Interview with Bob Hollenshead on wholesale market, Acquisition of Adesa, and more

June 1, 2022| Zach Klempf

In this episode of the Used Car Dealer Podcast, Zach interviews Bob Hollenshead, the CEO & Founder of Accu-Trade, one of the largest used car wholesalers in the United States, and a serial entrepreneur. Zach and Bob discuss the current used car market wholesale conditions, Carvana, and the future outlook of the used car marketplace. 

Zach Klempf:  Well, Zach here, and I'm so excited to have Bob Hollenshead back on the podcast. For those who may have missed the episode number 12. Bob is the largest used car wholesaler in North America, and a serial software entrepreneur. We've had some audience questions come in as well, since that last interview. And Bob, thanks so much for being on the podcast today.

Bob Hollenshead:  My pleasure, Zach.

Zach Klempf: And moreover, congratulations on the acquisition by Cars.com. Tell us a little bit about that journey, and what made them a great partner for your business.

Bob Hollenshead::  Let me just back up one second to revise your introduction. Actually, at this point, John Wolfe has become the largest volume wholesale dealer in North America and God bless him for that. He's been a good friend. And we've had seven or eight years of conversation back and forth to actually enable I think what John has taken to the next level, he's doing an absolutely unbelievable that actually almost superhuman circumstances what he's doing with his Give me the VIN program. I'm sorry, ask your question again, Zach, I just wanted to correct that just so we don't get people confused.

Zach Klempf:  No worries, I was congratulating you on the acquisition by Cars.com. And tell us a little bit about that journey and what made them a great partner.

Bob Hollenshead::  Well, obviously, the software we built is agnostic and inclusive. And when I say agnostic and inclusive, it's good for all parties. It's good for consumers good for dealers, it's good for communication, and a dealership, it's a good for creating a instant cash offer for any consumer online to enable the digital retail. It's phenomenal. And dealers are finding it to be incredible as a service drive acquisition platform is good for you know just about anything that a dealer does when they touch event. So when you think about who you're going to actually choose to distribute that would say it has to be a entity that is also agnostic and inclusive. And when you think about that, it would make it difficult if it were just a auction company, or if it was just a auction platform, or if it was just let's say a dealer group, or if because what you basically are doing is eliminating the capability of being agnostic and inclusive. In other words, when you're pricing vehicles, based on VIN specific, historic transactional DNA level information on a VIN, it has to be as a third party used by various levels of potential users as consumer would that actually feels like it's a fair offer based on enabling all the criteria to take be taken place options detn scratch, previous accident, desirability in the current marketplace, and somebody's willing to write a check for it. So what we find is most dealers, in fact, all dealers like to have the ability to have a third party enable a evaluation because it enables them based on their propensity for that particular event to Trump it or to lean on it. If leaning on it means where you've given them insurance balls, in other words, it intestinal fortitude to actually take a chance on something that they otherwise might not necessarily step to, simultaneously in many cases, in most cases in a service drive, for instance, it's a car that actually matches the brand of a dealer, right. In other words, it's a Toyota in a Toyota shop, it's a Mercedes in a Mercedes shop, right getting serviced. So typically, it's a can be a customer, there's based on the circumstances of the marketplace today. You know, it's highly likely the consumer bought the car for less than the car's currently worth if it's a two three-year-old car than it's currently worth in market. So long, long-winded story. If we distribute with a less than agnostic partner, it kind of emasculates the depth and breadth of what the potential distribution would be. And if that makes any sense to you Zach, but that's the long and short of it separate from the fact that we find that Alex Vetter and his group that he says he surrounded himself with are really good people. They're genuinely they're sincere, good, solid people with dealer's best interest in mind. And that, to me is very important. being a dealer. You know, getting involved in long-term conversations with folks, I think you get to understand their DNA. And I'm very, very pleased with the relationship that we've actually created.

Zach Klempf:  That's great. And I know Alex, he's a great guy, too. So Bob, we still have

Bob Hollenshead::  That's not a fake thing. That's not a phony baloney thing with the guy. He genuinely is like a Midwesterner. That is, he's a genuine guy. It's not like, you know, smile on your face kind of guy if you know what I'm saying to you?

Zach Klempf:  So, Bob, we have a supply chain challenge still this year? What has been your view of 2022? In terms of the used car marketplace thus far? And where are we headed? 

