Beepi and Vroom and Carvana - will they make a DENT?

[joe.pistell]

David,

I agree with many your observations and conclusions, but, your conclusions about new ideas seen today are always rooted in yesterday. 99.9% of all new ideas don't make a profit until they cross into 'critical mass'. I'd like to hear your thoughts on why or how a startup can work.


P.s. The graph I posted wasn't intended to be personal, so, to keep this a discussion of ideas, I deleted it.

 

[Cullen C]

@r

RE: "Unlike @ruggles I won't pretend to intimately know how well Beepi is currently performing financially."

I have no idea how Beepi is performing financially. My comments only address its business model as I understand it. I quick back of the envelope calc tells me they probably aren't doing well, and won't do well in the future unless they change their business model. The current model seems based on a few invalid assumptions. Certainly the market will sort things out in time. As Ed Brooks points out, there can be temporary disruption while a start up based on false assumptions, funded by masses of speculative capital, fails.

I don't doubt that Carvana is a very metric driven company. I found Ernie Garcia Jr. to be mostly brilliant, although his pace of communication doesn't allow for one to weight his comments before he's so far down the road you forgot what he previously said. At the end of the presentation, most people were wowed, but didn't exactly know what he said.

I'm not sure what "results you have experienced in Atlanta" you refer to. It is no feat to sell volume at little or no margin. People do that every day without claiming to be "disruptive." Like I said in a previous post, "The idea that you can make up low margin with volume has been unsuccessfully attempted many times in the auto business." I've operated dealerships where all we had to do was change the word "fleet" to "unit sales" and suddenly the volumes look really large. During that time period, the largest Chevy dealer in the world went bust selling 38K new units a year. That's one dealer, one location, 38,000 new units. Most of the vehicles never landed at the dealership and were drop shipped. Sound familiar? They were going to make up the low margins in volume.

We live in an era where the cost of capital is really low. What happens when interest rates return to a more historical norm? You'll need some margin to absorb that, OR you'll have to pass it on to your customers.

@ruggles I hope you can appreciate there is a delicate yet necessary balance to discussing performance and sharing information that is better left for internal dialogue. This is a great platform to discuss current trends and to weigh in on industry topics but it isn't the right forum to divulge every financial detail, especially when discussing startups.

In reading some of your thoughts in the post above I struggle to understand how any of it matters to what is happening today. Giving me an example of changing verbiage at a Chevy store that I can only imagine was over 20 years ago hardly seems relevant. I do not want to make this personal. I have no doubt that you have tremendous industry knowledge and your experiences in many cases are invaluable. I do think however in respect to what is happening in the used car space your experience may be a hindrance.

I could not agree with you more that Ernie's pace of thought is typically one or two gears ahead of most. In having witnessed it up close several times I would tell you to first, trust that it is genuine and second, drink plenty of coffee.

As usual I appreciate @Ed Brooks perspective. The mention of CarMax and their ability to ask a premium for what is essentially an identical product as most dealers is a good one. There is a reason why every Apple store in every mall has a waiting list while you can buy the product in any Best Buy across the country. People will pay more for a special experience. They will also do so for convenience. Imagine a place where both intersect. I get that we may not be able to find common ground on how this will play out. I would hope that before you write us off you at least look at a perspective that brought us here in the first place. The consumer.

https://www.carvana.com/reviews

 

[ruggles]

RE: "I hope you can appreciate there is a delicate yet necessary balance to discussing performance and sharing information that is better left for internal dialogue."

Unless you are claiming transparency and making claims based on selecting what you think looks best while failing to mention information that might provide REAL perspective, I would agree with you. Claims of happy customers and volume numbers need to be put in the context of ALL the information. Otherwise, one might think you are trying to deceive.

RE: "This is a great platform to discuss current trends and to weigh in on industry topics but it isn't the right forum to divulge every financial detail, especially when discussing startups."

And I'm not in as big of a hurry to pronounce something is a trend until it has shown some sustainability. Sustainability includes a profit history. I have repeatedly pointed out that it is easy to raise money for a start up, if you know what buttons to push. I've been going to automotive conferences for decades, and reading and writing about the industry. I long since lost track of most of the sponsors that have come and gone.
RE: "In reading some of your thoughts in the post above I struggle to understand how any of it matters to what is happening today."

I'll try not to hold your youth and experience against you, to steal a phrase from Ronald Reagan.

