#301 - The Art Of The Service Department

You are listening to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson.

Hello and welcome to the Independent Dealer Podcast brought to you by Buckeye Dealership Consulting. Again, guys, we're going to air for you an interview that Luke did at least here pay here 2023. So if you listen to the last one a couple weeks ago with Stan Summerall, this one, Luke interviewed a good buddy of his, Edgar Rodriguez. Luke, how'd it go?

It was great.

Edgar is a savant when it comes to service and recon. So everybody, no matter if you're a retail retail dealer or a buy here pay here dealer, at least here pay here dealer, you're going to get a lot out of this. Edgar understands how to get people to actually do their job, get techs to do their job, be super efficient, be super effective, and also get cars to the front line. He's so good at getting cars to the front line that the way he decides to pull back on selling cars, Jeff, is he just quits getting them ready. And. And he can move that lever that easily. He goes, okay, we want to sell 120 this month. We'll get 120 sold through recon, but next month, you know what, we need to back off a little bit. We're only going to do 80. And so it's very interesting how he uses levers in his dealership and he also talks about offshore operations. He's really moving toward moving people into other countries, help them with collections and all sorts of things inside his dealership. Super interesting interview. And there's a lot to get out of it.

Cool.

Here goes.

Edgar, introduce yourself. Tell us where you are, how many accounts, where you've been, where you heading?

My name is Edgar Rodriguez. I'm in Houston, Texas, little town down south. And I've been in buy here pay here about 26 years. We switched over to leasing back in 2020. I've been with a bigger dealership before where I'm at now. We started off as a Buy Rider franchise with a group. We had a couple dealerships in Salt Lake City, started two dealerships in Houston. Then we decided Buy Rider doesn't work. So we just got out and started doing leasing in 2020. We got to about 2,200 accounts with buy riders since 16 through 19, 20, 20. And so when we switch over to the Rodeo Auto model, which is lease year pay here, we just, you know, just kind of did kind of the same thing. I mean, really, it didn't change much for us. And right now we're up to about 1800 leases and we're starting doing some residual now.

1800, that's. That's a lot. And I've been to your dealership and.

We don't have that much space.

You don't have that much space. If y' all know Houston. Houston is very large and I would say you're probably 10 or 15 miles from downtown.

Yeah.

And the traffic never stops. You're right on.

Is that 45, 45 North?

Yes, 45 North. Traffic never slows down right there. Traffic bumper to bumper all the time. Edgar. Shop dealership is one of the cleanest places I've ever seen. How do you. I know this doesn't matter, but why, how do you keep it so clean?

It's culture, you know, it's just. That's the way we do things. From the very beginning, I've always believed that it doesn't matter if you have a big, nice facility or a small three bay shop. It's about presentation. It's about where your team works at. They want to be proud where they work at. So we've always had that mentality from the very beginning.

And one other thing he has in his dealership is the best tacos in Houston. I'm not kidding. He has a restaurant inside the service department and pretty much, I mean, most of your staff eats there daily, right?

Yes. So we, you know, we are very heavy on culture and making sure that everybody's happy. And I think my wife had the idea of building a kitchen in the back. So I think. Where are we going to do that? Well, we're going to do it right next to the shop. So we found a spot, we built the whole kitchen. We found a couple of ladies, they show up like around 5, 30, 6 o' clock in the morning, do breakfast for the team, lunch, and then they're out of there in the afternoon. We do that every day.

Do you think that that helps your culture?

It does. I mean, obviously our techs like to eat, so it's freshly made every day, so it helps. It just keeps everybody together. You know, we just kind of. We're like a second family and that's kind of what we do.

Yeah, I would say culture is a big part of Egger's team. They all share in what's going on. And if you've ever been to a store and you walk in next thing and it's called Rodeo Auto and every once in a while you hear a rodeo noise. Right. What is that?

So, you know, we're a little goofy. So every time they finish a car, it's getting ready to go to the front lot. We have this little yee haw sound that we put on the speaker, and it just goes across the whole dealership. So sometimes the customers are there and they hear the yeeha and they go, what's going on? Oh, there's another car coming to the front. Can I wait on that one? No, you already said on this one. But that's just to keep everybody kind of having fun.

