#308 - Board Of Directors w/ Brandon Pagano

This is the Independent Dealer Podcast, Education by Dealers for Dealers. Now, here are your hosts, Luke Godwin and Jeff Watson.

Hello, and welcome to the Independent Dealer Podcast, brought to you by Buckeye Dealership Consulting. Luke, we had a really cool thing the other day. So Brandon, he reached out to us by email and said, hey, guys, love the podcast. I. Listen, I'm just gonna throw this out there. I need some help. Can you guys give me some advice on my dealership? And of course, we do this all the time. People reach out via Facebook or phone calls or email and. But Brandon's situation is so unique. Brandon has got an awesome, awesome dealership, and he's been killing it for many, many years up there. And he's experienced what all of us are experiencing right now. A bit of a slowdown, a bit of a tightening. And when you start getting hit on all ends, you start to wonder if you know what the next couple months is going to look like.

Man, I. I feel it. I feel it, Brandon. Our expenses have gone up so much since. Since COVID happened. Trying to get employees in the right position, trying to train them up, having to pay more money for everything across the board. We're having to pay more money for the people we hire. We're having to pay more money for. To keep the people. We're having to pay more money for recon, all these things. It's kind of been a perfect storm since 21, and we feel it. And everybody out there, we feel your pain. We're here to help, hopefully. Right, Jeff?

Yeah. And so Brandon was gracious enough to come on the podcast, and we're going to beat him up. In this episode, we are going to dissect his dealership and give him our advice on what he can do to get things more into the black. You know, where are his pain points? What advice can we give him directly for his dealership? So, Brandon, thank you so much for joining us. Introduce yourself to the podcast community as much or as little as you want to share.

Yeah, man, I. Well, first of all, thank you guys so much for having me on. I, like I said, we've been. My wife and I have been listening to you guys for a while now, and I never thought I'd get an email back, but thank you guys so much from the bottom of our hearts, man. We really appreciate that and the opportunity to sit with you guys. So, yeah, like I said, my name is Brandon. I'm up in Coeur d', Alene, Idaho. I've been up here for. On this place for about seven Years now and you know, just trying to try something new. I was a, a journeyman lineman for a long time and medically retired from there with the back injury and so started this, bought this place about seven years ago and just been transforming it since then. So what.

And Brandon, was it a dealership when you bought it? Was it already? Oh, okay.

It was, it was a very small dealership. One man show type thing. Sold the go to the auction. He's buying a car for 500 bucks, putting 1500,000 bucks recon, selling them for three grand, you know, so wasn't the best place, really run down. So when we came in, we revamped everything and completely changed the whole entire model that he had going.

And what is your model currently? Tell that to the listening audience so we can kind of have an idea.

Of what, what you have going on right now. I specialize in a lot of like lifted or modified vehicles. So big lifted trucks, we build jeeps. But trying to buy that, you know, say 10 year or newer vehicle, some newer stuff, maybe a little higher miles, but all four wheel drive and all wheel drive stuff just because of the weather that we get up here, you know, trying to just be able to buy a better car and not have to put so much recon into it.

Yeah, I don't think that exists. But every time I move up, every time I move up an acv, it seems like I just spend more money getting them ready. And so you're full retail, right?

Yes, sir.

Okay. In the last six months, how many cars we sold per month?

Average 28 cars a month.

And is that good for you? Is that not good for you? Where, where we sit?

I, I think that's, that's a, that's a really strong number for the size that I am, you know, that's turning about half my inventory every month. I'd like that number to be closer to 35. I think it's definitely going to be a better number to kind of have a little more cushion, if you will. But I mean it's, it's not a bad number for my size and for the amount of dealers that are up here, I think that's pretty fair. But I'd like to see it a little higher, obviously.

And during COVID I think you told us earlier you were much higher, right?

Way higher?

Yes, sir.

Okay. And everybody's feeling this, the slowdown, the interest rates. I mean, it's, it's a real deal. And so don't, you know, don't feel ashamed that, that numbers have dropped off because they have for everybody. Is it expenses that are hurting you? Is it gross that are hurting you? Where do you feel like you need to. To focus, to get the business where you want it to be?

I definitely think our front end gross needs to come up a little bit for sure. And I definitely think our back end grosses need to come up with, you know, extended service contracts or, or Gap or something like that. I think our background gross is extremely too low. And I think we need to definitely work on that and then trying to bump up that. That front end gross a little bit.

Yeah, I want to dig into. Luke, let me go from the start too, because looking at your profile, right, and let's talk about real quick. The, the research we've done, Brandon's given us some of his numbers, so we can move this along quickly. But you've got a great Google presence, right? You've got great reviews. You come up at the very top of a search for your area. Your Facebook page looks good. You're updating it, you know, with some current stuff, car special. So you guys look like you're doing a great social media presence.

Not a lot.

No Facebook ads. It doesn't look like you're running many ads. And I didn't see any of your vehicles in Facebook Marketplace either, so. So that might be two areas that if you don't have your salesman posting the cars personally to Facebook marketplace, that could be a benefit to get out there. Because looking here, it seems like you guys are very dependent on car gurus for your leads. Does that seem accurate?

