The car business. BAH!

[Jesda]

For years I've been wanting to start a second business, so I did. I formed an LLC and I buy and sell cars that pique my interest.

Sure, I could be swallowing up every Chevy Cobalt on the market and slinging them out with high-interest loan programs to desperate borrowers, but I don't really want to do that or deal with the paperwork. Financing is hard work and I wouldn't take pride in what I did.

So, I look for nice luxury sedans, luxury SUVs, and popular sports cars (Miatas) to sell to primarily cash buyers. We're in a location that's off the beaten path but super cheap (and shared with another dealer) so that prices can stay low while having enough in profit to keep the lights on.

Unfortunately, some customers on eBay receive their with imperfections, sometimes caked in dirt from the shipper or with minor mechanical issues that I really wasn't aware of. Doesn't stop a couple of them from accusing me of ripping them off which in turn kind of makes it hard to sleep. I take that sh*t personally.


As a result, I stock up on this:



Sure, I sell vehicles as-is but if you value your reputation you fix whatever needs fixing until the customer is reasonably happy. It's hard to set expectations on complex mechanical instruments. Then I have a partner who likes to buy fancy s***, none of which we've made money on. A 2010 X5, 2008 Escalade, and now a Cayenne. The Cayenne is actually a decent buy but needs repairs. Maybe that will make up for the thousands lost on those two other transactions. Meanwhile, it's TYING UP CAPITAL and putting a squeeze on funds I was intending to use to buy a couple Miatas. With tax season around the corner I wanted to stock up on clean cars under $5000 that people can walk in and pay cash for. Meanwhile, we have a couple turds (that I was against buying!) tying up another 20 grand.

I keep the books. I handle sales. I come up with the strategy, but none of it matters if my partner KEEPS BRINGING BACK HIGH-END CRAP.


Had a hearty shouting match last night about work ethic, being conservative with capital resources, calculated risk vs gamb|ing, and sticking to long term strategy.


I've made something like 20 cents an hour this year and I'm about to quit. Maybe I should open a car wash instead.


Kill me now.

[elwesso]

I would suggest opening a bar at your car dealership. Get them all liquored up and then convince people to spend the money, it's guaranteed to work.

[Bubba1]

The car wash biz is not without it's own set of challenges, like the weather. And the same customers that complain about problems on as-is sales, will try to squeeze you if it rains/snows within a day of the washing or claims that something was damaged or missed during the wash. Then there's the dependability of labor.

FWIW, I agree with your strategy, but it sounds like you have a real philosophical difference with your partner. That's tough. Do you guys have a time limit as to how long you'll let a vehicle sit on the lot before returning it to auction?

[leesredgt]

Can you not go out on your own and start your own company?

[Jesda]

Can you not go out on your own and start your own company?

Sure, but then there's less capital to work with unless I borrow.

Partnership has its advantages and so many headaches.

[Rex]

Buy low/sell high, targeting cash purchase price ranges. Don't worry about anything else.

If I could make money being in either the car or golf industry, I'd never work another day in my life.

I hope you're taking the opportunity to do in-depth retro-reviews on all the cars you're buying ... heck someone may read your review and decide the car you have for sale is a good used car candidate.

Good luck!

Whatever happened to the book business?

[Jesda]

Whatever happened to the book business?

Down a bit this year but I think that's due to the economic recovery. During the recession people were going back to school in droves and buying up books like crazy. I blew a lot of it on car stuff and road trips but it was totally worth it.

Grad school is probably the next step if this whole dealership thing leaves a steaming turd on my carpet.

[Dattebayo]

If your partner cannot see that you are running a business (as in an entity created to make profit) than you're better off dissolving your partnership.

[nissangirl74]

It sucks when you're not on the same page but the writing is on the wall. The less expensive cars sell quicker with a greater profit margin. The more expensive stuff sits. The less expensive cars also tend to be less hassle to drive and maintain. Trying to live a champagne lifestyle on a beer budget never ends well, usually on bad terms or in debt. Don't burn any bridges but it might be a good time to start thinking about that MBA.

[krash]

That sucks man

Have you looked into youtube? I've seen some of your videos describing the cars you have for sale. You have a good voice/way of talking to keep viewers engaged. Do a review or something when you get an interesting car in the inventory. Set up an adsense account and you'll be making money from youtube and advertising for your used car business at the same time. You're not going to make like thousands every month, but an extra $100-$200 a month is more than possible and I assume that will loosen the belt a little bit.