RE: "Giving me an example of changing verbiage at a Chevy store that I can only imagine was over 20 years ago hardly seems relevant."

You think 20 years is a long time? I guess only the things you've experienced in YOUR life are relevant. But I'll share something with you. The psychology that drives consumers hasn't changed. The idea that consumers today KNOW more than they did in previous decades, is a common theme. But they don't. They have more information. Having information, and being able to unpack it, are two different things.

RE: "I do not want to make this personal. I have no doubt that you have tremendous industry knowledge and your experiences in many cases are invaluable. I do think however in respect to what is happening in the used car space your experience may be a hindrance."

I think your inexperience is a hindrance. You become a kool aid drinker because its easy to be a kool aid drinker. You lack historical perspective.

RE: "I could not agree with you more that Ernie's pace of thought is typically one or two gears ahead of most."

He forgets that what he is saying has been rehearsed and role played in his mind for a long time while the people he is talking to are hearing most of it for the first time.

RE: "In having witnessed it up close several times I would tell you to first, trust that it is genuine and second, drink plenty of coffee."

I trust that he is genuine AND very bright. But really bright people can have gaping holes in their logic for a variety of reasons.

RE: "As usual I appreciate @Ed Brooks perspective."

As do I. We agree on most things political, most things in economics, most things that pertain to the pre-owned business, and virtually nothing as it regards the new car business. I was one of the first to write praises of vAuto and Dale Pollaks first book. I did a book review about 6 years ago. Reflecting back, I should have mentioned that when Dale discussed efficient markets he should have continued it on to its inevitable conclusion. Efficient markets lead to disintermediation, which is the elimination of the middle man. I'm not sure someone who depends on dealers for revenue should be touting an efficient market in auto sales. Regardless, his observations of changes the Internet has imposed on the pre-owned market were spot on then, as they are now. Where Dale and vAuto got off track was making the assumption that dealers should attempt to do the same thing on new inventory as they do on pre-owned. And that's where Ed and I disagree. Its like vAuto is trying to throw fire on the pissing contest between dealers where only vAuto wins.

RE: "The mention of CarMax and their ability to ask a premium for what is essentially an identical product as most dealers is a good one."

Sure, as long as the discussion includes proper context. For example, not commonly known is that CarMAx doesn't charge itself retail for recon. I don't think they even mark it up. BTW, Dale Pollak and I are in complete agreement about the stupidity of retail recon. Doing it at cost is stupid too. The formula in use 30 years ago works best today and provides the proper balance in allocation of cost and revenue.

RE: "There is a reason why every Apple store in every mall has a waiting list while you can buy the product in any Best Buy across the country."

This is a complete non sequitur to auto retail.

RE: "People will pay more for a special experience." Some will. The question is whether or not focusing a business plan on that relatively small percentage is sustainable. In auto retail, how do you define a special experience? If you think the discussion of what consumers think is a special experience is a new one, its not. Is a special experience related to One Price? DO you think the haggle is a detriment? If so, do you think that is new?

RE: "They will also do so for convenience. Imagine a place where both intersect."

When you find it in auto retail in a sustainable way, please tell me about it. I'm not talking about anecdotes. Until Carvana is shown to be successful, and that includes sustainable profit, it is an anecdote. I can give you plenty of anecdotal failures that were well financed. You can also watch the slow train wreck known as TrueCar if you need some reinforcement.

BTW, you will probably see TC take a little stock price bounce in the next couple of weeks, before it settles back down. Don't fall for the fools gold, but it might make for a little in and out stock play.

RE: "I get that we may not be able to find common ground on how this will play out."

Can you prove that my Grandmother isn't in orbit around Mars?

RE: "I would hope that before you write us off you at least look at a perspective that brought us here in the first place. The consumer."

I've been studying auto buying consumers for 45 years. I know the difference between how the answer survey questions and how they behave in the real world. I started selling cars in a One Price store 45 years ago. I am also familiar with the legal ramifications of One Price/No Haggle. Are you?

http://www.autodealermonthly.com/article/story/2014/05/no-haggle-no-problem-or-not.aspx

At some point I'd like to see auto retail conducting workshops for Apple and Disney employees so they can learn the challenges of selling cars to people with trade ins with negative equity, less than stellar credit, edgy DTI, wild expectations on price and trade value based on their inability to unpack all of the information they get from the Web, make gross profit in a competitive environment, and get a decent CSI survey. TRying to make a comparison between big ticket items and gadgets is a complete non sequitur.