Bob Hollenshead::  Well, I guess it depends on what you're talking about. So obviously, we are pre-owned, centric. So our business is based on the wholesale marketplace, the the auction marketplace, the liquidation process, etc. So when you say there's a supply chain issue, obviously, there's a supply chain issue for last couple of years dealers are finding our way around charging you more for cars, you get more crazy, nothing in stock, but you know that nothing in stock things starting to slow up a little bit also. Right. So we're starting to see not that people are flushed with inventory, right. But, you know, the dealers are selling new cars, they're trading plenty. Of cars, there's a lot more cars in the market. dealers that were desperate to keep everything are no longer keeping everything. You know, they start piling up at crazy numbers that as this market starts to decline, like it's declining right now. You know, of course, when you start talking about what's declining, what's not declining, trash cans are still bringing good trash can money. But what you wind up with is these cars that actually are more expensive. You know, 80-90 $300,000 cars are not what they were three to five weeks ago, right? We're starting to see the gas prices invade into people's psychology, right? We're starting to see consumers coming in trying to trade cars in they bought last year and 30 or 40,000 upside down, right. We're starting to see like a lot of different things that indicate that you know, supply chain, you still have rental car companies buying deep today in Dallas at Manheim, last week, now there was buying deep into a certain very narrow segment. But it's a segment that new car dealers typically would love to own. But they're buying too deep, because they're not selling cars, they're renting cars. And when they're paying 8000 over marketplace for those cars, it tends to make people feel warm and fuzzy about how strong the used car market is take that little element out of the picture. And it's a different, you know, your your a quicker to off windage and elevation at that point in terms of how hot the market is. I don't know if that makes any sense to you Zach the exact but we see it extremely clearly. And then there's, there's there's a lot of other indications that are from our perspective, which is a little different than sitting in a new car showroom or sitting around analyzing data. How many people are logged into our lanes, and then compared to how many people actually are bidding or buying in the lanes. It's what I call a lot of grandstand activity, grandstand activities when you have 687 people logged in and nobody's bidding on a good car, right? So in other words, what that is, is everybody watching just to see what it's actually worth, because nobody has the testicles to actually pick it off. You follow me? We're seeing that over the past month, more and more, plenty of people logged in very little activity. So that's not a good indication of you know, a desperate market for we just need cars, that's absolute and total nonsensical BS. And you know, when he's driving around just looking left and right when you're going through automotive row in Miami or in Philadelphia, in Chicago or in San Francisco. People have cars in stock, right? They're not parked sideways on the front line any longer to make fillers, cars or they're not I'm not saying I'm not talking about overflowing, lots but go past anybody's lot, tell me they have no cars for sale. It's that once again is it's a lingering bullshit story I'm sorry for the language of the book, bold bongs story, that there's no cars around, there's plenty of cars around. And it's a question of, and I'll tell you, the other thing that you're seeing is the no sale parade has returned to auctions that are selling cars, I'm not talking about trash can sales, not 15,000, lower 15,000 North, and you're back to a normal dealer, no sale and 50 60% of the cars 40% of the cars. And that has not been the case for a couple of years. So all those things put together. And I think we're in for I'm not saying it's gonna be a crash, like the stock market is, but there's a correction that's already taking place now. Because you know, you don't have this desert of cars, and you know, everybody dying to get to him. That's just a fact.

Zach Klempf:  So, Bob, during the pandemic, many dealers, they started to leverage online wholesale platforms. And now that COVID restrictions are gone. Are you seeing dealers going back to the physical auction lanes? And then longer-term? What are your thoughts on buying wholesale online versus going in person?