Yeah, Car gurus is one of our, our better lead sources. Excuse me. Facebook is pretty good. The. Excuse me. My salesman does put stuff on his personal Facebook also. There should be ads on there right now. What we're trying to do is, you know, the amount of money that we are spending with say, Facebook and Cargurus and Auto Trader. I feel like talking with certain people, there's actually better ways of tricking that, right? Maybe taking pictures of say 6 subarus in a line that I can advertise boost that. But I'm boosting six cars at once. Instead of boosting that one car, paying 20 bucks a day or 50 bucks a day to boost that one car. So we are trying to. That's something that we have just started this year, last couple weeks, just trying to figure out how to work on our boosting stuff. And then the auto trader stuff. I feel like the auto trader ads, we've gotten 117 in the last six months. But I feel like, they're not real. They're not really, I can honestly tell you that I don't feel like they're real leads. That's another thing that we're going to be looking into, possibly dropping Autotrader. I just feel like, you know, we get calls from guys back east and we try to return that email or call, and there's nobody there. So, yeah, we're definitely working on that.

So we asked you for your leads per source. What, what would probably be a better number is your sales attributions.

Right.

To look at those sales that you got, you know, the 28 from last month, the 28 from the month before, or even these 472 that you did in the last six months. And that might be a good exercise to go back and say, okay, of these 172 lead sales in the last 6 months, where did I get these leads from that actually converted to a sale? And then that would give you really good data to say, you know what? You're right. I don't need to be on, you know, automator.

Yeah. There's something interesting in here that, that I haven't seen in, I mean, years. Never heard anybody talk about in years. It's this Craig List, Craigslist spin. Does Craig, does anybody even go to Craigslist anymore?

We do get, we do get out. I would tell you, I can honestly tell you, out of, out of the four we're using, our top three would be, you know, Cargurus, Facebook, and Craigslist. And we do by tracking that. And we are getting better this year. That is one thing that they're working on, is tracking those numbers. Um, but, yeah, you, you'd be shocked. I, I, we thought about taking it off, but we actually do get at least one to two a month just from Craigslist alone.

Yeah.

Like actual sales.

That's cool. That's, that's awesome. And, and if you're tracking those sales sources, which you absolutely have to be doing at the time of sale, it's so crucial, you'll be able to dissect that a little bit more. The one thing I would caution when we talk about, you know, expenses and if you start to tighten the belt, I think personally cutting back on advertising is the last place you want to look. Hey, everybody, real quick. Buckeye Dealership Consulting, obviously a continuing great sponsor of the podcast through 2024 and a great place for reinsurance to put your reinsurance money.

Yeah. And, you know, we were talking to Brennan here, and one problem. He's really Having is back end gross, Jeff. And I guarantee you Buckeye will help with your back end gross. There's no doubt about it, right?

Yeah. Having your own company. And I'm switching over to Buckeye right now. So I'm going through the, I'm going through the process, guys. It's not that hard. A couple of documents. It's been a fairly smooth process. I'll give you guys more of analysis when I get through it completely, but it's not scary. So just call them, get the ball rolling. Either set up your company or get your company switched over. Guys at Buckeye are going to take.

Care of you well for sure. And, and I think he, I think he's underspending on advertising. Currently, he's only spending $120 per sold unit on advertising. Jeff, that's super low. And you know, you're probably, I'm not going to tell you to spend more money because I'm not sure that's the right, right spot. But to get to the number you need to be or you want to be at 35, I mean, in general, you would think somebody spending close to $7,000 a month to get there, don't you think, Jeff?

Yeah. Yeah, you're definitely getting a good deal on some of these. I look at some of this cost for some of your guys. I won't mention them, but yeah, you're getting a pretty good deal. And I look at these other ones. Like, you know, you rank well on Google because of your reviews and your Facebook spend. Those two just seem really, really low. That Facebook spend should be like three times that, and your Google could be two or three times that. And I think those would pay off well. And if you're tracking the numbers, you'll see that.

And so take one other thing, you know, just a quick thing to talk about on, on his, his, his advertising, his marketing. The one thing I see a lot when I was looking at, at your, at your website, your Facebook page, it's a lot of cars. It's not a lot of you. It's not a lot of the people that work there in your dealership. And people, people do buy cars, but people like to buy from people, too. And so you've got to remember that. Is it about the car? It's about the car, but it also can be about, about you and your family and the family of the people that work there. So I would encourage you to, to kind of update your website a little bit, because when I go, when I went to your website, I just got Hit in the face with cars. That's all I got hit in the face with. And, and that's fine. People are shopping for cars. But when I go here and I go, okay, well I want to, I want to see who I'm walking in to speak to. So I clicked on your about us and there's nothing there. There's those pictures of the people that work there. There's no pictures of you. And, and I think that's a big deal. I think that if you, if you put yourself out there a little bit more and actually advertised your brand and who you are, decide on a brand. Jeff has a brand. I have a brand new. Most people out there have a dealership brand. I don't see that with your website or your Facebook page. So I'd encourage you to kind of update and get there. Don't you think, Jeff?

