MADE stands for many things among which is the
mathematical equation that equals common sense. Being from Philadelphia I
always like to make reference to our founding Father B F since we are defining
acronyms Benjamin Franklin who edited TP, Thomas Paine’s work that defined
society and government has different and distinct functions/roles).
The conclusion as it turns out made common sense. You stay in your swim
lane and I will stay in mine, more or less.
MADE confronts a number of issues with the conclusion
equaling that of BF and TP, i.e. common sense. In the case of MADE it
involves a longitudinal study of five decades. A little overkill, I
understand. Some of those decades more intensely involved in hand to hand
combat, pricing and selling a few million cars. Other decades, in
particular the current one, focused on the possible. This required a
careful objective scrutiny of the status quo. Our conclusions will be
attacked by many…except for the car dealer, the guy that makes the wheel turn who
has skin in the game balls deep and sees for the most part, no solution.
This is why, as sorry as it may be, folks have eaten a bit of the lunch that
isn’t on their side of the table.
As BF and TP clearly state, part of human nature and the
beauty of the human spirit is that adversity has been and will always be the
mother of invention in conjunction with the basic unalienable rights that TJ
(Tommy Jefferson) so clearly identified. MADE is the solution we
developed to our perceived adversity.
The following not so brief recollection of the past few
decades meant to be semi-comic and unfortunately is semi-tragic. It does, however, support the common sense formula
used in MADE and touches on how, when, and why common sense was abandoned
sometime in the early part of the last decade when dealers were taken for
granted as if we were a given as there was no tangible alternative. So
please stick with me working through the premises for the formula. I have
no problem counting, even compound fractions, but when we get to formulas I
have to slow it down. There are decades of pluses and minuses here so
stick with me.
1955-1969: Anything goes, clock any car with impunity,
no computers, everyone knew what was happening, not even embarrassing to crank
it back to zero, in fact nearly all cars were whacked. All demos
were definitely spun back to zero. Glaves comes to the market on Jerome
Ave and becomes the Bible of Vehicle Valuation, a guy can’t leave home without
it. Auction sheets are irrelevant even though the auctions were on fire,
tons of action and any metal could be turned to cash no problem. An auction
fee to sell is $7.00, and to buy, $12.00. What a great place to do
business. Most used car managers were on the shmear, some were half backs
($50), others full backs($100) and many that were very close to the owner would
demand a $200 boff and that came with a full guarantee that the miles on the
title and mileage certificate would stay wide open (making it much easier to
crank the speedometer). Any one denies it is full of horse manure.
I tell you this with full respect to transparency (where we are today).
Newspapers are the only way to advertise cars.
1969-1979: Auction fees skyrocket to $15 per car.
There was one gas crisis after another in ’73 and ’79. Still no
computers but for the first time in 1974 a mileage certificate emerges, and
pretty much ignored. Galves is still king to the point if you left the
house and drove 30 miles you would turn around and go back to get it.
Auction sheets become relevant and indeed are the forerunner of MMR. Stamped books
made a car worth more money so most intelligent dealers had stamps available to
create a very good pedigree of a car. It is also the time period when
banks required a box to be filled in with the race of the person you were
filling the credit application, a 1, 2, or 3. Once again, this in the
spirit of full transparency. Ford C4 transmissions were the
worst. All Toyotas rusted off their frame sitting still. Newspapers
are kings of the world due to car dealers spending nutty money on adds. One out of 50 cars are arbitrated, rarely
does the sale get negated, it’s usually $100 adjustment.
1979 - 1989: Computers just begin showing up, clocking
is ramped. Auction groups are formed and begin buying up what were
previously family owned sales. Fees start getting higher and I never
really got an answer to the question why they charged a fee for not having the
title. In other words. I paid for a car, sold it, the auction got paid, I
didn’t, and yet out of the sky, I got charged for that. Can anyone
explain that to me? Please? Is that the beginning of I charge because I
can and the dealer can pound sand as where else is he going to do business?
