Ouch! Seven Things I Learned

It's not that I've become smart, it's just that with age comes experience. I've learned a few things from bumping my head.

From the things I've learned, here are the top seven that most dealers are hoping the next group of geniuses to run General Motors, Ford and Chrysler know about franchises and dealers.

If you detect a bit of cynicism, please note I have unbounded respect for that lucky group of decision makers who invest other people's money for their own gain. Throughout my career, I've only been able to invest my own skin in the game, leveraging nothing but my posterior and those of my teammates. Here's my seven.

First things first: It matters whether I make enough profit on a new-vehicle sale without relying on finance income, stealing the trade-in or credit schemes. If the bare metal isn't attractive enough to command a profit high enough to pay its share of the rent, either the salesperson or the product stinks.

Second: The main ingredient in an effective ad has to be something accurate about the product. If the best story we can tell about a car is that the people in it are beautiful, playful or sexy, the car in the background isn't. Reread the first thing.

Third: According to all the fine and not-so-fine print, everyone has to be paid currently, except of course, the dealer. Regardless of the snickers I get from sneaky dealers who regularly tap the register, when push comes to shove, (and sometimes it does), if there's a shortage, the dealer is shorted most.

Lenders have their liens; the manufacturer has its holdback; employees (by law!) get wages and overtime; the tax men cometh regularly; and even non-working spouses have rights by law. But, no one demands that the dealer be paid. So, a winning equation better include profits and a way to hold on to them for the dealer body. Refer back to the first thing.

Fourth: Factory relations are all about current events. Fifty years of service may yield a plaque and a handshake but you are what you are selling and buying this month. Every day starts a new game and there are no carryover credits.

Fifth: Every sales team has a best player, plus someone else who thinks he or she is the best. Then there's everyone else. Usually, the greatest talent is over-compensated and everyone else believes they're under-compensated. This is the bell curve of life.

There is no way around it despite countless hours spent creating the illusion of fair play through spiffs, contests and motivational meetings. But talent and motivation come from within. No one has ever become talented by reading about greatness or sitting in a meeting. When you spot successful sales efforts, reward and support.

Sixth: Numbers don't lie, but it is very hard to figure out which numbers matter. Most bookkeeping offices remind me of jokes about the number of people it takes to screw in a light bulb (always too many). A tour of the typical dealership back office quickly reveals there is twice as much effort invested in paying and reporting than in collecting money due and finding revenue.

Clerking deals, warranty and title work all take a bite out of every dollar received. Yet rarely is anyone in bookkeeping fighting the good fight of finding opportunity. Dealership bookkeeping and information systems give the illusion of necessary control. But divide the cost of all the computer systems and bookkeeping going on in the dealership by the number of vehicles sold. No one spending their own money would design a reporting system so costly and time consuming.

Seventh: After all is said and done, dealers are the glue that binds the retail automotive industry in America. Not event the most popular brands can command volume and price without a trained and motivated retail effort.

Dealers are the Marines who arrive first and leave last, working against all odds to pull products through a complex and treacherous marketplace, regardless of how much it costs and what the odds.

When things are great, no one wants dealers. When things are bad, no one supports them. Yet, without dealers there is no volume. Though disheartened and disgruntled, when this industry sorts itself out, regardless of which brands triumph, dealers will be at the side of franchises that survive.

Peter Brandow is a veteran auto dealer.