Think about this. It's a portion of recon. It's really just recon. Right, but recon, it's the pride of going, okay, well, how many yeehaws did we hear today? Right? Because every time you hear yeehaw, that's another car for the salespeople to sell and another account for the collectors to collect. That's. I mean, it's bringing. It's tying everybody together. And I think that that's something that's hard for dealers to figure out, how to do that. And just that little thing can go a long way to. To creating culture and creating togetherness. And I really love that. Edgar has five bays.

We got seven bays right now.

Seven bays and a small parking lot. And you can. I mean, at one point, you were getting 120 cars ready a month.

When we started rodeo, we started doing, you know, we had two locations in Houston, one in Salt Lake. We, after the pandemic, we decided to downsize, just to kind of, you know, it's kind of the things that have to make to make sure that the business goes in the right direction. And at the end, we decided to stay with the north location. At one point, we're told, you know, let's kind of go ahead and not borrow anything. Let's see how much we can produce with our own cash flow. So we stayed at 70 units for about a year. We didn't borrow a dime from the bank. Then we decided to ramp up. We went from 70 to 80 to 90, and we got up to 120 for about five or six months, and now we're back down to 100, because we're in the process of getting a bigger facility to get the recon out of that facility to prepare for, you know, growing probably in the next year or so. But we have to throttle production and sales, you know, from 70 to 120, back to 100. And, you know, we can just move it up and down as we need to do.

And that's. So think about this. He's getting 100 to 120 cars ready out of seven bays. I mean, who in here could do that? I can't do that. We get 40 ready out of seven or eight bays, you know, so one thing that Edgar didn't tell me this, but the more I listened to him, and we're in a Service 20 group together, and the more I listened to him, when we visited his store, I understood that he is using recon to limit sales or to increase sales. Now we all can sit here and talk and think about, all right, how am I going to sell more cars? I'm going to advertise more, I'm going to do this, I'm going to do that. I don't think Edgar sees it that way. I think Edgar sees that the way I'm going to control cash flow, the way I'm going to control sales is through recon. Talk about how you've done that. You went into it a little bit there, but let's. Let's dig a little deeper. What. How did you come about seeing it that way?

You know, Bill was talking about 20 groups. I was in a 20 group for many years. And I remember when we started looking at the composites or the previous owner I worked for, he used to see the shop as a black hole. And I'm pretty sure a lot of you see the shop as a black hole. You don't know what's going on. You see cash going out and nothing's happening. So I took that very, very seriously. And so the first thing we started doing is tracking. You need to know where you are, tracking how much we're spending, how many hours per ticket on every car. We're tracking productivity. So that allows to know what the capacity was of every guy in the shop, every lift in the shop. And then, I mean, the first thing we started doing is tracking how many new parts versus used parts. And we started kind of giving the owner that feedback. And all of a sudden, in six months, we're not a black hole. We're actually saving money. Right? Because now we know how we're saving money. So we started creating that culture of how do we make this more efficient? That's how we started doing it. When we started this rodeo, the bike rider, we only knew one way to go, and that was just sell and build cars. And I remember when I joined this investor, our goal was to sell 35 cars a month. And we started right off the first month selling 55, and then we had to 70, 75. It was just by nature, that's how we do it. And it just took Off. It's just kind of the culture. You track where you are, you know where you stand. You're very clear about what your goals are. You're very consistent. I mean, I have, in my shop, every tech has a computer. Even the late techs have a computer where they can see where they are. And I have people that never touch a computer in their life. And now they're actually updating notes in the system and the ros. And that's through having a clear process and being very, very consistent. And if you know what your culture is, you stay on those two items and it just works. I mean, it's just like driving. You don't think about driving, you just drive. So we just have very consistent systems and we just repeat them. So it's just by memory. And that's how when somebody shows up, it takes, you know, usually about. I mean, you met the parts lady there, she just had started and it looked like she knew what she was doing already.

It's one of the cleanest parts facilities I've ever seen. You come to my dealership and my service department, it's a mess. Not there. Your techs are super proficient. What do you like to see them run at?

