruit. I mean, if we're talking
fixed specifically, it just has to come down to capacity, ROs, how many we're touching. I mean,
we just rolled out, you know, labor rates. Yeah. Oh yeah. How many hours sold? Yeah. How many hours
sold? I mean, we just rolled out 59.99 and full synthetic oil changes across our group. And I
mean, we seen in the first 30 days. Say that one more time. 59.99. Yeah. Full synthetic and
okay. What was the thesis there? Was it like loss leader or would? Yeah, loss leader. I mean,
you know, it was at a unique time right when I ran hit. So I mean, we're definitely feeling a little
bit more of the bite. You know, I will say most of our oil vendors have kept prices the same.
You know, there's talks of price increases, but our specific vendors that we are, we haven't seen
them yet. So hopefully, you know, if they wrap it up soon, we might not be in a hurt position.
Yeah, right. But you know, for us, it was just more of like wanting to give a value for our
customers. You know, a lot of our stores, you know, we have three stores and major markets,
and then we have three stores in mid markets and small markets, right? Or four stores in
small markets. You know, but the other side of things is just, we got to start taking back
our customers from the independence. Like that's what it comes back to. There's this perception
that going to a car dealership is expensive. You're talking about service, like noob shops.
Yeah. The fact of the matter is, is if you've shopped your local loob shop,
they're more expensive. They get their OEM parts from us. So how do you think consumers believe
because they're going to a $10 million facility that their oil change is going to be less going
to an independent? In most situations, like one, we have world-class techs that have went through
all the certifications that you can imagine. We spent tens of thousands a year in keeping
their certifications up. You have the best equipment, and in most situations, we're less
expensive, but you know, there's this perception that what's more expensive. It's a branding
issue. Right, right. So that's what that's what. What would you think as a consumer? I would think
that dealers more expensive. Yeah. You have a big fancy facility. That's right. What should I believe?
That's where even Ford has quick lane. So it's just trying to compete with your Jiffy Loobs,
etc. Yeah. So that's what we went to is that $59.99 oil change. We rolled that out. We've seen
almost a 20% increase in customer pay ROs in 30 days. You're saying blended?
Since starting that? Since starting that and rolling that out across our company.
Explain that. How does that impact your blended rate? Because are you implying that
that has impacted other ROs? Are you implying that those people coming in for those oil
changes are getting additional work done? Well, of course. We do a full MPI on every one of our
vehicles. It's a requirement. We're 100%. You know, so like our thing is, is like, if
there's a good chance that they don't know that their brakes are at two millimeter,
you know, the same thing that they would get at the independence. The only difference is, is like,
we're getting those looks now. So there's no difference. I mean, we actually haven't went
backwards in our hours per RO or our, you know, cost per sale, like as as total for for the
any of our customers. The difference is, is we're just getting more looks. So like our profit,
our gross profit across all of our stores, seen a substantial increase in our fixed department
in the first 30 days. Of course, when I first told my parts and service director that I was
doing this, because it wasn't like, Hey, should we do this? I was like, Hey, congratulations.
By the way, we're doing this. We're rolling this out. This starts this day. I already have
advertising for all the stores. And he was like, Oh, Kyle, we're going to go backwards. Our effective
labor rates going to go, you know, backwards, our effective labor rate has increased by $5
across the board. And, you know, so it just comes down to like the perception is reality,
right? Like his perception was we're going to go backwards, but it's not and but it went up,
but it went up and a 20% increase to customer pay ROs. I mean, when an industry as a whole,
we're seeing a decline across industry in the, the drives that most stores were seeing
a 10% reduction national. So like I have a 30% swing in 30 days of what having a loss leader
in your store with no loss only growth. So I would say, you know, Hey, anybody out there,
I mean, we have to start taking back because I promise you, I see more
valvelines and these stores popping up across every major market. So serving someone.
Yeah. Yeah. Do you guys want to end in a fun way? Let's do a lightning round.
So these are just six questions, one word answers. All right, let's do it. Scott,
most overrated trend in auto retail. Yeah, that's tough. I mean, gotta give me one word.
I have to piggyback off of the AI, Rob. Yeah, AI would be overrated. Fair enough.
There's definitely aspects that are most underrated opportunity. I would say
for me, it would be a mobile, mobile service for me. Fixed. I'd say F and I.
Okay. We'll dig into that 11 metric you check every day.
Cash. Operating balance. That's for sure. At a small first time. Oh, yeah. Oh, yeah.
Inventory. I love it. One thing you'd stop spending money on tomorrow. Indeed.
Oh, now hold on. Let me. That was a good one. There was a bet over there. Yeah. Let me ask
one thing before we are. Are you saying we wish we could? That's gonna go. Oh, yeah.
Because if it's a wish, it would be vendors. You know, like if we. Broad brush you're saying.
I mean, broad brush. I mean, yeah, I mean, I would say that most stores right now have
are extremely over bloated with vendors and what. So inefficient vendors. Let's give some
love to the good ones. Yeah. I'll give some. All right, fair enough. Health insurance.
Health insurance. Yeah. Oh, it's a good one. Look into crowd health. Look into that.
And two more. One thing you double down on immediately. People. Social media. Use cars.
And last but not least, biggest risk to dealers over the next 24 months. One word.
Credit operators. Turn over. I love it. You guys are so on brand. Scott Simons, Kyle Coleman,
Rob Ruth, gentlemen. Thanks so much for doing this was amazing.
About this episode
Dealers talk strategy for scaling used-car stores and service departments while beating big groups. They share how lead volume can drop but quality improves, and how the M&A market is “getting back to reality.” Growth hinges on acquisition playbooks—sourcing “off the street,” building an acquisition team, and using AI for outreach while keeping humans involved. On the service side, they argue experience and trust win, and pickup/delivery plus a $59.99 oil-change promo can lift customer-pay repair orders quickly.
Welcome to Dealer War Room from Car Dealership Guy, where we sit down with top operators to break down how they're navigating the biggest challenges in auto retail.
These three rural store owners share the specific moves working right now: Scott Simons bought a Chevy store for $6.9M and tripled sales & fixed ops in under a year.
Rob Ruth built a street-sourcing machine buying 300 cars/month from consumers at a 7% cost advantage over auction.
Kyle Coleman launched a $59.99 oil change, driving a 20% jump in customer-paid service visits in 30 days while the industry shrank.
Three models, three playbooks, built for today’s market.
Topics:
14:20 Nissan Is The Fastest Growing Brand.
25:10 Simple Stair Steps Win Every Time.
31:45 A '50s Building Selling 400 Cars.
42:30 Pickup & Delivery Solves Service.
55:20 The FTC Crackdown Is A Gift.
This episode is brought to you by:
1. CDG Dealer Platform – Benchmark your performance against thousands of rooftops. Give your dealership a competitive edge at https://cdgapp.ai/.
2. Guidepoint Systems – Guidepoint Systems is becoming a dealer's most important retention tool. Visit @ here for more info.
3. TARGIT – TARGIT is an end-to-end business intelligence platform that gives car dealers worldwide complete visibility and control over all their operational data. Learn more about TARGIT @ here.
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