Bob Hollenshead: Yeah, so you opened up Pandora's box here, brother, so you got to be talking about so these general broad brushstrokes are very difficult to fill in, because you got to you got to narrow it down. If you're talking about these little auctions itself, 1000 cars a week that sell the average $12-15,000 car, and there's people going back to those auctions, typically, their condition challenged or car challenged cars that don't draw people from, you know, across the country, they're more or less people are driving to three, eight hours to get the auction buy their three cars and go home. And, you know, there's an awful lot of dealers, obviously, I've been doing this 50 years in the auction block. So, you know, the camaraderie and the whole thing that goes with it, the stick that you put on in the auction block at all, in my estimation is a thing of the past, you know, we miss it. It's, you know, we love nostalgic things and all the rest of it, right? The inefficiency of it. And the the idea that, you know, dealers best employee, the smartest employee, they're used car manager is going to take two days off the drive to an auction and stand there and bid on three cars, where he could have been looking at 19 screens simultaneously, and actually buying what they need. Without, you know, the windshield fatigue. You know, the time and effort of going and marched through 200 acres of cars, the idea that that's coming back, and it's going to replace the cell phone, you know, dial-up phones are on their way back. Don't forget, they'll be here soon. Because we really loved that noise, dial up telephone. It ain't happen a mo you follow me? You know, we're selling $25 or $30 million for the cars on an afternoon. In a couple of lanes. In our underwear, you follow me? So getting up and start showing up and spitting and screaming and throwing shit at people to buy cars was so much fun. And it's such a legacy. It's a thing of the past that do it's never ever coming back. So the you know, there's a lot of solid little auctions, the surf net auctions, and so Ford they got a great dealer base, they got dealers showing up. They're doing whatever they do. What even asked them in other words, the internet's creeping in, right, they're selling not they used to sell 0% than they sold 3% online now they're selling 30 - 31% online. So in our case, we saw 100% online at minus four cars max, people are standing in the lane, and you know, they're trying to be cutie pies bitten and make it through somebody else's bitten and the nonsense. I mean, it's not nonsense. They're good at what they do. And then there's two other dealers that show up. I mean, I get the statistics, we used to have 7000 people with better badges in the lanes. At this point. There's 142 in the world's largest marketplace. So the idea that, you know, there's so great, you know, we went to the exotic sale and overs people there. If we didn't sell anything, and of course that you had there, we got more for the following day and sold at a higher percentage. The following day with nobody in anybody's lane. It's very surrealistic to watch it, and to participated in it. I still pay my underwear the night before the auction, you know, assuming we're not going to sell everything and of course we sell everything but that's just the normal thing that's evolved over 50 years of doing this thing, right. The excitement still there. I don't think we have customers that are pissed off that we don't do it in the lane. They'll say Oh, Wish I could touch the car, I wish I could smell it or in my case, if you don't like the way it smells, I'll take the car back. If you don't like the way it looks when you get it, they're just gonna make a call, we'll send a truck and go pick the car up. So it's not like anything's been missed. And the efficiency of it is not even in the same category. So you asked about other online platforms, you know, I would say that it other online platforms will never replace ever replace. And I love everybody and I love all the platforms and you know, all the rest of it, they'll never replace an auctioneer with a microphone in his hand and emergency, a seller that really is going to sell a car, you follow me, and a buyer that understands that we're not playing games and what you think you bought, you actually bought, you ain't gonna get tricked into buying something that you can then hide behind a cr or some other crazy thing. You're never gonna replace that with a static platform where somebody went out and did a thing, a little condition thing. And then hopefully somebody did it. And then they listed again, listed again and listed again, then maybe someday sell it. In other words, the time and effort that it takes somebody to use that, compared to lining them up, making them logically aligned up getting an auctioneer to can count. And when it's all said and done. That's 31 seconds, that car got new owner, there ain't no who struck John, and maybe it didn't mold, take it to another plant listed on three more platforms or some, it's never getting replaced. That's in our situation, because we're professional wholesale dealers, right? A new car dealer that is, you know, switching managers from here to there. And they liked that. And they did that. I think in some cases, they believe that it's good form. And as a result, it's fitting a little bit of a niche. There's a few platforms out there that the you know, the new car dealers seem to like they believe they're getting enough money for him. And if they a good deal is based on peace of mind, right, Zach, if they believe they're getting market value formed, and I guess they think they're getting market value, I can only tell you, they're not that there's plenty of money left under a hammer. But that's entirely up to them as their merchants their decision using them Santi Bell. 

Zach Klempf:  Yeah

Bob Hollenshead:  We got plenty of dealers using Accu-Trade. In order to get their base number, we invite them to list them on, I won't name the other platforms we asked them to, to be sure that what they think they're getting is market value. And if they want more, we'll buy it. Or if they want whatever they'll bring on those auctions. We’ll buy them will take them all means nothing. To us. It's good. We just want to be sure everybody's getting what they need to get in order to make their deals and liquidate what they'd like to liquidate. So there's a place for it. I just don't believe it's ever going to replace a real auction. That's all.