It is also the period of time when dealers got convicted for
crimes related to spinning odometers like mail fraud, interstate laws and
forgery but not for actually cranking the car as that was very hard to
prove. Front wheel drive is here and CV joints are the first thing to be
a real issue in Arbitration before it turned into sale prevention. Any GM
front wheel drive car could get turned down for a CV joint clicking. GM
V-6s might have been the worst motor ever built. Datsun’s rusted faster
than Toyotas. The difference was that the Japanese stood behind their cars and
GM in their arrogance didn’t. Ralph Nader figured that out and trashed
the US automakers for which we are suffering until today. Just look at a
picture of Hiroshima in 1948 and look at one now. Than look at a picture
of Detroit in 1948 and look at one now. Arrogance leads to
disaster. I state this all in the spirit of transparency and explaining
the formula for MADE. Galves was still king. Leasing blew up
in 1986 and everyone driving a Pinto or Vega Can now drive a Mercedes. Clocking
as an institution ends in 1986, we all catch amnesia and act like it never
happened. Very odd if you think about it. It is like talking
about a retarded sibling or something, pure amnesia like it never happened.
Newspapers are still king and just ask them, they always will be.
1989-2008: Lease volume drives everything.
Computers are changing everything and the auctions completely forgot who a
dealer is. He is like the tires on an old car. You don’t need to
check him, who cares if you smack a curb, piss and complain if he needs air but
take great care of the fleet accounts. Charge them nothing, put it all on
the dealer, he has no voice, screw him. Make up policies that cripples
the dealer, who cares. When I first told the Greg Gehman who was running
a big auction to charge me more when I sell a car on simulcast because I wanted
to be sure that when the dealer got the unit off the truck and saw it for the
first time we would have an escrow account to throw at a disgruntled buyer to
keep him happy. That got misinterpreted as an invitation to create a new
profit center, skip helping the seller or the buyer. Now it is
institutional, the status quo that you get gaffed for selling a unit on line or
buying one. Can anyone explain that to me, please? Pretty
Please? More Wall Mart action in the buying and selling of auctions and
the result is no personal attention and any questions are answered with zero
common sense as “well that’s down from corporate”. Can anyone tell me
what that means, Please? I am only asking this in a true attempt at transparency.
MMR is now taking over and Galves is still there, but less used.
Younger people don’t understand how to use it and it is easy to see the green
on in MMR and trade the bitch for that while we forget that it isn’t free to
get that value, right?. Wooo. Massive numbers of lease returns are
coming in. Lease accounts are king,
dealers are toilet scum. Think about it
and don’t lie. Is this transparency or
not.
Newspapers are in a world of poop with a wave coming, the
internet is here and it isn’t going away. We are selling cars on Ringman
simulcast, what’s this world coming to? But it will never be more than
10% of the business (really?).
2008-present: Used car managers have a college degree,
BDC department is an acronym everyone understands, there are methods of
understanding how to price a car in order to sell it quickly, buy low, don’t
get emotional, sell low, do it fast, stay unemotional, I don’t need to tell you
about this time frame as most all of you have been here this long.
Simulcast is kicking ass if you have merch, every week, arrange it correctly,
tell the truth as best you can, but now we have new competition to the
auctions. It is static listing services with all sorts of variations of
BUY IT NOW, which never get out of the 15% conversion range and they all have a
cumulative cancerous effect on the live auction lanes. What happens
next? Skyrocket the fees, find new ways to make a transaction cost a dealer
more than he nets on the car he sells retail. The folks at the auction
find in normal to ask a seller for a $500 adjustment for a title being a day
late. Why not, it isn’t their money? But
think about that coming from someone’s mouth.
Is that common sense? Policies from Mars are a regular occurrence in
order to make the post-sale prevention process seem like it has a raison
etre. I could never understand how or why they never ask a dealer’s
opinion before you smash him with new “policies”. Call a PDR hole unibody damage, while a car
that has a dent on the side of the quarter panel isn’t unibody (same unibody,
how do we lose sight of common sense?). A unit with an aftermarket sunroof cut
out of the unibody isn’t damage but a PDR hole is? Turn down the “all of
the week” like pixels on a radio of a junk car or maybe a “catalytic converter
rattle”. I’d get 4 in one week and never
had one before and never had one after, odd. Newspapers are not even good
for firewood kindling (not thick enough) as the internet is king and not going
away. So all of that to get to this.
We are not going away either, are we?
But this is it:
MADE = (Merch found nowhere else in ass for every seat volume,
just don’t mix it up) + (next to no fees) X (total transparency price/condition that
guarantees high conversion) X (enough volume to bring eyeballs) + (all arranged
in logical order) > <100% conversion under the hammer X (now, not buy it
now for $1,000 over retail) X ( a forum for real buyers and sellers that simply
want to do business) – (nit picking mooches looking to shmeak at every turn) =
Common Sense and that is the traders definition of MADE.
If you MADE it through that I have more to come
tomorrow.