“Lot Trolls”

Continued from article: Argument for you to Focus on Wholesale

The GM paged Mike to his office – an imposing raised structure in the back of the showroom. As he approached the office, Mike had a sick feeling in the pit of his stomach. Like most salespeople he had a built-in fear that he could be fired at any moment. That fear hit overdrive when he turned the corner and noticed that the CFO and Dealer Principal were also in the office solemnly waiting for him. He racked his brain trying to recall every customer he’d sold over the past few weeks to determine which one could have led to his demise but couldn’t think of any issue that could lead to his firing. He pushed through the door of the office with trepidation.
To his surprise they all broke into a broad smile when he walked into the office. The owner reached over and offered his hand, saying “Congratulations. We’d like to promote you to used car manager.”
Mike let out a breath that he did not realize he was holding then took the remaining outstretched hands and shook them vigorously. A whirlwind of thoughts rolled through his head. He needed to call his girlfriend and tell her the great news but first he called his mother and said, “Mom, I just got promoted.”
Later that day, the veteran general manager invited Mike back into his office, showed him his pay plan then immediately switched gears and began to train the basics of what he expected Mike to do as used car manager. He trained some of the same techniques handed down to him when he became used car manager 20 years earlier. They spoke extensively on how to appraise cars, what tools to use, what the floor-plan budget was, what cars to stock, etc. Before long the conversation turned to the disposal of unwanted trades.
Like so many dealerships around the country, this dealership had decided to kick wholesalers out due to a bribery problem, a commonly talked about issue in the 1990s.
“We don’t want wholesalers in the dealership at all. Do you understand?” the GM said sternly. “We don’t want them appraising our cars.”
Mike agreed but in the back of his mind was a little confused by the message. With reservations he asked, “Then who do we sell the cars to?”
“Oh, we still sell them to wholesale buyers, we just don’t allow them in the dealership.”
“So where do we sell them?” Mike asked naively.
“Good question. We take them to the auction.” the GM said
“And sell them to the same wholesalers we could have sold them too right here? Doesn’t that take longer?” Mike asked.
The General Manager sagely looked at Mike, “These wholesalers are the worst of the worst, they try to bribe managers, their checks are bad and quite frankly, are bottom feeders. We don’t want them hanging out at our dealership. So, we let the auction deal with them instead.”
Mike was even more confused and a little annoyed, after all the owner of the dealership was a wholesaler before he bought the Ford franchise, and most of the independent used car dealers that Mike knew were hard working business people who make a living buying and selling cars, not passing bad checks.
For the time being though, Mike kept his mouth shut as the manager continued… “Those ‘Indy’s are constantly trying to poach our inventory.” He said, “we don’t want that.”
Poach? Mike thought, are they not buyers that, if embraced, could be a monumental profit center? But it was his first day on the job, so he shut up and agreed.

Next Up: Kicking Out Our Most Prolific Buyers or Get the Book

Kevin B. Leigh is the co-Founder of Auction Simplified and the wholesale book “Wholesale Simplified” and can be reached by email at me@kevinleigh.com