Yeah, absolutely. Definitely. Get your, get your face out there. You and your wife, you know, she's part time in the dealership that front and center, man, seven years running this place. I mean, yeah, that's a, that's a great story.

And there are some beautiful. In the area you in is probably some of the most beautiful country in the U.S. and so I, I think I would, I'm sure you and your family go on hikes and things like that, man. I'd get out there, get some pictures to get it on there because people really do like to see that.

Okay.

And it's yourself, it's your salesman, it's their personality and it's the car in the background, right?

Yep, exactly.

You, the lifestyle. You're, you're, you're funny. Your, your place is having a good time, you guys are enjoying it. You're doing a car walk around explaining it, but the car's there. You, you know, so let's move forward. Now talking about your, you know, buying cars in your inventory mix. I don't want to spend a lot of time there because I think you've got that dialed in. Like when I pulled you up on Vinq and I looked at your make and your, your days in inventory, you've actually got a pretty good turn time, right. To me it seems pretty tight looking at, at your, the amount of cars you have and the amount you sell, you're at like a six time turn somewhere in that ballpark, I think so, so pretty decent. You don't have a lot of aged inventory. It seems like you're getting the right stuff. Obviously you're struggling with logistics, right. Because of your location, getting cars, getting them Shipped to where you need them to be as well.

You know, Jeff, I hear what you're saying. If I were him, I would tighten up my inventory. And what I mean by that is you have cars at 30, $900 and you have a truck at $60,000. Right. I would, I would like to see you narrow that down and get car, you know, kind of having one or two, three or $4,000 cars that's going to draw some traffic to your website. So I'm not against that, but what I'm against you having is cars over $25,000. The more cars you have over that range, the more time they're going to sit typically. And they're just eating up your interest with the floor plan company. Right. So, you know, one thing I heard you say, well, when you first talk about it, it's like you like to build Jeeps and you do have some Jeeps. You know, if you're selling jeeps here and, and you're making a good profit on that, you might want to lean into something like that a little more. Then you can kind of define what you are. I, I think that you have a lot going on with, with your inventory. Is, is my opinion.

Yeah. And you know, honestly guys, that makes sense. I've actually kind of sat down and the wife and I have actually kind of reflected on that. It's like, okay, well, we're known for that specialized vehicle of, you know, maybe having a big lifted diesel out here or you know, maybe a lifted Subaru or these big lifted jeeps and a lot of people that come in and a lot of drive by traffic is like, we always drive by, we see your, they're just, they look great, you know. Thank you. So that is something that we've actually talked about trying to, to do that, you know. And you know, shame on me every once I get kind of caught up in that one off vehicle. You know, I've got a 98 Ford Ranger out there with 66,000 miles on it, man. I mean, a one owner and it's like, I see that I'm like, gotta have, gotta have, gotta have it because I'm the only one that has that vehicle. You know, so there is definitely some things that I have to work on and stuff that I've had to change over the years. You know, I can't buy stuff that I like. Right. That a lot of people don't like what I like. So. But we have talked about that and I think going forward this year, that's why I'm so Glad I'm getting to do this early this year is to be able to make these changes going through to where, you know, hopefully towards the end of the year, I can come back and say, look, these are what we did and this is where we're at.

And there's nothing wrong with selling what you like. Okay. As long as you can make money doing it. Yeah. Because if you, if you do sell what you like and you make money at it, that's. That's perfect. Right. But I know that I've had to narrow my, my vision on what I want to buy because I know cars at my dealership, when they go over $18,000, they sit and I had to have my sales manager come to me and say, luke, I know you like those cars, but you got to quit buying them because it's harder for us to sell. If we can keep that price range from 10,000 to $18,000, we're going to sell more cars. What do you want to do?

And I think you can, you can use that DMS to extract that data and say, great, okay, let me look at my cars that were shortest days in inventory. Right. Over the next last seven years, which cars am I turning the fastest?

And they can give you a lot.

Of insight as to which ones you know, because sometimes we anecdotally know, but do we really know when we take that big picture? One thing I want to get into here is your employees. Let's talk about just a real quick breakdown on the structure of your dealerships. I think this is gonna help. So you yourself, you're the buyer. Your wife is just very, very part time helping you keep the books. You've got one sales guy that does financing and sales. You've got a receptionist slash BDC person. And then you have a service advisor, two techs, detailer, porter, and then another part time social media person. Does that sound about right?

Yes.

Okay.

Yeah.

So I think we talked about this before a little bit in the, in the pre call. But Luke, we talked about. I think the, the blaring thing that stands out to me is if you have a salesman and f and I guy and a part time BDC person.

Yeah.

They're overwhelmed.

Yeah.

I.

This is that he's selling 28 cars a month with one salesperson. And.

And that that salesperson is also the.

