THE AUTO INDUSTRY
“Belief that you must be the agent of change”
I began this journey about 14 months ago…..
Or more to the point, a shift in the journey occurred then…..
That shift was a switch…..
A simple on/off switch…..
But I wasn’t ready to flip it on yet…..
First, I had to learn why I wanted to flip it on…..
Then, I had to learn the steps to take once I did flip it on…..
Sit back and grab the popcorn…..
This may take a little time to explain…..
In 1991, a good friend of mine asked me if I would go along with her and help her buy a used car…..
I agreed because I thought I could provide a disinterested third party opinion to the buying process she would encounter…..
And I wasn’t working, she said she’d buy lunch…..
We did a little shopping at some local car dealers and found “the one”…..
A nice, clean low mileage Jetta that was a little above her price range, but she had a trade…..
Maybe we could make it work…..
In those days, the traditional car buying process was a back and forth between the buyer (us) and the car dealership (them) that could take hours…..
You make an offer…..
The salesperson leaves to talk to the manager…..
The salesperson comes back, not at your number, but a little less than they were…..
You maybe come up a little…..
They leave again…..
They come back again…..
But you just can’t get together…..
We tapped out after the manager trial closed us himself…..
He was convincing, but we just couldn’t move any further on our offer and decided to keep looking…..
As we were getting in her car to leave, the salesperson comes flying out yelling….
OK, OK, YOU WIN, IT’S YOUR CAR !
Back to the desk to write everything up…..
The manager came over to thank us for the purchase…..
“You are a hell of a negotiator Barry”
“How would you like a job here!”
Thus began my journey in the Auto Industry…..
Fast forward to 2008…..
By then I was on my own buying and selling 1500-1600 cars/year as a wholesale only car dealer…..
Rechtschaffen Motors had become a well oiled machine…..
I built a wholesale “field of dreams” in the middle of beautiful downtown Menands, New York…..
I had 15-20 franchised New Car dealers calling me for bankable numbers to use as ACV’s (actual cash values) on their trades…..
All those trades were rounded up and processed at my lot…..
I developed a group of dealers that showed up on a regular basis and bought from me…..
The cars and trucks that didn’t get sold became that week’s Auction Show…..
At the auction, I became a super seller…..
I was in the top 5 sellers for volume and selling percentage…..
You can look it up……
Enough life insurance where I was worth more dead than alive…..
And cash in the checkbook…..
I had everything figured out…..
And I was happy…..
If I had found a magic lantern on a beach with a genie inside, I would have thrown it back……
I didn’t need it…..
As you all remember (I don’t know how you could forget)…..
2008 was an election year…..
A volatile election…..
On one side was a candidate promising change……
On the other side was a candidate that assured us throughout the summer that we were on the right track……
That the “fundamentals of the economy were strong”…..
I was a little skeptical of that……
You will remember in the spring of that year gas prices shot up from the $1.80/gallon range to the mid $4.00/gallon range……
In a matter of weeks……
That one thing sent a shock through consumers, especially ones driving ANYTHING with a V-8 in it…..
It created a panic in the wholesale world of cars…..
I don’t mean trucks and SUV’s and large cars slowed down…..
THEY STOPPED !
Nobody wanted them……
And I owned plenty of them…….
With more coming……
Every store that called me looking for a number on a car had a customer driving a gas guzzling something……
At first I tried to adjust……
Give em crazy low numbers…..
But they were making deals anyway…..
People just wanted OUT !
For the next 3 or 4 months, I got crushed……
All my cash reserves disappeared…..
Slowly, I got a handle on things…..
I was badly wounded, but I had stopped the bleeding……
By August, I was “just saying no” to a lot of makes and models…..
Wholesalers began to feed the fire of small, good gas mileage cars…..
It was impossible to not make money on them……
What ever you had to pay, they were worth more the next week…..
The roller coaster ride continued….
Lehman Bros. was dust…..
Wall Street crumbled…..
Nobody saw it coming…..
Nobody had the answer…..
I was always aware of the fact that the way I was doing business was like a skier down slope from an avalanche…..
I had to keep moving or the snowball behind me would kill me….
By February 2012, I was nothing but a scourge to society…..
The wife was gone…..
The kids went with her…..
The cats were gone …..
The dog was gone…..
The car lot was cashed in and gone…..
The life insurance was cashed in and gone…..
The 401k was gone…..
My house was in foreclosure…..
As bad as that all sounds, it didn’t stop getting worse until I got this little piece of advise…..
“If you’re in a whole, stop digging!”
“Believe that you are an agent of change in your own life”
” The less justified a man is in claiming excellence for his own self, the more ready is he to claim all excellence for his nation, his religion, his race, or his holy cause ” Eric Hoffer
So how do I become that agent of change?
How do I claim all excellence for my cause?
The path started with focusing on one thing at a time…..
It was now that I started going back to auctions…..
I noticed that when I was there, I could completely focus on learning what cars were worth…..
All the other problems and distractions in my life melted away…..
If I found a magic lantern on a beach with a genie inside, NOW what would I wish for to make me happy……
It was this…..
Take that one passion and grow the right way…..
It’s just a game…..
I found out by almost being removed from the game….
Now I simply stop and pay attention…..
I set up 90 day short term tactics that I learned studying successful companies…..