 

[ruggles]

RE: "I hope you can appreciate there is a delicate yet necessary balance to discussing performance and sharing information that is better left for internal dialogue."

Unless you are claiming transparency and making claims based on selecting what you think looks best while failing to mention information that might provide REAL perspective, I would agree with you. Claims of happy customers and volume numbers need to be put in the context of ALL the information. Otherwise, one might think you are trying to deceive.

RE: "This is a great platform to discuss current trends and to weigh in on industry topics but it isn't the right forum to divulge every financial detail, especially when discussing startups."

And I'm not in as big of a hurry to pronounce something is a trend until it has shown some sustainability. Sustainability includes a profit history. I have repeatedly pointed out that it is easy to raise money for a start up, if you know what buttons to push. I've been going to automotive conferences for decades, and reading and writing about the industry. I long since lost track of most of the sponsors that have come and gone.
RE: "In reading some of your thoughts in the post above I struggle to understand how any of it matters to what is happening today."

I'll try not to hold your youth and experience against you, to steal a phrase from Ronald Reagan.

RE: "Giving me an example of changing verbiage at a Chevy store that I can only imagine was over 20 years ago hardly seems relevant."

You think 20 years is a long time? I guess only the things you've experienced in YOUR life are relevant. But I'll share something with you. The psychology that drives consumers hasn't changed. The idea that consumers today KNOW more than they did in previous decades, is a common theme. But they don't. They have more information. Having information, and being able to unpack it, are two different things.

RE: "I do not want to make this personal. I have no doubt that you have tremendous industry knowledge and your experiences in many cases are invaluable. I do think however in respect to what is happening in the used car space your experience may be a hindrance."

I think your inexperience is a hindrance. You become a kool aid drinker because its easy to be a kool aid drinker. You lack historical perspective.

RE: "I could not agree with you more that Ernie's pace of thought is typically one or two gears ahead of most."

He forgets that what he is saying has been rehearsed and role played in his mind for a long time while the people he is talking to are hearing most of it for the first time.

RE: "In having witnessed it up close several times I would tell you to first, trust that it is genuine and second, drink plenty of coffee."

I trust that he is genuine AND very bright. But really bright people can have gaping holes in their logic for a variety of reasons.

RE: "As usual I appreciate @Ed Brooks perspective."

As do I. We agree on most things political, most things in economics, most things that pertain to the pre-owned business, and virtually nothing as it regards the new car business. I was one of the first to write praises of vAuto and Dale Pollaks first book. I did a book review about 6 years ago. Reflecting back, I should have mentioned that when Dale discussed efficient markets he should have continued it on to its inevitable conclusion. Efficient markets lead to disintermediation, which is the elimination of the middle man. I'm not sure someone who depends on dealers for revenue should be touting an efficient market in auto sales. Regardless, his observations of changes the Internet has imposed on the pre-owned market were spot on then, as they are now. Where Dale and vAuto got off track was making the assumption that dealers should attempt to do the same thing on new inventory as they do on pre-owned. And that's where Ed and I disagree. Its like vAuto is trying to throw fire on the pissing contest between dealers where only vAuto wins.

RE: "The mention of CarMax and their ability to ask a premium for what is essentially an identical product as most dealers is a good one."

Sure, as long as the discussion includes proper context. For example, not commonly known is that CarMAx doesn't charge itself retail for recon. I don't think they even mark it up. BTW, Dale Pollak and I are in complete agreement about the stupidity of retail recon. Doing it at cost is stupid too. The formula in use 30 years ago works best today and provides the proper balance in allocation of cost and revenue.

RE: "There is a reason why every Apple store in every mall has a waiting list while you can buy the product in any Best Buy across the country."

This is a complete non sequitur to auto retail.

RE: "People will pay more for a special experience." Some will. The question is whether or not focusing a business plan on that relatively small percentage is sustainable. In auto retail, how do you define a special experience? If you think the discussion of what consumers think is a special experience is a new one, its not. Is a special experience related to One Price? DO you think the haggle is a detriment? If so, do you think that is new?

RE: "They will also do so for convenience. Imagine a place where both intersect."