F. That's how f and I. That you can't make that work. Those numbers just don't work. And. And the reason is, is because Jeff pointed this out, this to. I mean, pure genius is that Your back end is really low. Your back end profit. And the reason it's really low is because this guy is trying to sell cars. And, and as soon as he gets the deal bought, he's, he's selling it. He's not working the deal and getting more. And I think that's if there's one place you can, you can fix and sell more cars, it's with having another salesperson. Right, Jeff?

Yeah. So what I would suggest, and we talked about this, you got a guy there that is. You feel your number two, right? Or he, he's, he's next to you, he's the guy that could run the place when you're gone, sick, dead on vacation, whatever. I think the smartest guy in your dealership has got to be either buying the cars and, or running the F and I, right? Because that's the lifeblood. Do my getting a good car at the right price and us dealers, that's going to be the last thing we ever let go of. So we're going to do that, right? Brandon, you're killer at that. You're going to keep doing it. The second most important thing is who's bringing the money in the door, right? Who's getting my checks, who is getting those deposits, who's getting the best deals from the best lender with the best callback and, and the best back end products, right? That's where your second best person needs to be, in my opinion.

Hey guys, jumping in here is Jeff's favorite time of the year. What time is it, Jeff?

Tax time, my friend. It is tax time. So you guys know it is the 9th of January. So far we have filed six tax max deals and a total of 25ish, $23,000 coming back of which we've already printed a $6,000 advance check that I put in the bank on Friday. So the money is there, it is coming.

And tax backs is the way to do it. Money comes right to you, Jeff, and you don't have to deal with it, right, buddy?

Printed the check, I signed it. It's my favorite time of the year, man. Just signing the backs of checks and depositing them. It's great.

And you can text them to file. It's so easy. It's use our code. VIP, right, Jeff?

Yep. VIP get 40% off. Call the guys at Tax Max. Get signed up today. It's not too late. Yeah, totally.

Makes total sense because here's the deal.

You need to go out and get more lenders. You know, you cannot rely on one or two lenders to be bringing in, and I don't know who your funding sources are. That might be something to look at, too. I'm funding 90% of my deals through this one, you know, Cuddle Credit Union. And they're. Because that's the only one that my salesman knows. He knows their program, so he shops them there first, and that's who buys them. We're not looking for a second call. We're not looking for some other lender to make more money on this one. So having someone who has the time and the incentive, so whoever you put in that position, he's got to be incentivized based on a percentage of front end and back end. Gross. Right. Come up with that pay plan where he is willing to put a second hash together. He's willing to get a second look on this car and this deal, but. Because it makes a difference to him, too.

Yeah. You know, and I think. I mean, honestly, the salesperson that you have is a rock star, right, Jeff? I mean, you're selling this amount of cars and doing everything. The guy.

The guy, he's running Stips and he's getting callbacks and he's collecting checks. I mean, that's.

I mean, he's. He's killing it. So we're not putting him down. What we're saying is.

No, how.

How can you get better? And how can he get better? I. You know, Jeff. And he would. He would probably sell more cars if he had somebody handling the back end for him. Or.

Or maybe he's really good at f and I.

Or he may be really good f and I, and he needs somebody else selling. That's right. So it sounds like you got the right guy. You just need another guy. And. And you need to, you know, we. You said that you're the buyer. And what I did for a long time, and I still do. I still buy most of my cars, but for forever, I was buying them, I was getting them ready, and I was selling them. And that is a hard. That's a hard deal. It's hard to do that when you're trying to raise a family, you're trying to grow your business in other areas. But, you know, sometimes you have to say, all right, I'm gonna. I'm gonna not sell anymore. I'm gonna hire the right people to sell, but I will still buy the cars and do the recon, because I can handle that. And it's selling 28 cars a month or 35 cars a month. You can handle that. You're not Doing any outside service work yet. So you've got two guys that are just hitting it all the time in recon. Well, you can, you can advise them on how to, how to get the cars ready, in my opinion. So I'm not sure that, that you need a service advisor right now.

What do you, what do you think of that, Brandon? Do you feel like your shop is busy enough that this service advisors advisor position is crucial, like a shop manager?

You know, there's, there's definitely times, certain weeks we do. I do feel that because we don't just do our work, we have outside customers that come in and also use our shop. You know, not that we advertise, but maybe people that we've sold vehicles to that do come back in. So there are weeks. Yes. That we are. That the shop slammed and there's no time for anything over there. But yeah, I am definitely with you. I definitely, I agree with you because I did do that for a little bit. I was running the shop and, and still over here buying, which it very easily can be done. It's not terrible. But yeah, I'm with you. I definitely think just some of the stuff we've already talked about definitely kind of is eye opening to hear two other professional dealers like yourselves be like, hey, these are what I think this is what I'm doing. And it makes, it makes total sense.

You know, well, hopefully this gives you cover, you know, and the whole point of this episode is to give you that back, that, that reassurance and backing you up to go have these conversations with these employees that may want to be in the shop. He may want to be a service writer, and that's why he kind of slid back into that position. And you say, no, no, no, no, I don't need you there. I need you out here doing this. Will you take the job? Here's the pay plan, you know.