Well, we have KPIs, so we run on 130% efficiency and 85% productivity. And that's kind of the dual. To have a lift in my shop, you have to be at least there. If you're not there usually, I don't usually go. Maybe the tech is not producing. I look at my support team and that's the other thing that I've seen is you can run it through the text. But I think if you have a good support system, and that means you know in advance what you want to build, you know in advance what your target list is for the day, for the week, for the month, and you make sure that all the parts are there, target timely. And you have technicians that love what they do. They just produce. I mean, when. When we have the right amount of whip or work in process. I've seen R and R guys get up to 100, 140, 160% efficiency. But I mean, they just have a queue. They just go car after car, car after car, and everything is already built into the system.

Yeah, techs don't like to sit around.

No.

So if you're just. If your support staff is built properly and understand your expectations. Yes, they can do it, right?

Yeah.

I mean, very seldom you see lazy text. You do, but not that often.

I mean, I mean, the Text that like to work on cars. And they do that for, for a passion. I mean you just give them and they get into this, they start building and building and building and just there's no stop on them. We make sure they put the music on and you just get out of the way.

That's nice. We all, we all think about, oh, we all need, you know, 5, 8x. That's not your philosophy. What is your philosophy of the right mixture in a shop?

So it starts with I don't have a shop. I have a training and development facility. That's what it, that's what it's been since I started 97. That was my first project is to. We decided to start giving a warranty right from the start in 97. And so I got my first technician in and I from there, from the get go, I said we're gonna build a shop. So three of my R and R guys, I've known them since maybe 15 years ago. They were all latex detailers. Now they're R and R guys are doing 150, 160 considering that the whip is there. And so I found out that you have to have the right diet guys. I mean you have two diet guys that believe in training others and then there are not guys you can build. I mean, I have a kid, one of my diet guys, his kid just got out of high school and I brought him in summer school during the summer break and I told him, you're going to come to the shop, I want to make sure that you like the environment, you like the heat, you like the grease and all that. I wasn't expecting for him to produce anything. He was there, he was happy. After he arrived at high school, now he's full time and he's going to technical school. But right now he knows how to do ACs, how to do brakes. And it's been there six months because my older guys will teach them the skills. And he sees that he's got buddies that are in school and they're not even touching any anything yet and he's already doing these things. So we have just a culture of we share everything that we do and we have two diet guys that all they do is they share knowledge.

Do they, your diet guys, do they ever turn wrenches?

Yes, they do. So, you know, I have. So I think, you know, having. There's two types of technicians that I've seen over my history in the car business. You have your service tech and your recon tech. Your service tech is more into the maintenance the processes make sure that everything gets done right the first time. Your recon tech is more of a cost mindful technician. If it can be repaired, he's going to fix it. He's not just going to ask you, just, I have a laundry list of parts that we want to replace because that's what the maintenance schedule says they're more into. And what I found out is when you start training your people about your fiscal element of your dealership and they know where they need to be at to so the dealer stays on, it's easier. So we have a combination of a good die guy that's very process driven. He knows service by heart, but he also loves to train other guys. And then we have another guy that is the dye guy, that he is going to find how to cut cost and make sure that the car lasts for another eight months and just put it on the street. So those two guys are kind of the drivers of the rest of the guys. Now, my older guys, the R and R guys, the parts changers, you can always train, you can always change somebody to drive brakes, to do ac, to do all these things. But you got to find the right people in your support team. The manager that somebody that really believes. My recon manager, he was my parts guy many years ago. Last year he took the challenge. So we've been training on. So I hardly go in the shop anymore. I mean, he's just there.

How many of you would like to never have to go into your shop again? I know I would.

I have visibility, I know where they are. But I mean, so when I'm there is what you need. What can I do to help you get to your goal? And usually the question is, if you didn't hit the goal last week, do you know why and what are you gonna do this week to overcome that? And that's usually the conversation. And by the time we have those conversations, they already know what happened and they know what they're supposed to do and they always meet the goal.

I just learned something again. I love interviewing people because a lot of times I learn way more than I'm giving out here.

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Yeah, it's.

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Hiring techs. Hiring Texas is a, it's a bear and we're not producing enough. But it sounds like you're training your own techs. Do you ever have to hire techs? And if so, where do you find them?