When you find it in auto retail in a sustainable way, please tell me about it. I'm not talking about anecdotes. Until Carvana is shown to be successful, and that includes sustainable profit, it is an anecdote. I can give you plenty of anecdotal failures that were well financed. You can also watch the slow train wreck known as TrueCar if you need some reinforcement.

BTW, you will probably see TC take a little stock price bounce in the next couple of weeks, before it settles back down. Don't fall for the fools gold, but it might make for a little in and out stock play.

RE: "I get that we may not be able to find common ground on how this will play out."

Can you prove that my Grandmother isn't in orbit around Mars?

RE: "I would hope that before you write us off you at least look at a perspective that brought us here in the first place. The consumer."

I've been studying auto buying consumers for 45 years. I know the difference between how the answer survey questions and how they behave in the real world. I started selling cars in a One Price store 45 years ago. I am also familiar with the legal ramifications of One Price/No Haggle. Are you?

http://www.autodealermonthly.com/article/story/2014/05/no-haggle-no-problem-or-not.aspx

At some point I'd like to see auto retail conducting workshops for Apple and Disney employees so they can learn the challenges of selling cars to people with trade ins with negative equity, less than stellar credit, edgy DTI, wild expectations on price and trade value based on their inability to unpack all of the information they get from the Web, make gross profit in a competitive environment, and get a decent CSI survey. Trying to make a comparison between big ticket items and gadgets is a complete non sequitur.

 

[ruggles]

David,

I agree with many your observations and conclusions, but, your conclusions about new ideas seen today are always rooted in yesterday. 99.9% of all new ideas don't make a profit until they cross into 'critical mass'. I'd like to hear your thoughts on why or how a startup can work.


P.s. The graph I posted wasn't intended to be personal, so, to keep this a discussion of ideas, I deleted it.

If you don't know where you've been, how can you know where you're going?

My conclusions about new ideas are fairly simple. If the concept is based on reality, and it shows sustainability, there is probably something there. Would you care to guess how many auto industry startups fail versus how may succeed? I have no idea what the exact numbers are, but I've been around long enough to see MANY come and go. Every now and then I watch the video I took at the 1992 NADA convention. The floor was packed. The next year, most weren't there and weren't even in business. As a dealer, I've listened to hundreds of sales pitches that included the line, "All you have to do is sell one more car a month to pay for this new gadget." AND I've been on the other side of the desk selling the new gadget. I've sold software products that were never used. In other instances, I've sold software products that were used to perhaps 25% of the capability, while in other cases, the dealer just killed it.

Part of what I do in life is vet new companies, not always in the automotive space. I've also been known to invest in ones I think are good investments. Some might be good short term investments based on a quick in and out. Others might have long term legs. I owe it to myself and to the people I advise not to chase fools gold. Don't think I haven't bought a few clunkers myself. When you're using your own money, and that of people close to you, it adds valuable perspective.

For the record, I wouldn't put a dime in Beepi or TRED. I might consider Cavana, but that investment would have to compete with everyplace else a person could invest money. It isn't going to revolutionize or disrupt anything. Anyone can sell nice cars for low margin.

 

[ruggles]

RE: "It seems whenever a store is mentioned where negotiation is eliminated or dramatically reduced, Ruggles automatically assumes that they are giving cars away."

I assume that a lot of gross profit is given away when it isn't asked for, and a lot of business is also left when the difficult customers are sent down the road. You seem to think that one has to be one way or the other. If you learn how to be artful in what you do, you can take more shots at gross profit and take all the cheap deals that often turn out to be fat ones. But your average is going to suck if you take cheap deals without fat ones to average in. Further, if you claim One Price/No Haggle, then don't follow through, you'll be a target for a class action lawsuit. You can write Tom Hudson off as a know nothing attorney if you like. He's the finest legal mind in our business in my view.

http://www.autodealermonthly.com/article/story/2014/05/no-haggle-no-problem-or-not.aspx

RE: "From my experience, this is far from the truth."

You can torture the numbers to get them to say what you want, but the numbers just don't hold up. But then, you're the guy who thinks you have to give up both ends to get the center. I really don't know what logic drove you to that conclusion. If you assume every consumer has visited the web and knows everything, you'll drop your drawers quick. 45 years ago sales people came to the desk saying, "Boss, my customer has the book with the invoice prices in it. AND he's been to his credit union. We gotta get real quick with this guy or I'm gonna lose him." Maybe you should learn artful negotiation first before trying to get every dealer to drop prices on new vehicle inventory ACROSS THE BOARD. I want to make a distinction here between price leader advertising and "across the board."

