The 2011 Independent Retailers
John Iannone and Todd Hoagey of Auction Direct USA named 2011 Independent Retailers of the Year
Auto Dealer Monthly has featured the Top 50 Independent Retailers of the Year since 2006, and this year’s Top 50 features dealers from all over the U.S.—from the Pacific Northwest to Southern Florida. Auto Dealer Monthly and this year’s corporate sponsor of the awards, the 2011 Special Finance Conference, are honored to recognize the efforts of the Top 50 Independent Retailers of 2011.
The Independent Retailer Awards are designed to recognize the efforts of the dealer principals. Since many independent dealers operate multiple locations, some of which are under different names, this allows the individuals running the operations to be recognized for their efforts in used vehicle retailing.
Any independent dealership that is not, or has not been, publicly held is eligible to participate. Applications to enter the awards were published in the April and May 2011 issues of Auto Dealer Monthly and included in e-newsletters and social media posts. The Top 50 Independent Retailers were ranked based on pre-owned retail sales for the calendar year 2010, including conventional, retail cash and credit, subprime, and buy here pay here sales.
When reading about this year’s winners, don’t be surprised if you feel as if you’re experiencing déjà vu, as the top four independent retailers from last year maintained the same places this year and several winners from past years returned to the list.
Atop the List
For two years running now, Dealer Principals John Iannone and Todd Hoagey, who operate Auction Direct USA in Victor, N.Y., have won the Independent Retailer of the Year Award. To reclaim the top spot this year, their stores retailed 6,658 units in 2010, which is a year-over-year increase of almost 500 units.
Todd Hoagey, COO, Auction Direct USA, Victor, NY
John Iannone, CEO, Auction Direct USA, Victor, NY
Auction Direct USA consists of five stores on the eastern seaboard (two in Victor, N.Y., one in Buffalo, N.Y., one in Raleigh, N.C., and one in Jacksonville, Fla.). However, the Buffalo store opened in May 2011, so their 2010 sales total was comprised of sales from four locations.
Iannone and Hoagey formed the independent dealership in 2005 with the goal of revolutionizing the used car business and breaking out of the used-car-dealership stereotype. They’ve created a fun, friendly, open environment at their stores (and on their website) and a customer-driven sales process. Apparently, their customers have responded well because Auction Direct USA has managed to grow throughout the recessionary period that lasted through the first half of 2010.
Iannone said, “We’re extremely honored to receive this award for the second consecutive year.” He also recognized the dealer group’s hard-working staff. “Auction Direct USA is very fortunate to have such dedicated team members who support this effort every single day.” Congratulations to Iannone and Hoagey for their continued success in the Independent Retailer Awards.
Rounding Out the Top 5
Also upholding last year’s placement is David Andrews in second place. Andrews is the dealer principal of City Auto Sales in Memphis, Tenn., which is celebrating its twenty-fifth anniversary in 2011. His two-location operation retailed 6,430 pre-owned units in 2010, a mere 228 shy of claiming the top spot this year. He has placed third or better in the Independent Retailer Awards since their inception in 2006, and he was the Independent Retailer of the Year in 2007, 2008 and 2009.
Andrews’ 2010 sales total is the highest figure ever reported for City Auto Sales in the Independent Retailer Awards, and while his sales numbers have increased each year, he’s consolidated his operations from six stores in 2007 down to two.
The owners of U.S. Auto Sales in Lawrenceville, Ga., Marvin Hewatt and Larry Fleeman, have also been a mainstay in the Independent Retailer Awards. This year, they reclaimed third place with 4,787 units retailed in 2010, which is slightly higher than the group’s 2009 total of 4,755. Hewatt and Fleeman’s 10-store operation, which was founded in 1992, placed second in the 2009 awards, fourth in the 2008 awards and sixth in the 2006 awards.
Donald Birger’s four-store BHPH operation, InstaCredit Automart in Collinsville, Ill., placed fourth this year with 4,276 units retailed. He’s closing in on the third-place spot, posting an average year-over-year increase of 592 units since the 2009 awards, which he placed sixth in. He recently opened the fourth location, so he just may capture third place next year.
The sole newcomer to this year’s Top Five is Lee Credit Express of Auburn, Maine, which also happens to be the oldest operation recognized in this year’s Independent Retailer Awards. The 13-store BHPH operation is led by three dealer principals, John Isaacson, Adam Lee and Don Lee. Their operation retailed a total of 3,905 used vehicles in 2010. The dealership group is celebrating its 75th year in business this year, and is still growing. Last year, the operation consisted of nine locations, reported 1,997 retail sales and placed ninth in the awards.