Yeah.

And be careful when you look at those retail customers and Luke can maybe speak to this. Sometimes those retail customers aren't worth it. Right. What are you gonna make, 80 bucks on a ticket? 100 bucks on a ticket when you, when you do brakes, tires, and a diagnosis. Not worth it. Just be careful that you're not trying to chase that retail dollar unless you have a full machine that's operating. I would just, you know, be like, hey, we're not taking outside work until I get to this point, you know, until I can take that jump and be self sufficient.

I chased, I chased my tail on retail service work for a long time, and I didn't have everything ironed out yet. If you know, and there's, you know, I don't know what your warranty setup is, but that is, that is something you have to, to think about. You're not spending a ton on post. Post sale recon, so that, that's good. I think you can handle it on your own and maybe slim down some of that service work that, that you're doing and just focus on recon. And you might see that what we see a lot is that if we have a off month, it's because our recon had an off month. So what I'm saying by that is if, if for some reason we only got 25 cars ready in January, we will see that January sales will be slow. Or if we only got 25 ready in December, January sales will be slow. So I think that as long as you can push the machine and get your cars through recon with you handling it and at an even pace of 35 cars a month, you'll probably see that grow to 35 cars a month. Yeah.

And you got two techs. I mean, 28 cars to the front line with two techs is very doable, I think, in the price point that you're buying out. Unless you're doing some big builds, you know, for either from an engine or transmission or.

Yeah, yeah. I mean, we, we try to stay away from those, but unfortunately there's just times where you, you know, you kind of get thrown to the wolves on those things. But, you know. Yeah, I mean, I, I think, I think you're 100. Right. I truly do. I think that might be something to look at is maybe scaling down the shop in a sense, not taking the outside work. Because like you said. Yeah. Does it make sense? Sometimes these customers come in, it was in the shop all day and there's an 80 ticket. And I'm like, man, I had my tech tied up all day today. I made 80 bucks, man. Like, seriously.

So what did we make on this?

Yeah, yeah.

You know, I had a, I had a buddy of mine one time, and this is, you know, this is. So it's kind of the mindset of the, of the car dealer, but I was looking at doing something with a building right across the street from me and, and my friend who I had consulted on this, he's a big developer. And I said, man, this is what I want to do here, the way I want to do it. He said, well, how much are you thinking you're going to make a month doing this? And I said, probably, you know, 10, 12 grand. And he looked at me, he said, well, Luke, how many more cars do you need to sell to make 10 or $12,000 a month? And it dawned on me, yeah, I'm an idiot. You know, all I need to sell is three, maybe four more cars a month to hit that number. So why would I waste all my time over here? And same in the service department. If you're. If your service department is jamming and you're. You're killing it. Yeah. Take on extra work, but if you're not, don't. Don't sacrifice a couple cars sold a month to make that $80 a ticket that Jeff's talking about.

Yeah. So. So a couple other things, Brandon, to. To wrap this up and give you any other input that we have. I know that you've been at it seven years, Right. That's a. That's a. That's a just a battle. Right. I know how it is. I mean, I've been at it 15 years or something, and I am burnt out, and I get a lot of time. You know, my number one's great. There's days I don't want to be here. I get it. What I think you're at the point of is you are, from a retail standpoint, because you're a retail dealer. You are. In my opinion, you're. You're right on the precipice, but you're still. You're still stuck in the. You've kind of got to be there mode at 28 cars. That. That's my opinion. My thoughts. I mean, obviously that changes if you could get your grosses up, but that gives you a little more cash flow to pay people to be there and take more of the responsibilities that you're taking. But to really pull yourself away from the dealership. Yeah. You need to be functioning at a point where you can continue to buy cars at your leisure, but you don't have to be sitting there. Right. To run the shop. You could actually have a service manager be there. Right. So I think with a little bit of patience, but also knowing that, you know, don't get stuck in this no man's land where, like, okay, I'm. I'm small enough that I have to be here on Fridays and Saturdays, but I'm. And I'm not quite big enough where I can, like, pull myself away from a week or everything's going to fall apart.

So, yeah, yeah, I. I 100. I that. And I do. I feel that that's where I'm at. And I don't want to say that I'm getting burned out, because I truly love what I do. I mean, we. As a dealer, I mean. I mean, I don't know about you guys, but I. I truly love. I've been flipping cars and everything for years, and so I truly, truly enjoy this business. And I love being able to come in. I do love the people I work with. It's just like you said. Yeah, I feel like right now, you know, I'm stagnant, and that's where I'm just like, man, what is going on? You know, it's like I tell everybody, like, definition of insanity is doing the same thing over and over again, expecting different results. And I feel like that's what we've been doing these last couple years. So for me to what then? That's why that was another big thing for me this year. My wife and I was like, okay, what do we. What can we do different to get us past this hump, navigate through this time, make it hopefully, like they're saying, till second quarter of next year when stuff rates are starting to go back down and everything, and then start maybe getting back into that normal car market that they say we had, you know, five, six years ago. And let's just try to navigate right now what we have, and let's push through this so we can keep going. And then, yeah, I can take that time and step away and do the things that I want to be able to do with the family and. And, you know, trips and whatnot.