Zach Klempf: So Bob, what are your thoughts on Carvana acquiring the physical auction assets of Adesa from car and what's it mean for dealers that go to that auction?

Bob Hollenshead:  So that's that's, it's, again, it's a 50 pronged thing, in my opinion, smartest thing I've ever heard anybody ever do ever so everybody's spitting and throwing things at you phone right now? Because Oh, this guy's and so you don't know he's talking about okay, I believe I agree. Except that it's not true. If if Carvana does what I think they have the ability to do, I don't know that they have the psychology to do it. I could make the Adesa auctions with Carvana owner them the greatest auctions of all time. It's easy, it's not hard. It's really simple. First of all, it was brilliant. From a Wall Street standpoint, even though they had to do some crazy debt thing to make it happen all the rest of it. The physical locations and being 100 miles away from the vast majority of the population. Nobody can say that's a bad idea. It's not a bad idea. The fact that Ford just announced they're not financing their Ford dealers, if they buy cars there and Toyota pulled out Mercedes pulled out and all the rest of it. The fact that they pulled out don't mean they're not coming back in. It means that at the moment they pulled out because somebody got made and they didn't want to sell their cars there anymore. First of all, how many cars were they really actually selling? There are no cars coming off lease, right? They're all getting absorbed before to get there. So what did they really, what did they really pull out other than, you know, having a little time in the limelight saying they did something right. I don't think it's the bulk of their business. That's one I'm gonna tell you how they can fix it. I've already had a couple conversations with some people they're not that they're going to let her listen to a dumbass like me, but there's a couple things about people that are car dealers and I love all car dealers. I'm one of them. I love us. I love every one of us. good bad or indifferent rats. You know genius. I love everybody but love them all. There's one thing that runs common there's a lot number things are common through us all. If someone was to charge lesson fees, if the devil was the owner of the auction, and somebody said no more buyers fees at the auction, you'd need traffic cops to keep dealers away from that particular auction. Because we've all been raped, and not not forever. I mean, I look back at my original sell tickets from 1972 was a $21 sale fee, you know, on a $42,000 car, right? So in other words, it's a little different. But you know, when you look at a and you can say the online thing storage less that's true, but you get less also and all the rest of it. So that's a relevant, relevant relative question. But from my perspective Carvana has the ability I don't know if they're gonna have the psychology though. But they got the ability to make it the greatest selection, just to have all dealers there's no there's no buyers fees, and watch what happens to the parking lot. All they gotta have is a future trash cans there. And because you're not paying a buyer's fee, everybody will buy every single dealer row by even including dealers, I'd never buy cars with Adesa, really charge their sellers, fancy, Tricia buyers free. And so that works. So you're saying how would that work? There's many different ways that that would work unbelievably. Well, to tell you the truth. I don't think we got the time to do this at this second. But to me when that worked to recur, and Odessa does have phenomenal locations. They got really good Boston centers right outside of New York. They got man. So you look at the locations they're relevant to populations, distribution, LA, San Fran, numbers they got they got good locations. So the question is, inventory and who how you're going to sell them? And I'm sure that anybody has in the auction business. Bob, you're so crazy. No, you really think about it now. How would you get cars get more money? For cars that's how marketplaces actually attract sellers. How would you ensure the fact that they actually bring more money charging their sellers rate let me get to give you a historical reality check. Paid auto auction, Pennsylvania auto dealers exchange got sold to Odessa. I'm gonna say I don't know. I lose decades. So I'm gonna say 20 years ago, right? Maybe it wasn't that long ago. I think it's 20 years ago, Hershey sold his original auction. He he was the original owner of paid auto auction for since Methuselah was selling cars, right. And the number one reason why all dealers went there to buy and to sell is because there were no fees. There was like a penny selfie and a penny by fee. Right, So there were 2000, car consignment auctions, So make no mistake, there's only a couple of them. auctions that were bigger than them. It was run nice. They had Pennsylvania Dutch food there. No fistfights because the guy from Brooklyn came their act is different than you know, I'm just telling you, that's the way it is. And then Adesa bought it in how many cars they sell now, per week, none. You know why? Because as soon as they bought it, they started charging high buyers fees. Nobody, nobody's gonna do that. So if we know that's how you're repulsed buyers, I believe it's exactly how you would turn it around knowing absolutely, that all car dealers are looking for a deal. They would buy a car from anybody if the fee was less. If Adesa or I'm sorry, if Carvana was to do a little something asymmetrical. They've been known to do asymmetrical things right. They've upset the applecart with how dealers are going to do digital retail customer has to have a drop-off in his living room. Right. So it's got everybody in the panic attack. So they obviously had a profound effect on the industry generally. On a retail side, right, I believe the same identical thing. The second I heard it, I said, this is the smartest thing I've ever heard. It's the biggest disruptive, potentially disruptive thing. And I'm not sure that the you know, those guys are really smart. The way they've handled Wall Street and all the rest of it right. I don't know that they and they ugly duckling and you know, drivetime over us but these are these are smart guys. These are not putzes, I believe. I don't know, they know wholesale well enough. I believe if they're if their brain was adjusted just a little bit. They could screw things up really bad for everybody. All people in marketplaces, locations. A disruptive model, since we know you don't have to make Take a profit to stay in business because that's what they do anyway, in the stock wells, it's obviously crashed now, but I have a funny feeling, oh, we're going out of business. I don't think they're going out of business. I think that's what you'd like to believe is going to happen. We're buying deep, I believe it's going to turn around for not just ember for other people in that arena. And because it's not going away to cell phone didn't go away. Did it Zach? You're holding too close to your ear. You're gonna get brain cancer. You got brain cancer yet, Zach, you're on the phone all day long.

