Looking to open Independent Dealership

im an independent here in Phoenix.

Let see if i can help.

1. Recommendations on DMS software. I have a leaning towards cloud based software with a reputable company with integration into 3rd party offerings for future growth but open to any and all recommendations

I signed up with DealerCenter. They are a sub of Westlake Financial, which is the largest Subprime Lender in the World. I have had good luck so far. But there are other companies you can sign up with that might save you some money each month. Mainly on running credit reports etc.
i pay Dealer Center WITH my webpage around $270 a month. It goes up and down depending on how many credit reports i run as that costs around $2.50 a report. When you are HIGH volume lots of dealers use a company strickly for credit reports and use something else for DMS. Good thing about DealerCenter is if you do any deals with their main company Westlake or Western Funding, They will pay the CORE cost of the DMS for me which is like $100


2. Thoughts on purchasing on credit or floor planning? If I did this it would not be all cars but may 2-3 initially. Something I could handle w/out getting out of control. I have an 800 credit score so even w/out flooring I could secure a line of credit if I needed it. My thoughts on this it would help keep me liquid if I need to leverage it.

Flooring.... Where do i start. There Are some pros and some Cons. If you have a good relationship with your flooring company and agent it helps. I Personally when i started didnt use one. Nextgear approached me and i declined to sign up 2 times. Then the 3rd i said what the hell and signed up. Got approved but didnt use the line for atleast 3 months. Finally floored one car and it seemed pretty easy and cool. Since you said you have an 800 score, you will get easily approved,but it will be 6months in business before anyone approaches you. Nextgear is usually the first as they are the market leader in the car world. As soon as you sign up for AuctionAccess(the universal auction card owned by manehim) they will keep an eye on you and send rep to you for flooring. Personally If you got the cash ONLY to support yourself then stick to cash only Or a hybrid mix of 50/50. DO NOT DO what alot of dealers do like you. Good credit and get a $200,000 line and go out an buy $100k or more on the flooring line. You will be done real quick when curtailments come up and cant pay them. This is how alot of Dealers go out of business. Business is good for 6 monthes, you which you can sustain and go buy a bunch on flooring and then you cant pay the payments cuz business drops off etc.

3. I would be using 50k of that cash to live on the first year. I would be trying to do this w/out making major changes to my current lifestyle mainly because my wife just wants me to get a job but I'm determined to start my own business and keeping income as close to normal as possible will help with keeping my lifestyle normal until I can get things going on the business side.

Keep Atleast 6 monthes of overhead to survive. This way if you have slow months you can still stay open. Dont max out and not have enough cash to support yourself. Cars will come and go. But business will just GO and close if you cant support slow times.

4. Not really wanting to tote the note because of the type of dealership I would want to open (low visibility mostly Internet sales) but again open to thoughts on this. Nothing is set in stone.

IF you are trying to mainly do internet sales, try and get a warehouse location. Dont get a main street $6000 a month location. START SMALL AND CHEAP. When i say cheap i mean a warehouse thats like $2000 a month or less if you can Or whatever is conssidered cheap in your area. Theres dealers here who have Warehouses that hold atleast 20 cars and rent is only like $1200-1500 maybe.
 
IMO, one of the most important things about this, your drive, determination and love for automotive retail. Without that, you'll never get anywhere.

You should weigh the pros and cons, the positives and negatives. Time is your enemy, you'll only have so much start-up capital to burn (and amount of shit you'll put up with from your wife) before you start making profit to keep the biz alive, avoiding the dead pool. Don't start a business unless you're willing to run the gauntlet.
  • DMS -- I wouldn't worry about anything super robust until you have more inventory, but plenty of threads and ratings here (unfortunately, the dealers that I have worked with had some fairly awful installations. I'd rather not mention or suggest those. I have ZERO experience with good ones.):
  • Credit / Physical Location -- sounds like you're in a good situation with an 800 credit score. However, living off of $50K ain't going to be easy, unless you've another source of income outside of this venture...? So, you've but $100K to set this all up? Are you going to be working full-time and attempting to run a used car lot? It's going to be compulsory to be on site, unless you have some car lot boy that will ping you per walk-in lead or add to CRM.
  • Automotive Classifieds / Listings -- I'm not so sure you should consider classified sites such as Autotrader, Cars.com, Edmunds or Car Gurus, etc., until you've a greater amount of units. The start-up costs are going to be too high. Plus, what works in one demographic might not in another (too risky for you now). I'd stick with paid CL listings, eBay motors and other online classified sites.
  • Website -- I wouldn't go crazy with such a low amount of units. You might find it challenging to get enough content to create a website that would be respected by the search engines. I would keep your website as usable and simple as possible.
  • Vehicles -- I would agree with your assessment on DFW vehicles (luxury sedans, trucks, suvs).
  • Local Listings / Local SEO -- I used to white label Vendasta (great company) and pitch to dealers. Their listing distribution service is great and push to the large aggregate groups @ https://www.vendasta.com/marketplace/listing-builder/business-listing-distribution (granted, there are many like this, but it takes into account automotive-centric 3rd party sites = fairly cheap, ask for Brendan King (CEO), tell him you know me he might give you a lower price, I gave him a lot of business previously).
Good Luck!