I. I think. I think, Jeff, you're right. One of. One of the hardest numbers to get to, I think, in car sales is 40. I. I've been there, and I'm still trying to get there. The problem is when you get stuck like Jeff's talking about, it's patience, you know, it's patience. It's doing the same thing over and over again the right way. And I think you're. I think you're trying to do that. 28 is a good number. You know, how can we make it 35? I think we've given you some. Some good suggestions. I think you're willing to. I think you're willing to get there to do it. So, man, just keep your head down. We all get burned out. Keep your head down and keep. Keep plugging along. I think you're going to make.

Hey, y', all, make sure you are getting your money. So if you are processing credit cards, with which all of us do, whether we're buy here, pay here, or retail, the guys at Blitzpay can get you a better rate, they can set you up on a better system if you're retail, they can link into your dms, they can get your down payments taken, they can give you killer processing rates. If you're buy here, pay here. That's where they really, really shine. I have been so impressed with the back end portal of their buy here pay here. We're transitioning right now over to Blitzpay. So this is going to be another one of those ones where I'm going to give you guys an update on once I'm fully integrated. But so far our customers have been very delighted with the Backend Wallet, the portal that the customer uses. So it's been really cool.

Yeah, it's, I've been on it for almost a year now, Jeff and I can tell you we're using it as a collection tool as well. It's really been a great switch for us and I just recommend it to everybody.

And it's tough right now for all dealers, guys, if ever. If you're listening, we are in, we are in a rally the troops economy right now. Right. So yes, maybe this year, this time last year, the year before, you were taking a couple vacations and you were checking out at 2 o' clock every single day. Right? That's not going to happen right now. Right. This is the buckle down because yes, you are getting hit from all sides. Interest rates, cost of cars, depreciating inventory very, very quickly, trying to get people bought. Your lenders are falling out. Your, your, your flooring line is freaking hitting you up every single day for an audit because they're freaking out. So yeah, we do need to rally the troops right now. And that'd be the other thing I'd say is if you can tighten your belt at home and maybe live with taking home a little bit less money or maybe you save some money during COVID and you've got a little nest egg. You may think about putting that back into the business, you know, and paying off some of those high interest debts that we all have. You know, do we need to pay off our credit card debt because that's killing us on interest. Do we need to maybe wean off our flooring line a little bit? If we took some of that money we socked away, you know, during COVID and we reinvest that back into the business. So that, that could be an idea. Right now is a good time to try to de risk yourself a little bit on some of those high interest.

For sure.

For sure.

Yeah.

Go ahead. Yeah.

No, I was going to say in closing with some of these other things, you know, Brandon, prioritize those. Those things in your dealership that are, you know, we all want to do everything, you know, and you kind of mentioned some of your goals of having a profitable service center and getting your grosses up and getting off your flooring line and being able to step away from the business a little bit. Put those in order of priority. Right. Because, yeah, you can't do them all right now. You're not going to do them all in 2024. But what is the most important thing, you know, for me, and my opinion to you would just be to increase your grosses, you know, and I think.

That'Ll come if he makes some changes in his sales and finance department. There's no doubt. Right, Jeff? The gross is going to go up. And I think, you know, what we saw before COVID I think, was that front and back end gross on retail cars anywhere from 24 to $3,000. And I think if you get there, you'll see. I think you make a couple of changes, you're going to get there pretty quickly and you'll see a real difference in your bottom line.

Yeah, I definitely think that's a lot of stuff that I need to work on, but I definitely. I agree with you. 100. That's where, you know, it probably took you guys telling me, yeah, you need a sales guy. I mean, really, that's. That's where it's at now. Now it's just that thing, okay, how do I pay that guy? How can I afford to pay that guy? You know, looking at some of the numbers that I have here, I'm like, can I afford to have that sales guy? But like you said, if I've got that sales guy here and my finance manager is doing what he's supposed to be, only finance. Yeah. It makes, it makes all the sense in the world. I can get that back in product. He can push that back in product. You can, you know, we can maybe try to help have a good salesman to sell over some of these things. Maybe something might need some tires and try to teach those guys and learn, you know, and have them learn how to sell above or over certain things that vehicles might have. That. That would be their job. So I definitely think that, you know, going forward, for sure, it's definitely something. I'm gonna have to sit with the crew and talk to them and probably 100. Put a sales guy in here.

Yeah. And train. You know, we didn't even Talk about that. But you, you just brought that up. You got to train yourselves men to sell. And, and there's plenty of good training out there. I always go back to Joe Verde. It's old, but it works. And look at that. Train your sales people, train them to overcome obstacles, train them to close. And you know, you close on things that, that aren't about money and your grosses will go up to.

Yeah.