Yes, when we started Bay Rite they had a particular system and hiring people and I went through a few techs. But I think the main thing is you need to know what your standards are. If you don't know, we've been in many conversations with how do you hire the right tech? And everybody's paying really top dollar for just skill. So a lot of people just hire the skill guy, right? The guy that has the knowledge, has the ASC certification. They want to bring them into their shop and then they found out they're really no good or they have a bad culture. So I think if you know what your culture is, one of the things that I've noticed is when your culture is super clear as to what your productivity should be. Actually I use productivity to actually let them know the tech I hired let the other guys know that he is that good. And I usually tell him when I'm interviewing, I said, so what's your efficiency? They were like, what are you talking about? So you say you're really good, so what's your efficiency? He says, what is that? And if he doesn't know, he has no idea. Then I just tell them this is how you track it. And they go, oh well, I've been doing this 20 years, so I'm 100% efficient. I was like, well you, then you're really not that good.

So you're not hired, right?

Yes. And another piece is just visibility. My guys know where they are every week so they can see each other and they can see who's slacking off and who's not slack enough. So it just helps. It's a pride thing, you know, they want to know if I'M the best guy. What's my numbers? And then they can actually go out for that.

What are you paying your technicians in Houston? Because I think Houston's probably a microcosm of the rest of the U.S. so I think your number's probably close to what everybody else's numbers should be.

We pay hourly. We work 45 hours a week, Monday through Friday and Saturday is optional. They can go in there and get some overtime. And we start from 18 all the way to 30. And like my high school kid, he's making like $18 an hour. He's already doing ACS, but he's going to go to school. And my goal for that guy, when I talk to him, I ask him, what do you want to do? Is I want to build fast cars. And I go, okay, so you. So my goal is to make that guy my first master tech with all the credentials and everything, so he knows.

And what do you think you're going to have to. In Houston, what do you think you're going to have to pay a master tech like that?

It depends. I mean, I had, I tried having master techs. I tried with two guys, and I paid like 100, 110 grand a year. And they just didn't have the right mindset. So most of my other guys, you know, saw the BS because everything was going like, well, you see this patch right here? That's what you're supposed to do. So it's really tough. You need to get people that believe in what you. You are doing. And in my case, we grow people.

Yeah.

And I don't mind paying, you know, like my foreman, he's a builder, he likes to build teams. And I pay him 92 grand a year. But he builds techs. So the two guys that I have, he's already shown how to do acs already show them how to do all the other stuff. They know the workflow, and again, that just keeps the pipe flow. Right now, my constraint is space.

Yeah, you definitely have a. And that actually leads us into the next thing we're going to talk about. And I've been on this recon facility kick for a bit. I just think it's such a great idea to remove recon from your location if you can, but if you have enough room at a location to kind of corner it off and let it be its own, you know, Nick did this on a. On a grand scale, and Stan is doing this as well. But it's, it's really important to have, when you're doing 100 plus cars, a month and wanting to scale up to have a centralized recon facility. Kind of walk us through. I know you've been trying to put this together for a year at least and had some property issues. Why do you need a recon facility and what is it going to look like in your scenario?

So I love when, you know, we had the breakout sessions yesterday where what Nick was, you know, they. They ask him questions. And I think it begins, like Kobe says, with the end in mind. What do you want to do? How much do you want to grow? Do you really want to grow to 6,000 accounts? 5,000 accounts? Do you want to stay at 500 accounts? But I think you have to start where you want to be first. When we engage the investor that we work for right now, we ask them, what do you want? And that was the first question is, well, I want to have a big portfolio. I want to be a bank. I want to do this. Okay. So we work off of that premise. My previous dealerships, we got up almost to about 6,000 accounts. We have a much bigger facility. Facility. So we've actually. This rodeo gig is a little bit step down from where we're used to be before. But I think the key question is if you want to be small, was nothing wrong because you're making money, you're comfortable there, but you need to have an idea of where you need to be at. And in our case, the idea is to move the recon out of that facility. Because right now we can haul about 45 to 50 cars frontline ready. We've been doing, we can do easily 120 out of that frontline inventory. But if we move the recon facility out of there, we can probably get that store to do 180. And then we just want another facility to be able to produce about 300, 350 cars. And one of the choices we made when we opened Rodeo is we were going to focus on production and we decided to outsource all our customer work. So another thing that we focus a lot is on relationships, you know, with your local vendors. We actually helped one one of my porters became a body guy. He opened his body, says, I'm going to be your first customer. I'll be his first customer forever. But you have the leverage. So you find we decided to outsource all our service work. So we've been paying, you know that. So we want to bring that back in house. We want to bring buddy in. We want to bring tires, alignments, all that in and make our shop a one stop Shop, create some revenue and with the revenue, put it back into the relationship to sell maybe another 10, 15 more cars. Whatever, whatever we can do with that.