The Top 50
In total, the Top 50 Independents retailed 89,395 units in 2010, which is a sizeable increase of 12,000 units from the prior year’s total sales of 77,395. The average number of units retailed by a Top 50 Independent in 2010 is 1,787, while the range in sales from first place to fiftieth place was 6,658 to 656.
Accordingly, this year’s Top 50 own more dealerships than in the past. The Top 50 operate a total of 124 locations collectively, which is the highest number reported since the 2007 awards. The average number of units retailed per location is 721, which is also in increase compared to last year’s average of 661. This year, the average number of locations per dealer is 2.48, while the actual range is from one to 13 locations per dealer.
The majority (60 percent) of the Top 50 dealers operate one location. In eighth place is Steve Hall, who is the owner of driversselect in Dallas, Texas, and this year’s highest-ranking single-location dealer. His dealership retailed a total of 2,451 vehicles. Close on Hall’s heels in ninth place with 2,445 sales out of one location is Steve Bentley of Automotive Avenues in Lakewood, Colo. The remaining 40 percent of the Top 50 Independent Retailers operate multiple locations. Sixteen percent have five or more, while the remaining 24 percent operate between two and four locations.
Several of the Top 50 have been in the business for more than two decades, with the average time in business slightly less than 22 years. Seventeen of the Top 50 have kept their doors open for 25 or more years, and four have been in business for at least a half-century.
However, success in independent retailing doesn’t always require longevity. A total of 13 of the Top 50 have been in business for 10 years or less. Nathan Buche – a newcomer to the awards this year – owns the most-recently opened operation on the Top 50 list, Auto Express, a one-store operation founded in 2008 in Lafayette, Ind. He placed forty-ninth with 684 sales.
The majority of the 2011 Top 50 also made the list last year, with 84 percent of dealers returning from the 2010 awards. Of those returning, the vast majority (about 81 percent) saw an increase in sales. The dealers who improved saw a year-over-year increase of anywhere from a 15 to 1,908 retail sales. Fifth-place winners John Isaacson, Adam Lee and Don Lee of Lee Credit Express experienced the noteworthy 1,908-unit increase.
Moving up in placement was tough to do this year, however. Of the 34 dealers who both reclaimed a spot in the Top 50 and increased sales, only eight improved their placement. The biggest mover from last year’s list was Mohamad El Zein, Hussein Zein and Salim El Zein, who operate El Zein Auto (a three-store operation in Edmunds, Wash.). They placed twelfth in this year’s Top 50, an improvement of 13 places over their twenty-fifth-place finish last year. They achieved the improved ranking with 2,092 sales in 2010, a year-over-year increase of 851 units.
Other Facts & Figures
Each year, analyzing the information submitted by the top independent retailers offers some interesting data. Dealers answer several key questions about their operations, and once analyzed, those answers provide clues as to what above-average independent operations consist of. Of the Top 50, 80 percent have a service department on site, 88 percent have a defined finance department, and 40 percent have a separate finance department dedicated to special finance.
Additionally, 82 percent of the Top 50 offer their customers indirect financing options, and on average, 70 percent of those dealers’ business is through non-related financing sources. Forty percent of the Top 50 Independent Retailers have related finance companies (RFC), and an average of 54 percent of their business is through their RFCs.
The use of GPS and/or starter-interrupt devices increased slightly this year, with 32 percent of the Top 50 reporting they use them, compared to 28 percent last year. While dealers named 11 different companies as their GPS/starter-interrupt providers, Goldstar was the sole provider that stood out, with a 25-percent share of the dealers who use the devices.
As in past years, the Top 50 named several different DMS providers. This year, dealers reported using 27 different systems, with only three capturing a double-digit percentage of the Top 50’s business. ADP is used by 14 percent of the Top 50, DealerTrack DMS is used by 12 percent, and AutoStar is used by 10 percent.
Comparing the 2011 awards to previous years, online classified/auction usage is down. This year, 64 percent of dealers reported marketing vehicles on third-party classified listing and auction sites. Last year, 80 percent reported using them, and in the 2009 awards, 70 percent used them. While fewer of the Top 50 use online classified/auction sites to market inventory, the ones that are using these sites listed a total of 20 different sites they post to, with the most popular being AutoTrader.com, Cars.com, eBay and craigslist, respectively.
As for purchasing inventory online, 68 percent of the Top 50 Independent Retailers purchase vehicles from online auction sites. While some of those dealers purchase from as many as three or four different online auctions, all 68 percent purchase from Manheim’s online auctions.
From Auto Dealer Monthly and the 2011 Special Finance Conference, congratulations to the 2011 winners for their stellar sales figures and success in the Independent Retailer Awards.
Vol. 8, Issue 7