RE: "Witness CarMax -- they are very rarely the least expensive in the market and customers seem willing to pay for their preferred buying experience."

YES, witness CarMax. THEY SELL PRE-OWNED VEHICLES. They do a LOT of things right, including their wholesale strategy. Have you EVER heard me say a dealer should price his/her pre-owned inventory above the market? EVER? Have you EVER heard me say page views driven by price sort aren't important? Have you EVER heard me say the pre-owned business isn't about inventory turn rates?

What you've heard me say repeatedly, is that the gross profit sacrifice on the new car side to play that game there is too high and not necessary. It seems YOU and OTHERS are trying to get dealers to accelerate their pissing contest to where they lose and vAuto wins. I understand AutoTrader paid a lot of money for vAuto and new revenue channels were sought. But I have to call it for what it is.

 

[Cullen C]

RE: "I hope you can appreciate there is a delicate yet necessary balance to discussing performance and sharing information that is better left for internal dialogue."

Unless you are claiming transparency and making claims based on selecting what you think looks best while failing to mention information that might provide REAL perspective, I would agree with you. Claims of happy customers and volume numbers need to be put in the context of ALL the information. Otherwise, one might think you are trying to deceive.

RE: "This is a great platform to discuss current trends and to weigh in on industry topics but it isn't the right forum to divulge every financial detail, especially when discussing startups."

And I'm not in as big of a hurry to pronounce something is a trend until it has shown some sustainability. Sustainability includes a profit history. I have repeatedly pointed out that it is easy to raise money for a start up, if you know what buttons to push. I've been going to automotive conferences for decades, and reading and writing about the industry. I long since lost track of most of the sponsors that have come and gone.
RE: "In reading some of your thoughts in the post above I struggle to understand how any of it matters to what is happening today."

I'll try not to hold your youth and experience against you, to steal a phrase from Ronald Reagan.

RE: "Giving me an example of changing verbiage at a Chevy store that I can only imagine was over 20 years ago hardly seems relevant."

You think 20 years is a long time? I guess only the things you've experienced in YOUR life are relevant. But I'll share something with you. The psychology that drives consumers hasn't changed. The idea that consumers today KNOW more than they did in previous decades, is a common theme. But they don't. They have more information. Having information, and being able to unpack it, are two different things.

RE: "I do not want to make this personal. I have no doubt that you have tremendous industry knowledge and your experiences in many cases are invaluable. I do think however in respect to what is happening in the used car space your experience may be a hindrance."

I think your inexperience is a hindrance. You become a kool aid drinker because its easy to be a kool aid drinker. You lack historical perspective.

RE: "I could not agree with you more that Ernie's pace of thought is typically one or two gears ahead of most."

He forgets that what he is saying has been rehearsed and role played in his mind for a long time while the people he is talking to are hearing most of it for the first time.

RE: "In having witnessed it up close several times I would tell you to first, trust that it is genuine and second, drink plenty of coffee."

I trust that he is genuine AND very bright. But really bright people can have gaping holes in their logic for a variety of reasons.

RE: "As usual I appreciate @Ed Brooks perspective."

As do I. We agree on most things political, most things in economics, most things that pertain to the pre-owned business, and virtually nothing as it regards the new car business. I was one of the first to write praises of vAuto and Dale Pollaks first book. I did a book review about 6 years ago. Reflecting back, I should have mentioned that when Dale discussed efficient markets he should have continued it on to its inevitable conclusion. Efficient markets lead to disintermediation, which is the elimination of the middle man. I'm not sure someone who depends on dealers for revenue should be touting an efficient market in auto sales. Regardless, his observations of changes the Internet has imposed on the pre-owned market were spot on then, as they are now. Where Dale and vAuto got off track was making the assumption that dealers should attempt to do the same thing on new inventory as they do on pre-owned. And that's where Ed and I disagree. Its like vAuto is trying to throw fire on the pissing contest between dealers where only vAuto wins.

RE: "The mention of CarMax and their ability to ask a premium for what is essentially an identical product as most dealers is a good one."