How big a facility are you thinking about building? How many bays are you going to need at this reconciliation?

So right now I'm thinking, so I'm doing, I have seven, I'm thinking building one that I can go up to 14 and then maybe, you know, expand it. So right now we're looking more of land more than the actual box. So we're looking at probably five acres and you know, but it has, it has about 10,000 square feet foot building and want to put another 10,000 square on them. Second phase. Second on the second phase. But we're going to, you know, I have a buddy guy on the hook already that he likes to build guys. So I mean to me it's all about do you want to grow people? And if you do, come on, let's do this gig. And they really love it.

That's, that's neat.

Hey guys, it's that time of year again. It is tax time. And of course our friends at Tax Tax Max, they are the place to go to to file taxes for your customers. If you're not familiar with the program, I definitely recommend you go back and listen to our previous episodes to really wrap your brain around what this program can do for your dealership.

Yeah, it's not just for the buy here. Pay your store either, Jeff. This is for retail dealers getting that extra down payment to make the deal work. And also for service facilities. If you have a service facility in your, in your dealership, you can use this money to either pay down that debt or get some debts or get some repairs made. So I've got some buy in this year, Jeff. I'm going to go full throttle at it and make a difference.

Yeah, that's, that's exciting news. Use the discount code VIP40. So if you use VIP40, that's our discount code to get you 40% off the VIP package, which is like the top of the line Tax Max situation. You gotta file a couple of returns to pay itself back, but it's definitely worth it. So VIP40taxmax.com you have CPI, right?

Yes.

And it seems like everybody in Texas essentially has 100% penetration of CPI. How do you handle CPI claims currently with bodywork. I know you said you had that one gap. And in the future, are you going to have a body shop on your recon facility?

Yeah. So right now we have what we call a warranty administrator when we Decided to solve the sublet. The customer service. We created a warranty administrator position. And what they do is they process claims, whether they're mechanical or body claims. And so she takes in, she talks to the customer, and I mean, just opens up the claim. We have two body shops that we partner with and they process the claims. And that's pretty much how it works on the service side. What we did is we created a Google Calendar and that's how we do our appointments. So technically, every collector has access to that Google Calendar. So we had four shops where we outsourced work and we created the events in the calendar. So when they get a call in, they say, my car is broke down. They look at the Google Calendar, see which box is open, and they just set the appointment and the shop is linked to that calendar and it's just a simple Google share calendar. So when they actually set the appointment, the customer gets an invite on their email and the shop gets an invite of that. Then the administrator goes at the end of the day and just make sure that the concerns are right.

You'd be amazed at things you learn by interviewing people. And I said this before, that's the best idea to 20 group right there is having a shared Google Calendar that your collectors can be on that the shops you're using can be on. And I mean, that's amazing. That's really a great idea. Body shops are hard.

So that's what I heard.

Yeah. I mean, are you gonna, you know, how are you gonna tackle, tackle that when you have it at the recon facility?

We've never done body. I mean, we're always on the mechanical side of it. So we're kind of, you know, I think we know what we want to do. We know what the culture is. So I'm just. I think I have a guy, he's got a job right now, but I think he's. He's an older guy. He's, you know, he's done his work and I think he's ready to. To me, you know, I'm about to be 50. It's about legacy. And I think I heard that some something yesterday. It's. What are you going to live in the industry? Right. That's something I learned from, you know, from many years ago. And so I look for those guys that want to kind of make sure that they get remembered somehow. Maybe a little idealistic, but it helped. It works actually. So I'm going to bring this guy in and so we're just going to try it out. I mean, I Have a couple of friends that I've been talking to. I got coast to coast right across the street. We have really good relationships. I got an opportunity to be on the HIADA board, Houston. So they're there. So we have a lot of talks. So I mean, I got, you know, friends that they've been there. So we're just gonna try to learn as fast as we can.

