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The $500million Elephant in the Auto Marketing Living Room

I'm talking about Texas Direct Auto, which has $500million in NATIONAL AND LOCAL used car sales out of ONE location in Stafford, Texas (just southwest of Houston).  They opened on eBay years ago, and nearly by the time they published their book "Zero to $60million" they had broken $100million in sales.  Nowadays, they use AutoTrader and Cars.com, but they haven't always.

They are open 9am-6pm, Mon-Saturday.  They achieved $100million as appointment-only when they were in their smaller facility, but you can visit during open hours now and see some automation to help you select a car--and then wait for a salesperson without an appointment, if you want.

Very few successful clones have arrived through the years, which has always surprised me.  Back when they reached $100million, I put a business plan in front of a dealer to compete using their methods--and he balked because he said (at the time) "There's probably not another $100million in it, they've got it locked up."

I wonder if he would now like a piece of the $400million to which he turned his nose up?

Texas Direct Auto sells nationally and locally and are the #1 eBay dealer in the world.  They reached $100million WITHOUT anything but eBay.  NO PPC, SEO, social media; no print, radio, billboards, or TV, either.  All which they have added now in the years since eBay-only and have been accelerants to their core business.  Though all were not added at once.

The sales staff has a life outside the dealership, gets good money and benefits, and has great hours for this business.

My question to us all is:  At $500million, why does this dealership get no traction in other dealers' minds?  What is the leap they can't take?  And why do vendors not do case studies to understand THIS dealer's success so we can learn from it?

I'd really like some answers.  Thanks!

by Keith Shetterly, Copyright 2012
All Rights Reserved www.keithshetterly.com
keithshetterly@gmail.com

Views: 373

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Comment by Keith Shetterly on May 9, 2012 at 8:46am

Keith!  Get that company website finished.  :)  And thanks for the comment, agree quite a bit with it.  

I especially like the idea that buying a car is NOT an impulse purchase any longer.  Late nights waiting for folks to drive by . . . silly-er and silly-er idea as the years go on.  When you have the used car they want, they'll often drive 30-50miles to get it.  Do you think they won't take a day off???  And with that day off, they are committed to a purchase.  Even committing to blowing a Saturday is more glue than most see.  email me some details of what you're doing, please, keithshetterly@gmail.com.  Thanks!

Comment by Keith Camiolo on May 9, 2012 at 8:40am

 

Keith, our company offers dealers this very exact fix to their dealerships. As you have said, it is as if they think all of this income has dried up. It has not and it is still out there for the taking, they just have to take a leap of faith. Because there has been so many snake oil salespeople in our industry that have wasted a lot of the dealer’s money. we have to get them to open their eyes again and look past the blinding loses that they have had to falsely endure that they cannot see how clear it is to make the same for them self’s. I believe until the next generation of dealer principles take over, old school is going to continue to hold them self’s back. Also once the next generation has true control, going digital we be second nature to them. Then you will hear more success stories like TDA. The guard has changed, and the hurtles are gone and the new will become profitable digital dealers. Keith thanks again for a great article, and making it clear that it is just a leap, and without a franchise sign hanging over you ether.

Comment by Keith Shetterly on May 9, 2012 at 7:10am

Another friend of mine just went to work there.  They have their own CRM.  A process that is NOT deviated from, at all.  Acquire 1,000 cars a month, minimum.  Sell 2,000 a month, average.  Finance.  Delivery.  SALES @ $500million+ per year.

And they do it all before 6pm each day.  You want to buy a car at TDA?  You take a day off or you come on Saturday.  YOU ARE COMMITTED.  And they didn't used to have sales on Saturday (that's how they broke $100million)!

Our whole industry seems to be "crickets chirping" over this one.  WHY???

Comment by Keith Shetterly on March 7, 2012 at 7:29am

Oh, I'm sorry, TDA already DID that.  :)

Comment by Keith Shetterly on March 7, 2012 at 7:25am

@ Andrew:  Hi Andrew!!  Hope you are doing great.  And, yes, a billion dollars might get somebody's attention.  It's not just dealers--it's vendors, too.  Scary thought for some of them:  What if you could make a HALF billion dollars in yearly sales without social media???  Sheesh.

Comment by Andrew Biondo on March 7, 2012 at 6:26am

Great Post Keith. I see it almost on a daily basis, it is the fear of what their PERCEPTION is of the car business. Which is traditional media which is on life support. It's not if but when this guy hits a billion maybe just maybe others will take notice?

Comment by Jae Chang on March 2, 2012 at 10:31am

It is Fear of change.  Thinking outside the box has an inherent effect to most of us. Risk / Reward can be minimized / maximized with a good execution as long as enough time is allowed.  Most don't give anything a chance to develop. Good plans take time, Great plans evolve. 

Keith I know you can make it happen!

Comment by Keith Shetterly on February 29, 2012 at 12:10pm

Thanks Stan, my friend!  I see you got some sleep.  :)

Comment by Stan Sher on February 29, 2012 at 11:58am

This operation is amazing.

Comment by Keith Shetterly on February 29, 2012 at 11:25am

And here's the deal:  This is REALLY a FIVE HUNDRED MILLION DOLLAR ELEPHANT IN AUTOMOTIVE MARKETING.  How much money has to be in it to get folks past this issue?

You hit the mark on TrueCar, as well.  Or the Next TrueCar.  If you can achieve your first HUNDRED MILLION using ONLY eBay, and customers like you, what is the issue?  

It's not TDA.  It's the Fear Factor.

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