Article

Three Independent Dealers Carve Out Niche

August 2007, Auto Dealer Today - WebXclusive

by Jennifer Murphy Bloodworth - Also by this author

xsq
The evolution of a dealership can take a dealer on many different routes. Sometimes these routes are unexpected, and sometimes the path is planned early on. A dealer who sells one car as a high school student through a classified ad might end up running a 24,000 sq. ft. warehouse full of luxury cars, On the other hand, some dealers know exactly what they want to sell and do just that.

Successfully carving out a niche can take years—even decades. For three independent dealers, differentiating themselves from the stereotypical car lot and focusing on a specific niche has paid off.

The Luxury of Selling Jaguars
Peter Bulban, owner of TexasCarsDirect.com, Ltd. in Dallas, started selling vehicles out of his parents’ garage in the late 70s, and now has 24,000 sq. ft. of warehouse floor to showcase his bread and butter—pre-owned Jaguars. When he started out, he didn’t have a desire to sell Jaguars; his business used to be named Texas Mustang Sales.

It wasn’t until 1996 that he saw Jaguar’s potential. After speaking with a representative from Jaguar Remarketing, he “wasn’t all that interested” in the Jaguar product because he was worried about the quality of the car. However, Jaguar made him an offer he couldn’t refuse. They gave him $1,000 to help with airfare if he was willing to purchase 11 pre-owned Jaguars, so he did. What sweetened the deal was when Bulban realized that Jaguar was giving him $1,000 per car he bought from them.

He sold the first 11 Jaguars in three days without spending $1 to advertise them. One week later, he bought just under 20 more cars and sold those in a matter of days. He said in one month, his dealership received around $50,000 from Jaguar, and Jaguar was in the giving mood for two more months after that—a sweet deal indeed. Bulban has been loyal to Jaguar ever since. “Basically, I just let the Jaguars crowd everything else out of our warehouse,” he said.

In 2006, Texas Cars Direct sold 1,172 Jaguars; that’s over 97 Jags per month. Even though Jaguars are his main focus, he sold quite a few other makes and models last year. He sold 466 non-Jags in 2006, averaging just over 39 per month, making his total sales for that year 1,638.

Also aiding Bulban’s sales is a strong Internet presence. The Internet started booming in the mid-90s—along with his Jaguar sales. He called the timing of his dealership’s Jaguar boom paralleling the Internet boom “a perfect storm.”

Texas Cars Direct is also committed to having a local presence. Even though Bulban’s print advertising is “waning,” he said having a presence in print advertising is important in his local market, the Dallas-Fort Worth area.

In addition to his online and print presence, he attends and donates to charitable functions. The dealership sponsors various charitable events in its local community and even stepped up to help in the aftermath of Hurricane Katrina. “When we see things where there’s people that are a lot less fortunate than we are and we can help, we try to do that. Being able to sponsor and join hands with other people is also another way to network,” he said.

Most of all, Bulban strives to keep his current customer base happy. “Our number one source of marketing is the network we’ve been able to build by how we treat every client and every deal.” One word that never came out of his mouth was “customer.” He exclusively used the word “client” instead, which is a good sign for business. Clients seek you out for professional advice, which is how Bulban views his relationships with his buyers.  Some of his clients have been loyal to him for over 15 years.

Bulban, who employs 15 people at his dealership, isn’t stopping at 24,000 sq. ft of Jaguars. He expects, and is planning for, expansion. Just last year, he acquired another warehouse located adjacent to his current location that will provide an additional 18,000 sq. ft. of space when he outgrows the warehouse he’s in now. Although he’s not quite ready to expand yet, he has plenty of room to do so.

When Pacific Fleet opened in 1986, Ford had an inventory of five or six vehicles. He now typically stocks between 100 and 120 vehicles. Upon opening, the dealership also sold some used cars and trucks, but it soon developed into strictly fleet vehicles. Ford said, “It evolved more into the commercial fleet and lease…We had a large demand for it, and the longer we were in business, the more demand we saw for it.”

Ford’s dealership is located on a two-acre lot, and it employs two sales associates. On average, the dealership sells between 40 and 50 units per month in a no-pressure atmosphere. He said of his dealership, “It’s low-key. There’s not a lot of pressure from our standpoint… It’s all real straight-forward. If somebody needs a certain type of work vehicle for their business, then the reason they’re at our dealership is because they’re trying to fulfill that need. It’s a business decision; it’s not an emotional decision where they’re trying to buy a red sports car.” He also makes sure all vehicles on the site are listed with a price, so potential customers know they won’t have to haggle over dollars and cents.

The Pacific Fleet Sales site confidently states, “We specialize in sales, service and leasing of quality, reconditioned, fleet vehicles such as cargo vans, cube vans, step vans, passenger vans, pickup trucks, service body trucks, flatbed trucks, dump trucks, and box trucks.”