Bob Hollenshead:  So all of these things like witchery and so forth. I don't know. I think it was a brilliant maneuver. And people are going to adjust their, their, their heads if people got something for sale. And you ain't paying some nutty selfie. I believe they're going to do good. mark that on the calendar, brother and then come back and tell me what a dumbass I was for saying it. But I believe it to be true.

Zach Klempf:  Yeah, we'll check back Q2 of 2023. on that. And, Bob, my next question. So a popular feature of like a Carvana. Website is the sell us your car feature, where you just enter VIN or driver's license plate number and they give you instant cash offer. When we last spoke, you told me that you invented this concept at a previous company Buybook about the importance of having this on your dealer website, and how the technology has evolved since the days of buy book.

Bob Hollenshead:  So you're young right Zach? Check you weren't around during trading marketplace and things like that, right? 

Zach Klempf: Well, I'm 31 

Bob Hollenshead:  Did we invent. We did invent buying a car without say give it a cash offer online. I mean, anybody could talk about something different, just as in factual right. Now, as a matter of fact, the folks at Mannheim macaques didn't believe we'd survive it. So you know, we have 5 million page contracts, and it's all your fault, if it doesn't work and all the rest of it, and you're responsible responsible for nothing, you know. Because man, I've said it wouldn't work. And it's no way this could work. And of course, it worked. And it turns out to be one of Cox's most profitable entities, etc. So, you know, without any question, it's something that was ahead of its time. And now everybody, their grandmother, their sister, their aunt and uncle, everybody has a some version of value your trade. You said, I'm Santa Zach, I mean, if you don't have that, I think the lack of some degree of transparency is missing. I personally believe the vast majority of the Carvana is a little bit different, because they can tell you a stupid thing and then do it anyway. Because we're not worried about making a profit. Theoretically, the truth of the matter is, they don't offer any more money at Carmax doesn't offer any more money for a car than we do or anybody else does. So, you know, you could do a lot of tricky thing is you can use some book value and tell the customers something and then change it when they get there. Because they weren't transparent about what was wrong with it or whatever. So all of those variations are, you know, I guess they have depending on who you got selling it, or who you're tricking into using it. They have validity, a used car dealer. It's I think it's a little bit different because a used car dealer is not a I would call it a broad and deep enough buyer for any car if somebody puts their Ferrari on their $787,000 will buy the car, but the used car dealer is not going to buy that car at the Chevy dealers not going to buy that car. The Ford or Mercedes dealer ain't gonna buy that car. If Oh, wait, Carvana ain't gonna buy that car. Carmax ain't gonna buy that car Zach. So it depends on the category according to talking about the franchise the demographic that you're in, not just if you're a new car dealer or a used car dealer, but there's a lot of other factors and then your capability when they get to the dealership of actually enacting it. What we learned from instant cash offers is you have to have trained people at the dealership I think over the past 10 or 15 years. You know Kelly's done a fantastic job at Cox has done a great job in training people in the dealership when the customer gets there to have the right person interact with the consumer. Somebody said you get I don’t know nothing. So we spent years learning about that is some a dealer would know what to do with the customer when he gets there but it's not necessarily a right person that's interacting with the consumer. You said I'm Santi. So at this point, in our case and what we're distributing with cars, we're going way down the funnel. In other words, including, you know, mechanical electronic ID verification, with OBD is what we call the eight key EKG, with the ability for photographs to be done and interaction at the dealership level before you get to the dealership, to add more pictures to be able to actually talk to the person that you're going to see when you get to the dealership. So we're, you know, it's evolved, profoundly, what hasn't evolved, however, is, you gotta have the right people in place at the dealership, in order to not just give them a price, but then to interact with them. To make it a soft landing. You see what I'm saying at you Zach, this has now evolved to you, when you think about it, you know, average dealer might get four or five, eight times 22 leads that are coming off the