If luck was involved, I would realize that life’s opportunities come through our networks, our connections, people we stumble across, or people we get in front of…..
The more people and perspectives in your sphere of reference, the more likely good insights and opportunities will combine…..
You can get a return on luck…..
By maximizing your positive luck and minimizing your negative luck…..
I no longer underestimate the power of optimism…..
Our performance rises to the level of our expectations…..
Optimists will sometimes mistake a steaming turd for pure gold, but will not miss a piece of gold when it crosses their path…..
I now understand humility…..
It’s knowing what you don’t know…..
Knowing you always need to learn more….
“Capital flows to the greatest contribution”
After I was able to reach my 90 day objectives…..
RECHTSCHAFFEN MOTORS was back !
We now focus on building our ladder from daily activities to long term vision…..
Our daily activities searching for cars with profit left in them…..
– Franchised new car dealers that sell directly to wholesalers
-Franchised new car dealer sealed bids
-Online apps such as ACV auctions
-Manheim auctions that differ from the one we attend to sell our cars…..
All these activities lead us to our weekly planning and scheduling…..
We plan our:
– 30 day goals
– 90 day targets
– 1 year objectives
– Our long range vision
Keeping in mind the 4 universal laws of scale and growth…..
1.) In order to get the support necessary to grow and scale, you must admit you need it.
2.) Any growth and scale requires daily behavioral change.
4.) Growth and scale without a clear destination is doomed to fail.
WAKE UP EVERY MORNING AND KNOW WHAT EVERY CAR IS WORTH!
How will all this help you?
I’m not here to sound like an expert…..
I’m here to answer that one question…..
Of course to wake up every morning and KNOW what every car is worth is impossible……
But waking up every morning and PURSUING that knowledge is…..
It becomes a learned skill…..
Anyone in the Auto Industry that needs that knowledge to be successful develops that skill…..
It is this one skill that OUR company is built on…..
It is this one skill that gives us a slight advantage…..
And that’s all we need, we only need to be a little bit out front…..
There is a shrinking majority of wholesale dealers who still live completely off line…..
Any suggestion to them that they must embrace changes in their business upsets their status quo…..
Any show of vulnerability is seen as weakness…..
When in fact, it is a sign of power…..
Say what you think.
When you suck at something, admit it.
When you make a mistake, don’t let it cost you money.
It’s no wonder that wholesale car dealers feel as though there is a conspiracy to eliminate us…..
To try and bypass us…..
But it’s the big lie!
We are told that education and technology will end our existence…..
When in fact, education and technology will only make us more relevant…..
How do I know this ?
Because each individual used car, truck, SUV, or van is unique…..
Ones with the most similarities- year,make,model,mileage,options, and condition are the easiest to figure out…..
But ANY retail car dealer will tell you it’s the ” odd duck” that’s confusing…..
Usually the most costly……
Am I here to criticize your actions ?
Our contribution is to celebrate the challenges ahead…..
We are here to inform you of the facts that exist TODAY……
We know these facts because we are there when they happen…..
We are the ones writing the auction market reports with our weekly sales……
We are the ones that notice not only what IS selling, but what is NOT…..
We are the ones that measure everything…..
So we know what new information is accurate…..
So we know what new online platform will make us more efficient…..
So we know when to abandon things that don’t work……
Success is a long painful string of failed shots and course corrections…..
Now it’s time to “flip the switch”…..
Now it’s time to tell you what we’ve been building…..
Wholesalers are the biggest risk takers in the industry……
If we make a mistake, we can’t “retail out of it”…..
We buy cars and judge what the Market will pay us…..
We’re different because we’re :
I said earlier that I am not an expert….
But even experts often admit they don’t know an answer……
They point out this weakness and find a way to learn more…..
WE will deliver more because our only goal is to learn the right way…..
We’re here to build strong relationships to connect and reach out to others who can help…..
So if you would rather argue against advice instead of taking it, THEN LEAVE!
There’s a feedback loop- try something> get feedback and results> learn from feedback and results> try something new.
If what you are doing is not working, but you are dead set on arguing why you are right…..
You’re breaking the loop and not accepting feedback…..
You will NOT change…..
You will not be successful…..
We are not here as a distraction…..
But to attention and information that helps YOU know what cars are worth so YOU can profit !
You must take responsibility for what happens to you…..
If you don’t you fail…..
AVOID the “excuse for everything” disorder……
You have to believe it’s possible, then you will get off your ass and try.
When you try, and learn from your failures, you can lead yourself to success…..
We truly care about the pursuit of waking up every morning and knowing what every car is worth…..
It’s a passion……
We’re not afraid to invest ourselves in this project……
We will not give up…..
We will not be crippled by indifference…..
You will have fear, fear will always linger and remain an invisible barrier…..
You will push through, and there’s always another layer of it…..
It’s painful and gut wrenching, but it can be overcome…..
We will defend against challenges, friction points, and complaints…..
We will advocate for what makes us different…..
We will educate the “newbies”…..
We will have tips for the hardcore…..
We will communicate with the new car guys…..
We will lower pain and costs…..
We will make things easier and faster…..
Let me know in the comments how you can contribute.
And I hope the popcorn was good…..
Out for now…..
Barry J. Neuman
Member of Manheim’s “super seller” club