Brandon, anything else? Any other questions or maybe like things we didn't touch on or fully flesh out in the last couple of minutes we got with you?

No, I think while you look at.

That, my opinion would be when you say bring in a salesman, I again, I think reorganize, get people in the right seats on the bus. I think seven full time employees is probably plenty. If you take two of those or tax, take those out. Five full time employees on the front end of your dealership to sell 30 cars a month, get to 40 cars a month. I think, I think it's maybe a little bit of a rearranging. And you know what we mean by your number one guy, you know, he should be the number one guy bringing in those checks and salesmen are a profit expense. Right. They will pay for themselves as opposed to bringing on a porter or a social media person or a title clerk. Those are kind of straight expenses. So just be cautious when you're like, well, can I afford it? Well, you can't afford not to have a dedicated salesman. Right. And they will pay for themselves, especially when you set up the right pay plan.

Yep.

Yeah. What about what, what would your, real quick, what would your opinion be on like sitting your employees down and kind of explaining to them, you know, not getting into depth on numbers or whatnot with them. But you know, do you, do you sit them down and say, hey, look, we need to make a certain amount every month in order for this work. Do you, do you like how vulnerable, I guess, do you get with your employees? I guess, if that makes sense.

I mean, that's a, that's a great question. And there's two, two trains of thought. You have to involve everybody in that conversation. Maybe not. I would definitely have that conversation with my salesperson, my finance manager as well, because they're the ones that are going to make you the profit. But you've got to be, I mean, vulnerable is the right word, I think is, it's, hey guys, this is, this is what's going on. You know, we need to get here. These are our goals. You need to explain their goals. You need to Sit them down and say, how are we going to get to our goals this week? And it's. That's pretty simple. But if you have the goals in place and you require them or hold them to those goals, and you also on your side are living up to that, then there's no reason not to sit those guys down and explain to them the situation you're in. Because they're. They're going to appreciate that. Because if they're in the. They're essentially in the same situation. If, you know, if you don't make any more money, they're not gonna make any more money. And I promise you, they're going to want to make more money. So sit down, talk to them.

And I. I would give you the advice maybe from the same angle, but a little bit different philosophy is I probably wouldn't sit them down and say, hey, guys, this is what we have to make to keep the doors open.

Yeah.

You know, and if we don't, the doors ain't open. I would almost approach it from, hey, guys, here's where we sit today. Here's where we want to be. I think let's have a goal and let's strive for that goal. Because we're trying to get better. Every single day, every single month, we're trying to achieve better. Here's our average gross back end. We need to get that back into this by the end of the month. Okay. And we're all going to fight to do it. And maybe here's some incentive plan to get us there. Right. Or. Yeah, here's a structure on to get our grosses up. We need to get these grosses to here. So, yes, as a sharing with them the numbers in a way of motivating them to. What is your next goal? What is your next level? That should be front and center. That should be painted on the wall in big old block letters. Here's where we're at. Here's where we need to be next month, next quarter. Yeah, absolutely. Because if you're not sharing those goals and they don't know, they think they're doing just fine.

Yeah. I mean, this guy, this guy selling 28 cars a month, he's actually killing it. He is actually killing it. Okay. What he doesn't understand that selling 28 cars at a lower gross is not working. Maybe. Maybe not the best thing. So, yeah, his goal may be to sell more cars, but not to make more gross. So make sure you have that conversation with you, and I think your gross will go up.

Yeah.

Especially if he's only paid on the quantity of the cars he sells and not paid on the grosses that he makes. So, yeah, definitely revisit the pay plans and make sure your employees incentive. This is my opinion. Luke runs a different philosophy on pay plans, but that your employee incentives are lined up with your incentives. Right. Because those will always, they'll always find a way to work the pay plan. So make sure the pay plan works for the dealership. Right?

Yeah, yeah, it makes a lot of sense, guys. I mean, seriously, I, I, I cannot thank you enough at all to have me on here and just to take this advice from you. And I will tell you too, we have, we did go to podium. Podium's been an absolute game changer for us. It's been really, really good. So that is an amazing thing also to that we, that we got going here. So like I said, we've taken a lot of stuff you guys have said and we've tried to implement it, but I'm going to take a lot of this right now and definitely look like I got some really good changes coming up this year. Like I said, I just honestly got. Guys, I cannot thank you enough to be able to sit with you and, and go over this stuff. And I hope, you know, moving forward on the podcast with you guys, you know, that other dealers like myself see this, you know, or listen to this because, you know, it's, there's a lot of guys you have on here that are just killing it. I mean, big, huge stores, multiple stores selling, you know, 150, 200, 300 cars a month. And the little guys like me and, and to have other smaller guys like me listen to this. I really hope it's going to help the whole industry in a whole, you know, so like I said, I thank you guys so much for what you do every week. And like I said, I look forward hopefully one of these days to be back on here with you and go over all this stuff and kind of let you know what happened. But like I said, just the stuff I got from you today, I, I really like, it's, it's eye opening and it's very humble to sit with, with other, you know, professional dealers and to, to see this. So I, I really appreciate you guys and all the info you've given us.

