Mark Beneke is the co-owner and acting sales manager at Westland Auto Sales in Fresno, California.
He bought his father out of the business in 2015 and runs a “buy here, pay here” model.
He brings in upwards of $500,000 a month. Here’s his story, as told to freelancer Kim Dahlgren.
This as-told-to essay is based on a transcribed conversation with Mark Beneke, a 30-year-old car dealer from Fresno, California, about his business. It has been edited for length and clarity.
Alongside my brother Eric, I own Westland Auto Sales. We took over the business in 2015 and have grown the portfolio by over $1 million this year alone to a total of $5 million (it was $500,000 in 2015).
I was born in El Salvador, but in 2000 my family immigrated to the United States in search of the American Dream
My father started Westland Auto Sales in 2007, which he owned and worked at until my brother and I bought him out in 2015.
Our company is different from traditional car dealerships in that we’re a “buy here, pay here” dealership, which means we don’t finance our cars through lenders but in house. Using this model means a higher return on investment, but a somewhat riskier business due to the type of clientele.
For the past five years, I’ve been the acting sales manager
Each morning begins with a meeting that includes our sales team and lasts anywhere from 15 minutes to an hour, depending on the day. We disperse any leads and finalize the paperwork for any deals we have pending.
Because we do all of the underwriting in house, we have to evaluate each customer based on income and other contributing factors. From there, we make sure the sales team is taking calls with customers, greeting them in store, and leading them through the steps to buy a car. We have about 15 employees (up from seven in 2015), with four currently in sales roles.
One of the reasons we’ve been successful is because we’re able to differentiate ourselves – we never try to compete with bigger dealerships or those that work with lenders
We’re trying to become the best buy here, pay here dealership in our area.
With the buy here, pay here model, our clientele tends to be lower income or people with poor credit scores that can’t get a loan anywhere else. We treat our customers like people. To us, they are top-tier clients. We care, and they see that.
We also provide a free warranty for customers and start with down payments as low as $500 – many in-house dealerships in the area don’t. Other buy here, pay here dealerships require 50 or 60% down and sell older cars with hundreds of thousands of miles on them. It’s a “bleed” model – you’re bleeding the customer for everything they’ve got. You don’t care whether they come back. We wouldn’t feel good about running our business that way.
Our primary method of acquiring inventory is going through retail auctions, which are only available to licensed dealers
We also take trade-ins, though the supply-chain effects of the pandemic have impacted our business, too.
Pre-pandemic, we’d buy around 15 cars per week to sell on our lot – now we’re purchasing about three. The prices have also increased across the board. What you might have bought for $10,000 a couple years ago may be closer to $13,000 or $14,000 now.
Once we identify and purchase the vehicles we’re interested in and those that fit the criteria of what we sell at the dealership – family cars, SUV’s, sedans, and trucks – we bring them back to our in-house shop to do a safety check. We fix up those that need it, then put them out on the lot for sale.
How many cars we have on our lot depends on the time of year
Near the end of the year we stock up on new inventory for tax season, our busiest time of year. When people get their tax return, the first thing a lot of them want to do is buy a new car.
At the start of Q4, we’re usually sitting on about 100-120 cars. By January, we may have 130-140. But by May, we’ll be back down to 70. Right now, because of supply-chain issues, we’re about at 70 right now.
Even so, we’re currently focused on increasing sales. The amount of sales we average per month is about 35 cars for the entire dealership, which puts us at a good increase on our portfolio already. We recently increased our “quota” of car sales per month to 42, and so far we’ve met our goals.
Our average revenue per month is upwards of $500,000
And aside from having to close for a month or two in the beginning of the pandemic, we’re seeing the same amount of buyers now than we were pre-pandemic.
In July, my brother and I recruited two new hires to take over our front-facing roles at the dealership. While we’re still involved in the day-to-day, we focus more on the backend of the business – growing, with the ambition of opening additional locations.
Working with family is great because you know you have somebody you can trust
You can depend on them to pull their weight and follow through. You know the way they work, and you have each other’s best interests in mind. And even though we’ve had our disputes, we’ve always been able to settle it really quickly. We understand and respect each other’s roles in the business.
And although we’ve created a great business, after working in the car industry for over a decade, I can say that a car is just transportation. Luxury vehicles – while gorgeous – are just the same as a little Chevy Sonic. While we still get excited about certain vehicles coming into the lot, cars don’t wow us anymore. Still, we can’t wait to see Westland Auto Sales grow and expand to serve more people.
Read the original article on Business Insider