I used to work for an Auto Dealership in 2012 before I started my Real Estate Investing Career. When I worked in that industry, I became really good a selling and closing transactions. The training we had was second to none. The dealership bought an auto sales training course from Grant Cardone before he was one of the top motivational speakers and sales trainers in the United States. I remember one Saturday we sold 25 cars with just 5 sales people. that was the most in the State! The training was one thing out of a few that I enjoyed in that dealership. I really learned a lot and had the mindset that I could use this training in business.
Even when I was working for someone else, I always had the mindset that it was just temporary, so I learned as much as I could in the Auto Industry. The main thing I learned was how the Business worked. I worked for a Full Service Auto Dealership. They had systems for everything. Sales system, marketing system, repair systems, maintenance systems, funding systems, parts systems, and so on. When a customer bought a new car from us they were now part of the family. They bought the warranty, got financed, maintenance service, car wash, and parts whenever they needed some. The Dealership had everything a new car owner would need, so why would they go anywhere else?
A Full-Service Dealership makes money many different ways, not only selling cars. They have to have different revenue streams because the Auto Industry as a whole does not have good profit margins. They make less than 10% profit on every car they sell. For example, they buy a car at a wholesale price from the manufacturer for $20,000 and then turn around and sell it to the consumer for $22,500. If you understand business, these are not very attractive numbers. So because the margins are extremely low, new auto dealerships have to sell in volume, meaning they have to sell more cars so they make their money. If they sell fewer cars they would not make much money because they would only make $2,500 per car.
along with making $2,500 per car and selling 50+ cars per month, they understand that same customer will need to get financed for that car, get that car maintained and serviced, get a warranty for that car, parts for that car, and also buy gifts that are related to that car. This is the same thing department stores do. For example, when you buy shoes at a shoe store, they offer you socks, shoe cleaner, and water repellant spray, which will benefit you, and you will probably get these items, but why not get them from the same place that earned your business?
Learn more about the Full Service Auto Dealership below
What Is A Full Service Wholesale Business?
I came up with the term of the term "Full-Service Wholesale Business" about 2 years after I got into Real Estate Investing because I noticed I was solely relying on Deals to pay the bills, which they can but I was not doing a lot of deals. I would do a deal a month or sometimes not even that, so if anything went wrong, like the buyer backs out, seller complicates the sale or title issues, I would not be able to make my office rent on time, or pay my operating costs on time. That is when I remembered how the Auto Industry worked. I never relied on one car sale, I always had to have other deals in the works. The motto back then was " for every 1 deal you are after, have 10 deals working, so you can close multiple deals per month."
When I developed that mindset, that is when I started doing multiple deals per month, and then there comes a point when you have to outsource some of the "hats" you are wearing. In the beginning, I was the Owner, CEO, Acquisitions Manager, Marketing Manager, Office Manager, GSM, Bookkeeper, Inside Sales Manager, and so on. Now I have outsourced more than half these positions and all by next year. This takes some time but you have to always start your business with the end in mind.
Outsourcing with virtual assistants and regular employees is key in this business if you want to make money and also have freedom to spend doing what you want to do in life. Another step to a Full-Service Wholesale Business is having different streams of income within your Wholesale Business. The reason this is important is because you want to be able to not just rely on one income source because if you are not doing multiple deals, your going to have a cash flow problem. Having multiple streams of income helps your cash flow problem while you are waiting for deals to close. The more deals you have in the pipeline the less of a cash flow problem you will have.
Different Streams Of Income In A Full-Service Wholesale Business
Full-Service Wholesale Business Video
Full-Time Wholesale Business VS Full Service Auto Dealership
A Full-Service Wholesale Business can be way more profitable than a Full-Service Auto Dealership Business. This is because it doesn't cost anything really to start one, Marketing costs are low, overhead is low, profit margin is extremely higher, the demand for deep discount properties exceeds the demand for cars, scalable nationwide, and it's the backbone of all Real Estate Investing because Real Estate Investing Starts when you have a deal to invest in, and Wholesaling focuses on doing just that, getting deals.
Wholesale VS Auto Dealership Video