internet, there's somebody looked at their car, and it's a specific car they're looking at, there's a trade, and now it's going to BDC. Okay? Well, we're really going as really smart dealers are buying 80 and 100 and 130 cars a month, using our platform in the Service Drive. So the majority got the customer there, so you don't have to worry about where he is or what it is. So you really didn't physically take the pictures. And plug in the EKG center, you really know what's wrong with the car before you give them a price that you have to back up on. Or you have to get smashed and get welded into when you got the car in the shop. So our platform enables pictures just as to consumer, your cars and for service, would you we already know everything about it. We know miles we know the basic price of the car. In other words, how much we would actually pay for the car. Oh, wait a minute, and how much they paid for the car. See, if we know the pedigree of the car, who owned it last what they paid for it how long it was in the market before they paid for the car? Oh, now we're in a different level of who's got 100 lease we converted to, no. Now you got 100 leads and convert 62. Because if we know they bought a 2018 Corolla, for 21,000 for it and 2018. Now that's 31,000 miles and I paid 23 for it. Could there be a possibility that consumers just No, I don't want to make a profit on a car that I've owned for three years and driven for three years? I don't want more money than what I paid for it. How about that one Zach? So in other words, is that a better source than standing in an auction? Whether you're kicking the tires, or you're doing it online, to pay 23 5 bidding against Hertz and Avis, would you rather pinch it off to McGillicutty is in the service drive for less without going through auction fees, transportation, not knowing what the car needs to be reconditioned? Because we've already given you the printout. That's what our software does Zach you understand, I'm saying. So this is a massive gap. You know, there's other data mining, customer mining tools that are out there has no relationship to what we're doing. No one what you're actually going to get for the cart before the car even goes into the shop. No one what's wrong with the car before the service manager has his turn to take a shot at it to be able to make an offer to Mr. And Mrs. McGillicuddy on a car that they've owned for one year, two years, three years, 22 years, and know everything about it, how much it's worth what you can get for it. If it's good for wholesale, if it's good for retail, you say it's an entirely green field. You say there's nobody in that space. And I think this is where dealers are going to, I think get a fabulous value out of changing their modus operandi sourcing cars. a used car dealer. Can he do that? Zach? No, he can't. Why is that you don't have a service department does he say so you don't have that? You know, massive 100 cars 100 hours a day to work through in order to pick out the six that you're going to zone in on. You see what I’m saying to you Zach? used car dealer a little bit different in that regard. But I believe also now stop and think about that. Stop Zach hold on one second, hold your britches on watch. Now you got that same Corolla it wasn't 32,000 miles and three is 173,000 miles, you say and it has an EGR valve and it has a XYZ on the emissions. Are you following me? In the Toyota dealership Of course your 4700 parts or 20 180 million hours Of labor which by the way, our tool actually has delineated for you very clearly right on the appraisal platform, are you following? Now? What would they do with that car? Well, if you present the McGillicutty, who already knows that the EGR valve and the emissions are bad? And you show them logically how much they're gonna get for the car and why? They're gonna get 13? Six? And you know what, they're gonna be really happy because as 110,000 miles on it, they've owned it for all that period of time never had an accident where the original owner, they're thrilled to take a check or get slammed into another new car. Where's that car goes? Zach, you guessed it to your local buy here, pay here dealer who actually can fix the emissions problem for $16? Are you following me? Yeah, what happens in that food chain? Right? The big one eats the little one, the little one gets eaten by the little one. And then the other one goes over there. And that's how that works. So from my perspective, when that good car gets put into a broader marketplace, whether you want to do with your little online thing, or you want to drag it to an auction Lane, the best end-user will be revealed. And that best end-user will not be a new car dealer. It will be a non franchised dealer that actually has his brain intact and knows how to take a little maneuver with that piece of merchandise. You see what I'm saying to pal?

