Thursday, August 9, 2012

The one(s) that got away!

As we've been watching the Olympics this last few weeks, we're present to performance at it's highest level. We can define performance as action or inaction. As we watch sprinters off the block it's easy to see the action, running fast, faster, and fastest. What's not as easy to see is the inaction; being locked and loaded on the block, not moving until the shot … tha't as much performance as the action of running.  

Since my last blog post I've replaced the engine on the Jeep GrandCherokee and made the sale to Casey, my first customer. Needless to say, we'll hear from him later with glowing customer service reports and, I've been to weeks of auctions not buying anything. At first, I was disappointed and left feeling ineffective. Why, after seeing all these cars move through the lanes, I wasn't able to make a purchase? That's when it hit me, performance is action and inaction, sometimes what we don't do is as important as what we do. I return from each auction and review the list of cars I was interested in, look at the amount of the auction bids and track the trade-in and resale values. Which vehicles will move through my hands quickly and which will wait for an owner for weeks or more? What's the ideal difference between the auction bid and the final sale price? I have to account for my overhead and the improvements I make to each and every car in the inventory. That's when I began to see where I'm not a babe in the woods, I actually have a sixth sense for when to act and when not to. I could begin to see my inaction as performance. 

Then, yesterday came. I was at the quarterly BIG auction in Auburn. Over 2,000 cars to choose from on 9 lanes of auctions going on simultaneously. it's a beehive of sales activity, my estimate is between $4-5M in gross sales per hour for nearly 3 hours.  Surely there would be a single car for my new fledgling dealership, for the market I serve? I patrolled the lists, the upcoming cars in the lanes and the lanes themselves. I was attentive to the 'red light' and my spreadsheet of recent auction activity. Some bids ranged in to the 'too high to consider' regions - some vehicles in range are too far gone in other words, no 'curb appeal'. Some had me frozen on the block ... I didn't bid (didn't run when the gun went off) when I could've. Inaction wasn't performance!  Then I saw it, a 'Creamsicle-Cream' colored beauty, a VW Beetle GLS Convertible, it had a dark brown top, two-tone goodness together with the paint. Its' aftermarket chrome wheels glistened even in the indirect sunlight, the whole car luscious and cute as, well, a bug! A 2003 with only 75,350 miles on it and it's a 'green light' too, I can have it gone over for any major defects and get a clean bill of health. I can't lose right? I bid at $6K and the bids keep going up. I hold fast. It gets to $6,600. and I haven't bid up, I refuse to gesture and somehow the auctioneer drops the price back to $6,500. and I jump, SOLD!  It  rolls out in to the bright sun, a dazzling ghost until it's real again. 

I hike it out to the parking lot to find the VW in its assigned spot. It's a mile away and it's as beautiful and shiny as I thought it was; real again to my eyes. It's sandwiched between lesser cars and no point taking a picture. All there is to do now is hike back and do the paperwork, authorize the mechanical inspection of all major systems and get the VW delivered with its clean bill of health. 

Not so fast. The call comes the next morning, the airbag light is on and this can be an issue within the $500. window (I'd have to accept) or if more, I can negotiate with the seller to make the repair on site or, I can retract my offer. A few hours later, it turns out to be the latter case, almost $1K of airbag technology to repair.  I chose to retract the offer. Yes, I was happy to make the purchase and knew the VW would make someone in my world very happy, however, the margin for this car was lower than expected, and I'd still need to make some minor cosmetic improvements. Now a repair needed to be made after a negotiation with the seller and that all takes time. Timing is everything when marketing a convertible in Seattle :) and that's time I could use to make another purchase.

Inaction, not buying this car is performance yet, I don't feel any elation! I have no photo to post to my web site, no exciting conversations to have with people and no possibility for revenue this week. Even so, I know the performance here is experience and increasingly, every automotive choice I make going forward will be valuable for each new customer and move Access Motors forward! Forward off the block and running the split second the gun goes off - BOLT!!  

Thursday, June 28, 2012

I'm brand new!

I'm new. I've just been licensed to be an "auto dealer" by the state of Washington. Next up, register for the auctions and learn the ropes. Went to 3 to 4 auctions and stood around taking in the seemingly endless rows of cars making their way through the "lanes". Each has an auctioneer, from start to finish; each car is done in about 90 seconds. Yes, the auctioneer is a cliché, I understood perhaps every 5th word and lots and lots of turkey warble, imagine a confident Ralph Cramdon, "hmmm n aaaa, hmmm n naaaa, hmmm, n naaaa, greeeaat leather interior and SOLD"... and even worse, 6 - 10 lanes are going simultaneously. I really had to position myself to screen out the noise, warble from adjacent lanes is chaotic. It's not for everyone!  

Then I took the leap, I raised my hand on a 2004 Jeep Grand Cherokee Limited, high mileage but what great condition, leather, moon roof, tow package and power everything! The bidding was at around $3,000 and it didn't last long. I made a mistake. In my haste to get in the game I didn't notice that the "red light" was on. The red light means the condition of the vehicle cannot be guaranteed, there's no "arbitration" option available. Normally, when this is available, you can pay a small fee for a mechanic at auction, post sale, to inspect and issue a report on the car's major functions. This both, guarantees the condition of the car when purchased and, if there is a major problem, has you able to work it out with the seller. Either they'll take the vehicle back or reduce the purchase price.  However, 'red light', that's it, you're taking your purchase "as is" with no guarantee of anything. 

I'd sworn I wouldn't buy 'red light' without a lot more experience and here I was owner of a 'red light' Jeep Grand Cherokee discovered post facto. With apprehension and excitement running through my veins, I reassured myself it would work out and made arrangements for the Jeep to be driven to my mechanic for my own post-sale inspection.  It never made it. I got the phone call in the afternoon and, because it had overheated a couple of times, they would tow it to my mechanic the next day. Uh-Oh, could be minor and it could be major, time would tell and time, when your dollars are locked up in inventory, is important. It would all work out. 

My mechanic, John, was sanguine about it, not a big deal for him and so I stayed calm. The next day John called me and said he had bad news and good news; the bad news is, a blown head gasket. He'd say the retail cost for the repair was close to 2K and he'd be willing to fix it for a little more than half to get our business relationship started and sensitive to my "virgin status, would be gentle", thank you John. Then, he said the words, "my friend Derrick has been looking for a Jeep Grand Cherokee Limited for a long time, he came and looked at it yesterday and he likes it".  I couldn't believe my ears. Since he's able to fix it himself, he'd rather have a price without repairs. I wouldn't have to fix it, advertise it or worry about it! Through John we settled on something fair and, the next conversation went something like this, "Well, my friend Derrick is a base jumper, he just jumped off a high torsion power structure and the wind blew him back in to it. He dropped about 50 feet and he's in the hospital with 2 broken ribs and a punctured lung". I heard myself shout out, "OMG, is he OK"? And John replied matter of fact; "He's still interested he just has to get out of the hospital to work out the logistics". So I waited. And, not surprisingly, after a few days, John reported that Derrick's wife cancelled their upcoming vacation and facing medical bills, declared Derrick insane and forbade him from buying the Jeep. This business is going to be exciting!

John is fixing the Jeep and after repair it's gonna' rock since it's really solid in all other areas, some lucky person will get a great price on a great vehicle. So let me know if you know someone in the market for some base-jumping equipment or a 2004 Jeep Grand Cherokee Limited?