Yeah, yeah. It's gonna be a learning curve and I. You can do it. I know. No doubt. My mind. You've got the mind for it. I'm not sure I do. So there's it. You were in the buy here, pay here business for a long time and you switched to lease here, pay here. I know you. I know you like lease here, pay here. I think you like it probably better than buy here.

It's been fun. It's been interesting.

Is that a learning curve?

It was mainly on the terminology accounting side. I think the front end is pretty much, you know, compliance wise, but you have to say the right words. But I think the customers at the end of the day, you know, they're with us for a reason and maybe they don't have the skills to go through a loan on their own. So we're going to be there for them the whole ride. But I mean, when we switched leasing, we came to this conference in 2020, we started just learning the language, the terminology. But I think on the front end, at the end of the day, we're providing a service which is transportation and maybe get your credit repair. So I think that doesn't really change from when you're doing bike pay here to lease here, pay here. I think it's the same thing.

Is there any difference in the service side of it?

No, we haven't seen. I mean, customers don't know how to repair their credit and they don't know how to repair their cars. So that's what we're there for. Right? We're there the whole 36 months or whatever, how long they stay on the books. And you just gotta know that you're gonna have to provide that assistance one way or another.

So we've got about 15 more minutes and I'm gonna switch from the service side to collection side.

Hey, guys. Jeff, it might be tax time and you might need some money. I know I need some cash.

I hit up the bank the other day.

I was like, you gotta feed me. Because we're growing, we need the cash. And Prominent is there to help if you, you know, if you need it because you're gonna need it if you do it right. Right now.

Yeah, there is definitely a bigger appetite for the cost of cars. Obviously. You know, we talk about buy here, pay here kind of having its day, hopefully soon. And all the writings on the wall of some of the bigger lenders and banks and money guys tightening up and pulling back, which is just pushing more people into our market. I've seen it. I had the largest month I've ever had last month in October. So as far as dollars amount loaned out. Right. So I finally went over the half million dollar threshold in one month and that puts a bit of a constraint on the all new cash flow. So I'm definitely feeling it.

Yeah.

I mean it's time. Let's put the throttle down and let's call our buddies at primaland because they're going to help you in business. They're going to help you look at your books, do it the right way and they're also give you that cash to grow.

You've done something I think is very unique and I think actually Nick may be doing this as well. And that's you've taken a chunk of your collections and, and moved it offshore. How did that come about and does it work and what does it look like?

That was right after the pandemic. We started struggling with people wanting to actually come and work. Everybody wanted to work remotely. So we hired some people. We had a little bit of turmoil in the collection department and we again, I emphasize relationships because we met a friend through another friend and we started talking about we had some friends in Honduras and so we went over there and visited and we were just talking about the business and maybe considering doing a call center thing. And they had a friend. So the friend shows up at the dealership. We started talking and we decided to engage with this call center. It's not a typical call center. They call themselves bpo. It's a business process outsourcing company. They focus mainly on your processes and they try to mirror what you do. But one of the biggest decisions we have made from the very beginning is how much we were going to invest in this relationship. Right. Because if you put your hope in just the call center alone, you're probably going to fail. So we decided. My wife spent a lot of time with this call center from the first months and right now you can tell the difference. They use our system, our software, our phone. So people don't even know they're in another country because we taught them how to be account. We call them customer care agents. So we showed them how to do everything from A through Z. And I mean, at any given point, there was one lady that was actually as good as our best collector in Houston. So we also gained. They trained them, they create all the manuals, which is something that was really good because we know how to collect. But sometimes we're really not good at writing our processes down. And they actually have the call center mentality where they have to document everything for compliance because they have a very high turnover ratio. So they have to have all these systems in place. So they build everything, map out all our systems, they do the onboarding. They have a phase that's called nesting, where they show them the culture of the United States. They make sure that they speak the language. And I mean, it's been working really well for us.

I think you said that they may speak better than they ask us about English.

You know, we had a salesperson at one point in the front of the house and these guys actually spoke much better English than our sales guy. But so, I mean, you know, we are in San Pedro Sula, so that they're in a place where there's a university and there's a lot of people that have that influence. So plus there's a lot of people that lived in the US went back home and they work for this kind of company. So they're very, very pro American.

So do, I mean, do people in other countries understand sub prime credit customers and how to collect them? Or is that something you really have to instill in them?