[MinisterofDOOM]

I don't think I could ever work in any kind of retail field, simply because customers have become so entitled. Selling vehicles is particularly unappealing because of the low profit margin and high investment cost. With used vehicles you add questionable product history to the mix and it's just not appealing in the least. You're going to get upset customers who are incapable of reasoning and it's going to hurt either your bottom line or your reputation (or both).

I can't imagine being a used car salesman. You have to either not care about your personal reputation or put your profit margin on the line just to keep your buyers happy.

[elwesso]

One thing I've learned on my rather short time on this earth is that it's usually not a good idea to mix your hobbies and work. At least for me anyway. Example would be when I was younger, I worked at a golf course. I love golf, and loved golf back in those days too, but there were a lot of times I didn't want to be around a golf course because of all the douchey members that would get plowed out on the golf course and stay out forever.

I think perhaps the same thing is happening with these cars. It really sucks to try and make your livelihood depend on something that you really love, and it doesn't work out as well. I'm sure you like the cars you have, but you're finding that people aren't stupid enough to own them.

Have you considered branching out into something you're less familiar with..... Marine industry, heavy machinery, industrial machinery, etc? IMO, selling brand new equipment is a lot better than used stuff, because you have a lot more control over ensuring the customer gets what they need.

[Heavy]

Have you considered branching out into something you're less familiar with..... Marine industry, heavy machinery, industrial machinery, etc? IMO, selling brand new equipment is a lot better than used stuff, because you have a lot more control over ensuring the customer gets what they need.

yes because somebody really wants to buy a bulldozer from a guy wearing argyle.... "deal of the day! buy 1 cat bulldozer and get a free box of merlot!"

[Kompresshun]

Wes makes a great point. I experienced something similar back when I worked in auto parts and sold cars. I have loved cars all of my life - my dad had me in the garage with him turning wrenches at 5 and ever since I have lived, breathed, and slept cars.

I lost a lot of my interest and passion for them during the time I worked in auto parts and as a salesman tough. Working in those environments really burned me out and I got where I hated having any projects or wrenching on anything.

I hated selling cars every single day I was there, because it was just an exhausting experience. I worked 50 hours a week, the sales staff was sleazy, and there was a lot of pressure to make sales. Enough that they wanted me to lie to customers about mechanical problems in the vehicles.

I sold auto parts for 7 years and was darn good at it. I made good money, but the customers were mostly inconsiderate pricks that wanted you to find parts for their POS AND tell them exactly how to fix it. Then when they broke the part, they'd bring it back covered in grease and destroyed, for a refund saying it didn't fit. Then they'd get pissed when you pointed out the obvious, throw s*** at you and raise hell. Also sometimes calling the district manager to get their way, usually getting their way and making the store managers look like powerless idiots. That's just scratching the surface, but retail in general is a crappy field to try to succeed and be happy in.

Once I moved away from those and over to dealership Service and parts departments away from the automotive field, I finally found some happiness in my career and I realized that I needed that separation from my interests. The two best jobs I've had to date have been working for a Kenworth dealership and my current job at a Yale forklift dealer. Both places are far enough away from my interests, but have a common ground that I can apply my automotive knowledge to my benefit.

So for me the best thing was to get involved in diesel or industrial equipment. Both fields share a lot a common knowledge with the automotive world, but are less demanding because you're dealing with much less consumers and DIY people. Instead you're dealing with more commercial customers and fleet accounts. They usually know what they need or at least have a general idea. Even in sales you're typically selling to a fleet or a large company most of the time. They know what product they need, what they need it to do, and how much of it they need.

In short - Get away from car sales. It won't get any less frustrating.

[skydragoness]

Totally agree with you Kompresshun, I work in parts but at a dealership and it's okay most of the time. Retail customers are pretty rare so we mostly deal with independent shops and collision centers which have their ***holes but generally know they are at our mercy (only two dealers in the state and the other one has a very horrid customer service record). I like it though and it's million times better than being a service writer or a sales person IMHO. Regardless, it's a stepping stone and I think the automotive realm isn't for me.

Jesda: Is this who I think it is? If so, that's a shame.
It's probably best for your sanity to wrap it up and move on.

[Jesda]

I would suggest opening a bar at your car dealership. Get them all liquored up and then convince people to spend the money, it's guaranteed to work.

I might consume all of the inventory.

[elwesso]

Even if you do, you're bound to be more convincing to people while plowed.

I would suggest opening a bar at your car dealership. Get them all liquored up and then convince people to spend the money, it's guaranteed to work.

I might consume all of the inventory.