Like many dealerships today, the Internet plays a big role in sales at Pacific Fleet. “Most of our sales are driven now by our Web site. All of our advertising directs people to our Web site, where they can then see the inventory… We found that [our site] took a lot of our phone conversation away because people can answer their own questions by looking at the Web site,” said Ford. The customers that do call the dealership are directed to the site to get future questions answered.

Also on his two acres is a service shop used for servicing and reconditioning vehicles. The shop does some service work for customers, but not much. For the most part, the shop is dedicated to getting the vehicles ready to sell in the best condition possible.

Ford insists that every vehicle is inspected and repaired. He said, “We restore [vehicles] as much as we can back to very good condition, so when people buy from us, they know they’re getting something in good condition that doesn’t have a bunch of issues [mechanically].”

Ford’s business model is simple and quite effective, “We just present what we have and explain to the customer what we’ve done to make that vehicle a good vehicle for their business, and that’s usually all it takes.”

Continuing a Tradition—Cadillac Style
Quality Auto Sales, a pre-owned Cadillac dealership in Knoxville, Tenn., went for a rollercoaster ride a few years ago. The store originally opened 25 years ago with Joe Whaley at the helm, and it didn’t hit troubled waters until a few years ago when he sold it. The dealer he sold it to decided to relocate the used Cadillac dealership near the new Cadillac franchise store, but that plan didn’t exactly pan out. The dealer went bankrupt and Quality Auto closed down until Aaron Posey came along.

Just over one year ago, Posey (who worked at a franchise dealership at that time selling Cadillacs) decided it was time to go into business on his own, and his eye was on the original Quality Auto Sales location. He’d met Whaley through his former boss, which also happened to be the same dealer Whaley sold Quality Auto to. With the help of Whaley, the former owner, and Mark Gallaher, Posey’s business partner, Posey reopened Quality Auto in May of 2006 on the same lot Whaley originally opened it on a quarter of a century ago.

Over the past year, Posey, Gallaher and Whaley have been rebuilding awareness that the original Quality Auto Sales is back open for business. While they advertise locally in the newspaper, they also sponsor local events like golf tournaments, so people know where to go to buy pre-owned Cadillacs.

Many of Posey’s previous customers from the new Cadillac dealership followed him to his new business to purchase vehicles and place their requests for hard-to-find Cadillacs. Also, many of Quality Auto Sales customers from Whaley’s early era have returned to do business with him, Posey and Gallaher.

The Caddy-selling trio is also building awareness on the Web. They list select cars and SUVs on eBay and cars.com to attract potential buyers. They sell about 70 percent of what is listed on eBay, while others are drawn to their Web site from eBay and cars.com to view his full inventory. Overall, they average between 15 and 20 units sold per month.

While some dealers stumble into their niche by a noticeable demand for a particular make or type of vehicle, Posey knew he wanted to work with Cadillacs at an early age. His family has always owned Cadillacs. He said, “Whenever we had Sunday dinner, the driveway always looked like a Cadillac car lot.”

In 1996 when he was 17, Posey talked himself into a job at the new Cadillac dealership he worked at before Quality Auto, which was also where many of his family members had purchased their Cadillacs. He started out as a lot boy and was promoted to sales when he turned 21.  “That’s the only place I wanted to go to work. They hired me for the summer and I never left—at least until later on,” he said chuckling.

Posey, like many dealers, exudes pride for his make of choice. “It’s the best American luxury car, in my opinion. I like the variety of cars they offer… They make the best SUV.” His life-long history with the make and his tenure at the franchise dealership helped him strengthen his product knowledge, so he was able to open his own dealership in his late 20s. He’s also proud of the tradition he’s carrying on, “People who are looking for a Cadillac know they can either go to the new Cadillac dealership, or they can come out here. This place has a good reputation; it’s been here a long time.”

Regardless of whether each of these dealers knew what they wanted to sell as a teenager or if they stumbled into it from other business ventures, they have all carved a profitable niche for themselves. They have achieved this by doing what it takes—whether it’s finding a particular vehicle or ensuring all vehicles are in tip-top shape—to meet all customer requests and needs.

Vol 5, Issue 6

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

Blog

On-the-Point

Jim Ziegler
A Faster Horse

By Jim Ziegler
The Alpha Dawg wonders where the demand for driverless vehicles is coming from and has good news and bad news — but mostly bad news — for Fiat Chrysler and Cadillac dealers.

Strangers in the Mall

By Jim Ziegler
The Alpha Dawg makes new friends, stands up for Cadillac dealers, charts the rise of the independent lots, and reconsiders free trade agreements.

You Can’t Handle the Truth

By Jim Ziegler

Watch Out for Grizzlies

By Jim Ziegler

Opening Observations

Over the Curb