We made the decision to train on the culture, on the buy here, pay here culture. Because if you just, again, if you just focus on a call center or somebody just to answer questions, then that's very different. What we actually did is we taught them how to think, be proactive, resolve conflict, you know, kind of understand the customer. And the lady that does all the training is amazing. I mean, she just, you know, just took it and taught it. And we have four collectors right now. Two are in Honduras and two are in Houston. And it's. There's almost no difference in performance.

Could you see moving at all to hond doors?

That was kind of the idea is if we ever had an emergency or something happen, we have a backup. And like for example, when we're closed, they open and they collect. So we have a remote site where they can actually do exactly the same we do. If we have an emergency, we have somebody, which we had at one point we hired two collectors and within the first week they quit. So they just got there. But we didn't miss a bit because we had already people working the queues, and that's usually the biggest hit is when you have a collector leave who handles that queue. And then so right now, we have that support arm, which is really an extension of Rodeo, and surprisingly, we're in the process of hiring another, and they have other businesses that they do work for, and one of the guys is actually trying to apply in our brand because they see the stability of the collectors in our model over there, and they go, like, I want to work for that company. Because they train and they're not on the phone, just answering phone calls. They actually get to build relationships. They know customers by name. So now they have their agent in Honduras, and they know them by name, and they know the customer. So it's been really seamless.

What's the difference in cost to. To hire the folks in Honduras compared to. To your Houston collectors?

So we are paying about $2,200 per agent, but here in Houston, we're saving about $1,400 in salary. But we don't have to have any infrastructure. I mean, they do the hiring, the training, the onboarding, everything. We tell them, you know, I need three more agents. They'll go recruit, hire them, onboard them, put them on, and it's built into the place.

I mean, it really sounds too good to be true.

I mean, we don't have any liability right now. It's just you get a bad employee and they do something wrong. I mean, they have very high standards on what they do, security and all that kind of stuff. So, I mean, it's good. It's a good alternative.

And I did leave out a very important piece of the puzzle with Edgar, and that's his wife. You really have an amazing person helping you do all these things.

We make a good team. She's the CEO of the company, so she is my boss twice. And so she's the boss, and she's the boss, so. And I'm good with that. So, you know, sometimes I tell them, I'm the yin to your younger. I'm the young to your gene. I don't know. So we complement each other really well. And she's really done an amazing job with the whole collections thing. And at the beginning, it was stressful because we wanted results quickly, and then we had to make the decision, do we want to. How much do we want to put into this relationship? And to us, it's a company, right. But we're more of a build, you know, the relationship of. With any vendor, you know, you Build a good relationship. And it goes a long way. And we just decided to put that. We've been on it for 18 months now. And, I mean, it's amazing. They actually. Their team came to the store to visit it. They did a SWOT analysis on a leadership team. They gave us a lot of feedback. They mapped out a lot of process for us. And I mean, except for the traveling, they didn't build us anything additional. Because what they do is they want to know, how can they be an arm to our business? And they want to understand the business from the back end.

Is there anything that you've learned from having this offshore arm that you brought back into your dealership in Houston? Are you going to offshore some more things in your dealership or.

So one of the. So I remember when we started, you know, with. With the investor that we're working with right now, is he. At one point, he considered, you know what, maybe we can buy some portfolios. Some people. Yeah, I think around the early days of leasing pay here, I think we found out there was a dealership, had some accounts. And we're having this conversation, and I remember he asked my wife, the question is, okay, so they have this portfolio. Can you guys collect on them? And we looked at each other and we're like, we're not ready to take on that portfolio right now. So part of the decision to have this extra arm is if we ever had the opportunity to acquire some accounts, all we had to do is just call the call center and say, can you get me two more agents? And they can put them on, and we can just put that on the arm.

That's really. That's neat.

And that's kind of what. That's the reason why we had to put so much time and effort into building this relationship. Now, I don't know how much Nick is paying, but, I mean, for us, it seems to be working because we don't have the headaches of having to hire. I mean, we actually got. One of their agents is a supervisor, so he takes on a queue. He makes sure that. I mean, they track so much stuff. And a lot of the stuff that they're doing we're actually now mirroring in dealership. So it's help us, you know, kind of get our agents up.

That's great.

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