Sure, as long as the discussion includes proper context. For example, not commonly known is that CarMAx doesn't charge itself retail for recon. I don't think they even mark it up. BTW, Dale Pollak and I are in complete agreement about the stupidity of retail recon. Doing it at cost is stupid too. The formula in use 30 years ago works best today and provides the proper balance in allocation of cost and revenue.

RE: "There is a reason why every Apple store in every mall has a waiting list while you can buy the product in any Best Buy across the country."

This is a complete non sequitur to auto retail.

RE: "People will pay more for a special experience." Some will. The question is whether or not focusing a business plan on that relatively small percentage is sustainable. In auto retail, how do you define a special experience? If you think the discussion of what consumers think is a special experience is a new one, its not. Is a special experience related to One Price? DO you think the haggle is a detriment? If so, do you think that is new?

RE: "They will also do so for convenience. Imagine a place where both intersect."

When you find it in auto retail in a sustainable way, please tell me about it. I'm not talking about anecdotes. Until Carvana is shown to be successful, and that includes sustainable profit, it is an anecdote. I can give you plenty of anecdotal failures that were well financed. You can also watch the slow train wreck known as TrueCar if you need some reinforcement.

BTW, you will probably see TC take a little stock price bounce in the next couple of weeks, before it settles back down. Don't fall for the fools gold, but it might make for a little in and out stock play.

RE: "I get that we may not be able to find common ground on how this will play out."

Can you prove that my Grandmother isn't in orbit around Mars?

RE: "I would hope that before you write us off you at least look at a perspective that brought us here in the first place. The consumer."

I've been studying auto buying consumers for 45 years. I know the difference between how the answer survey questions and how they behave in the real world. I started selling cars in a One Price store 45 years ago. I am also familiar with the legal ramifications of One Price/No Haggle. Are you?

http://www.autodealermonthly.com/article/story/2014/05/no-haggle-no-problem-or-not.aspx

At some point I'd like to see auto retail conducting workshops for Apple and Disney employees so they can learn the challenges of selling cars to people with trade ins with negative equity, less than stellar credit, edgy DTI, wild expectations on price and trade value based on their inability to unpack all of the information they get from the Web, make gross profit in a competitive environment, and get a decent CSI survey. TRying to make a comparison between big ticket items and gadgets is a complete non sequitur.

Honestly @ruggles based on your comments I would more safely assume that you and your grandmother are orbiting Mars than observing what is happening around you daily on our planet. I truly had hoped to avoid having the discussion veer into a personal back and forth about your or my age and our experiences. But it seems to be a common theme for you here.

First, in case you have forgotten what a "trend" actually is:
http://www.merriam-webster.com/dictionary/trend

Funny how it does not say that it has to be a sustained change to be considered a trend. Feel free to petition Merriam-Webster.

Second, quoting Ronald Reagan? Taking shots at my inexperience and youth in the same thread as giving me facts about CarMax that "aren't commonly known", I can only guess that you didn't take the time to actually look at my experience. If you had you would know that I worked at CarMax for 8 years. I doubt you could give me any detail about their business that I do not know. Before you jump to some other half-cocked conclusions I will offer to you that I have worked in traditional dealerships as well. I have also spent time as a consultant for vAuto(since you included comments about Dale). While I may not be able to match your length of time in the industry I would not be so quick to dismiss the depth of knowledge.

Lastly, somehow you thought including an article that a no-haggle approach is dangerous legally made sense? Shockingly this only seems to be a problem when a traditional dealer isn't prepared to commit to it.

Previously I had looked forward to your responses because I genuinely enjoy discussing the car industry. But when you start making comparisons to Carvana and TrueCar, you bring up your grandmother orbiting Mars and tell me that Apple and the premium people pay for their experience doesn't matter in this dialogue I quickly lose interest in whatever you have to say.

So respond, include more articles, tell me about something else from 45 years ago. I am going to watch football now.

 

[ruggles]

RE: "Honestly @ruggles based on your comments I would more safely assume that you and your grandmother are orbiting Mars than observing what is happening around you daily on our planet."

Actually, I observe daily with the perspective of some history.

RE: "First, in case you have forgotten what a "trend" actually is:
http://www.merriam-webster.com/dictionary/trend"

Perhaps some common sense is in order. When something is trending, it is trending. When it isn't, it isn't. But if you want to mention a specific, common sense can carry us though. For example, a strategy of negiotiation that is pretending not to negotiate a trend? Is a business model that includes lowering margin and attempting to make it up in volume a "trend?"