We are definitely going to follow up with you, Brandon. We're going to hold you to this. And obviously some of these things we gave you, if you need help flushing them out, like your pay plans, your, your structure, those reach back out to us, right? We're going to still talk about this because some of that stuff, it's hard, man. We don't expect you to reinvent the wheel. And if we don't have the answers, we'll find someone that does. So when you start putting pen to paper, give us a holler, okay?

I will, man. Thank you guys so, so much. I really appreciate it.

Thank you for listening.

Please leave us a review. Thank you. We'll catch you in the next episode.

Cool.

Thanks, bro. That's fun.

Yeah, that was really cool, guys. Like I said, I thank you guys so much. And I mean, yeah, it's just nice to hear. I mean, God, you know, just the notes I took down, it's like it all makes perfect sense, you know, it really does. Just to be able to hear you guys opinion on this and it's like, what am I thinking? You know? Yeah. You know, so it's.

Well, stay. Keep that fire. Keep that fire going. I think you, man, you'll be fine. 28 cars, mothers, nothing to sneeze at. You just gotta, gotta iron out a little bit of those details. You'll. You'll be fine.

I think you said Dakota, Mickey and Noah down and you decide who's going to be the F and I manager and who's going to be the two salesmen. And then we can have some other little side projects and side jobs. But if those are your three go to people. Yeah, those three have got to be producing like full time job producing for you.

So like real quick, I know you guys probably got busy. So real quick, I have like. So the way Dakota's paid 15 of gross on what we gross on that vehicle. So if I grow say 5 grand, he's getting 15 of gross on that. So as an F and I guy, do I either him or Noah say, hey, you're gonna get this percentage and then you hit a certain number, you get a bonus. Is that something that I should be throwing in there or do you think I just do it as a straight percentage rate that he gets?

For an F and I guy?

Yeah, F and I. And then sales guy. Yeah, F and I are sales.

I would split the two. I would make sales one responsibility. And they get a percentage of gross, right? That's their job. Sell a car, hold the gross. The F and I guy gets paid maybe per deal and then a good percentage of the back end. You know, he gets a pretty hefty percentage of any back end product because that's huge, man. If he can get that from 200 bucks up to a thousand, where it should be. Or 15, probably, which is more the industry standard. Yeah, you should be getting 40% of that or something. I don't know.

I think that's probably in the 30%. I would, I would.

Yeah. 30%, your standard number. But get him there now and then. I don't know, man. I just think you gotta, you gotta get that number.

Yeah, it needs to go up and I think a lot of it too is like I was saying before we went on air. Is that it? Oh, gosh darn, man. It's just. We get these stupid out the door calls on these cars and there's no room for back end product. And so it's. It's hard for him to sell them and it's.

He's got to find more lenders. There's lenders out there. People are doing it. Yeah, he's gotta, he's gotta expand that lender pool, man. He's going to the same one every day. And these guys are just cutting your legs.

Yeah. And you need to be working on getting more lenders as well. Try to get signed up with of.

The bigger lenders around, like more national lender type thing or.

Yeah, yep.

Yeah. Or even regional subprimes, you know, the, the whatevers that are. Yeah, there's some that. They all go through different phases of aggressiveness. Right. They grow, they give you better callbacks. All of a sudden they get scared, they cut back.

Yeah, yeah.

You just can never have too many.

Yeah, that's one thing we talked about this year is we definitely need to get more, more banks involved. We do, we do have two subprime lenders that we do use and they're. I mean. Yeah, they're tough. I mean, these discount deals are, you know, geez, sometimes they charge us 700 bucks to get the deal financed, you know, and it's just. Yeah, it's, it's. Banks are tough and I definitely think I'm going to start pounding pavement more. Do you have any recommendations of some national lenders that I should jump out to right away that, you know, might take people on or.

Jeff, that's more on your.

Yeah, I mean, as far as like this, the sub times and do you reach out to like Lobel and. Gosh, a lot of. It's going to be regional. I don't know how you get to the point of getting a ally or a chase or a Bank of America or. I mean, those guys are like. Yeah, relationship hunting. I would start those.

I would start. I would start with ally immediately. I would try to I would try to get with them. I would probably try to. You know, Cap One is Capital One. Big out there, Jeff or no.

Yeah. I mean, and you just. You call them every week for the next 12 months, you know.

Yeah.

And eventually you get the guy in the right mood at the right time. But you've got seven years of financials, so.

Yeah, I think you. I think you've got. I think you got the numbers. I think you just got to hit them up. And I mean, you. You can. Travis Santander. I mean, you can try. I would. I would definitely be trying with them.

I gotta jump into this next meeting.

Yeah.

Okay.

Sorry, I got my team waiting. But, Brent, let's follow up with some emails.

Yep.

Yeah. Thank you guys so much. I appreciate everything. Thank you.

Thanks, man. See you.

Yeah. But talk to you soon. Bye. Bye.