Zach Klempf:  I do, Bob. And last question. Let's say you're a small to midsize used-car

Bob Hollenshead:  Wearing ya?I know I'd wear you, I knew 

Zach Klempf:  No, no, no not at all. I really enjoyed this. So last question, though. If you're small, mid-size used car dealer, you're listening to the podcast? What advice would you give them in terms of how they should think about buying and holding used inventory in this market?

Bob Hollenshead:  If anybody buys and holds, right, don't take their check, because their heads up their backside. Because that didn't start this week, last week or the week before because you bought it, it's time to sell it. It there's there's no reason ever, under any circumstance to think that you're buying something in order to hold it. Your first profit is 99.3% of the time, your best profit. These are words that come from, I would say experiential circumstances of 3 million purchases and sales. I would say it's one of the best times of my from my perspective to be in the used car business. So I congratulate you. My biggest, I would say advice if anybody would ever think of taking a fat irishman's advice is you get up early, go to bed late. Pay attention, just like any good drug dealer would on his corner, the circumstances around you. So nobody can hit you with a sucker punch. Pay attention, never let your guard down. Use your brain in terms of who you're buying from. And when you're buying what the pedigree of a car once again, why our tool set. It's very inexpensive, and it's very useful. It was built by us. For us. That's not a cliche. It's built by a car dealer, specifically for people like us the same type of circumstances, whether it's wholesale or retail, because we reveal where it's been how long it's been there who owned it previously. So now we know if it's cat or dog even though it's dressed up to be a mink, right, we can understand the category of car that it's in. So you can understand if you're going deeper. Or if you stay shallow. You go deep because of course got great pedigree, you're going to make a friend when you sell the bitch. You say you're not going to sell it because you put lipstick on it and lipstick falls off and you catch AIDS. You say in other words, the things that are necessary for smart buyers to understand what they're doing not random shooting, you know, over your shoulder hoping you hit the bullseye. All of the things necessary I think we're in a position as used car dealer brain going nowhere. If franchised dealers disappeared because they're going to sell cars directly to consumers, what they don't know what to use cars and franchise dealers. They have things they got issues, they got all kinds of shit, they got to worry about that. A non franchised dealer The only thing we got to worry about is our wits and our will to get up and not have our SSP but to beat other assets, if that makes sense to you. Exactly. You know.

Zach Klempf:  Makes perfect sense and also curious what are your thoughts on digital retail it's become like a hot topic over the past couple of years.

Bob Hollenshead:  No more car dealer beep beep. Get rid of that lioness car dealer beep beep. Now come to my auction and buy cars. So you're gonna need some reparation there, you follow me? But if anybody's saying We'd be where we are without beep beep get rid of that dirty rat car dealer Carvana. See, if somebody thinks that from didn't have no no impact, that's purely to Garcia's, they did an unbelievable job of scaring people, everybody into the nonsensical bullshit. If the customer hates us, they don't want to come see us, we gotta drop it off in their bedroom, and just some good night or they're gonna hate us. You know, it, we've gone to the opposite end of insanity of extremes of that, I think it's great that you can get everything done online, as somebody shows up and on occasion, they disappear because they hate us, we got bad breath, we're ugly, all are at, you know, I ain’t 100% sure that that's all true, right? On the other hand, of course, let's be prepared and use accurate trade in order to do your evaluation and the transparency of helping the communication and all the rest of it, I get all that. But I think we've exaggerated at the point of ad nauseam, let's put it like that. And then we're gonna keep going in that direction. And I guess there's nothing wrong with it. There's lots of benefits to it, I guess. I just, I'm not 100%. Like, if I'm being honest with myself, that it's the the end all that car dealers, you're not gonna have showrooms, or we're not going to want to have a relationship with the salesperson or the manager. And that it's like the worst place you ever stopped into, you know, I mean, I've been at pet stores that are scarier to me than a car dealer. You know what I mean?

Zach Klempf: Bob, and really appreciate you coming on the podcast today. It's been an excellent episode. Tons of knowledge for the dealers out there. So thank you so much.

Bob Hollenshead:  You got it my brother anytime.

 

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