RE: "Funny how it does not say that it has to be a sustained change to be considered a trend. Feel free to petition Merriam-Webster."

Don't have to. It can be observed. Is there a "trend" to try to capitalize on consumers who say they don't like to negotiate a trend?

RE: "Second, quoting Ronald Reagan? Taking shots at my inexperience and youth in the same thread as giving me facts about CarMax that "aren't commonly known", I can only guess that you didn't take the time to actually look at my experience. If you had you would know that I worked at CarMax for 8 years."

Sorry you didn't appreciate my attempt at humor after the things that have been said about me. The fact that you would know that CarMax doesn't charge themselves "retail recon" doesn't change the fact that that is not commonly known. Did I say YOU didn't know it? How did an observation become a "shot at you?"

RE: "I doubt you could give me any detail about their business that I do not know."

You must know more about CarMax than I do. I never said I was an authority on them, although I probably know more than the average guy. It seems I complimented what they have accomplished while making the distinction that my discussions with Ed Brooks differentiate between new and pre-owned. In fact, my most recent posting was also a response to some of Ed's comments, not that he hasn't heard them before. He continues to try to make a case that there is no difference between new and pre-owned in terms of the most effective dealer approach. I thought I made that clear.

RE: "Before you jump to some other half-cocked conclusions I will offer to you that I have worked in traditional dealerships as well."

What was my first "half cocked" conclusion?

RE: "I have also spent time as a consultant for vAuto(since you included comments about Dale). While I may not be able to match your length of time in the industry I would not be so quick to dismiss the depth of knowledge."

Who are are you talking about, you or Dale? I know Dale's knowledge includes actual dealership ownership where losses come out of his pocket.

RE: "Lastly, somehow you thought including an article that a no-haggle approach is dangerous legally made sense? Shockingly this only seems to be a problem when a traditional dealer isn't prepared to commit to it."

Glad you got that point. While I'm not sure exactly how you define a "traditional dealer," kindly explain to me why ANY auto dealer would want to lock himself or herself in? How many NON traditional dealers do you think walk a deal over a few dollars? Most NON traditional dealers ( so we won't have to parse a definition) pretend not to negotiate as a strategy of negotiation? FEW walk a customer over a few dollars. You would know better than I if CarMax does, but my comments on the issue are mostly focused on new vehicles. Even when playing the inventory turn strategy as outlined by Dale Pollak, I'd be the guy to walk a deal on a premium car with a righteous pedigree. But as a general rule, if a unit is replaceable, I'd deliver it today to get the trade and inventory turn. The last thing I'd do is hem myself in with some One Price/No Haggle statement. After all, what's the point in One Price/No Haggle if your not going to feature it in your marketing?

Since my comments are often directed at multiple people, if the shoe doesn't fit, don't wear it.

RE: "Previously I had looked forward to your responses because I genuinely enjoy discussing the car industry. But when you start making comparisons to Carvana and TrueCar, you bring up your grandmother orbiting Mars and tell me that Apple and the premium people pay for their experience doesn't matter in this dialogue I quickly lose interest in whatever you have to say."

Feel free to lose interest. What bothers you about my TrueCar/Carvana mention? I do believe that for both to survive they're going to have to change their business model. Carvana will need to become more like Texas Cars Direct while TrueCar has to recognize that its only customers are dealers, not consumer end users. Demonizing your customer isn't sustainable. But I did give you a hot stock tip.

If you think there are real parallels between selling gadgets, and big ticket items where trade ins and complex financing issues are involved, I can't help you.

RE: "So respond, include more articles, tell me about something else from 45 years ago. I am going to watch football now."

Since it doesn't seem pertinent to you that some of these new fangled methods have existed for years, feel free to ignore any mention of such stuff. After all, if context isn't important to you you'll continue on your merry way without it.

So what I'm gleaning from this discussion is that you think, in this modern era, that consumers want something different than in the "old days", and that success today is predicated on satisfying their new desires. Is that about right?

Hope your team wins.

 

[Chris Leslie]

The future isn't what it used to be.

 

[joe.pistell]

David,
Take that chip off your shoulder. It's ruining your message.

CAUSE:

...Perhaps some common sense is in order.

EFFECT:

Sorry you didn't appreciate my attempt at humor after the things that have been said about me.