Hello Alex, I found your comment " I used to white label Vendasta (great company) and pitch to dealers" to be very interesting as I was considering the same thing. Could you offer some feed back on why you stopped offering those services? Thank you in advance ;-)
 
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I just switched jobs, due to family reasons (a physical location move). Other than that, the company I had worked for and the services created and offered were sold to a larger agency. That offering / system is still very effective. I'd go after it, if I were you.
 
Something worth considering when launching a new site - picking a domain and getting it to rank from scratch can take serious time.
Sometimes I get lucky and it's ranking in 1 month for very specific terms, but for generic terms it's very difficult.
If you can somehow purchase a domain that isn't blacklisted and is already established, it might be worth looking into.

howlongtorankgoogle.jpg
 
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I have been involved in car sales for a long time, working for the Dealership center, that’s why I can provide you some recommendations related to Dealership Software we have been using.

I can particularly point out <SEO spam removed> that facilitated, boosted and optimized car sales. Buyers can buy any car till the moment auction is going to end, choosing “Make an Offer” or “Buy Now” feature. There is one more option Digital Marketplace allows as “Reserve Price”, which lets a seller to agree to trade the vehicle for the reserved price, but not earlier than the end of the auction. The most convenient that Auction Marketplace is compatible with any kind of device, all major platforms and OS, including Android, Apple and Windows.
 
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I have been involved in car sales for a long time, working for the Dealership center, that’s why I can provide you some recommendations related to Dealership Software we have been using.

I can particularly point out <link removed> that facilitated, boosted and optimized car sales. Buyers can buy any car till the moment auction is going to end, choosing “Make an Offer” or “Buy Now” feature. There is one more option Digital Marketplace allows as “Reserve Price”, which lets a seller to agree to trade the vehicle for the reserved price, but not earlier than the end of the auction. The most convenient that Auction Marketplace is compatible with any kind of device, all major platforms and OS, including Android, Apple and Windows.

You're doing your employer a disservice with these posts. I'm tempted to reach out to them and tell them they should take a better look at whatever SEO company they hired. DealerRefresh is full of people who can sniff through SEO spam.

I've removed your links. The only reason I haven't removed you is because I haven't decided if I want to take the time to rat you out to Auction Streaming.
 
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You're doing your employer a disservice with these posts. I'm tempted to reach out to them and tell them they should take a better look at whatever SEO company they hired. DealerRefresh is full of people who can sniff through SEO spam.

I've removed your links. The only reason I haven't removed you is because I haven't decided if I want to take the time to rat you out to Auction Streaming.
I was waiting for one of you guys to take action before I reported that post (too blatant) and to think he's using our name! ;-)
 
Guys, I'm new in Marketing. Your forum is so great and informative and has so much traffic, I couldn't resist to post a link here. Don't be mad at me, I just wanted to make sure your guard is as strong as I was told. One question: how do you manage to track all of it? it is a LOT of work to do)

Anyway, you are great. Best wishes and good luck


You're doing your employer a disservice with these posts. I'm tempted to reach out to them and tell them they should take a better look at whatever SEO company they hired. DealerRefresh is full of people who can sniff through SEO spam.

I've removed your links. The only reason I haven't removed you is because I haven't decided if I want to take the time to rat you out to Auction Streaming.
 
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You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your car dealership. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your Business
STEP 2: Form a legal entity
STEP 3: Register for taxes
STEP 4: Open a business bank account & credit card
STEP 5: Set up business accounting
STEP 6: Obtain necessary permits and licenses
STEP 7: Get Business Insurance
STEP 8: Define your brand
STEP 9: Establish your Web Presence

This business is perfect for individuals who are auto enthusiasts and who have a good business sense. Former sales managers and car salesmen are also good candidates for this type of business. As the owner, you may have a flexible work schedule, but this is not guaranteed.
 
Brand new to forum and came across Paul C's. post from 2018. Does anyone know if he opened his dealership and if so, is he still going? What is the name of it? Its a tough business to get into and many of the posts here gave him some good advice and helped to set realistic expectations for the first 2-3 years as a small start up independent dealer.

I was exactly where Paul C. was in 2013 - burned out from 25 years of corporate America (General Motors) with about $100K of savings. First 3 years were lean and mean but I am going into year 7 and its generating a decent living after a lot of trial and error. Opening my own dealership also introduced me to the world of "consignment," first as a means to supplement my inventory without a lot of capital expenditure and risk, but now as Founder & CEO of Retail My Ride. I am not here to sell my website or product - its Free. I am here to get the word out about the power of consignment and serve as as testimonial that it does work. Its really true, done right - You Don't Have to Own It to Sell It (and make money doing it). If any small to medium dealers are doing consignment, come claim your free dealer listing in our national directory of consignment dealers. If you are a dealer and not doing consignment, for whatever reason, let me know and I am happy to share my 6 year journey and get you up and running with consignment. Leverage my 6 years of trial and error doing consignment.

Anyway, I am glad I found this forum. Like I said, I am not here to sell anything, just share knowledge and expertise in a forum format. Hit me up.