Absolutes are a powerful tool toward creating a disciplined organization.

The down side of absolutes is it chokes off the potential to have an acceptable exception.

Exceptions break the rule of discipline. Exceptions soon become the norm.

When exceptions become the norm chaos breaks out. The type of chaos I’m referencing isn’t actually like a bomb going off. This chaos is slow and gradual, often not recognized, and then – whamo – there it is, its ugly face screaming at you, “What the heck happened?”

Now here’s the real deal for those of you looking to become better leaders. You can have absolutes and exceptions in the same house. They can actually hang out with each other once in a blue moon.

True leaders can use them both and chaos will never show its ugly face. Granting an exception and going back to absolutes is very doable. The problem with leadership is that very few leaders have the skill to make effective use of them both.

Most people in leadership positions are stuck with one or the other.

At any given moment one is just as bad as the other. That’s all I’m gonna say, Tommy Gibbs

Dark Corner Inside Your Brain

I frequently write articles trying to get you to take certain actions in order for you to avoid having aged inventory.

The more I study the subject and the more dealers I work with, the more I become convinced that there’s very little money being made on anything over 30 days old.

The biggest problem with aged units is the impact on your ability to sell cars today. Nope, I’m not even talking about your ability to price and sell the aged units. I’m talking about your ability to trade for more vehicles as you work new and used car deals.

When you have aged units, there’s a little voice deep inside the dark corner of your brain saying, “Hey, be very careful, don’t step up too much on that trade. Bossman, you’ve got a bunch of other issues out there on the lot and if you step up on this one, you’re just creating more problems.”

It’s not just that you can’t make any money on the aged units; you can’t sell fresh units or new units because your existing inventory keeps your brain all twisted up.

Keep an eye on that dark corner inside your brain. That’s all I’m gonna say.Tommy Gibbs

The Word Every

I love the word every. Even though I love it I find it to be one of the most abused words in the English language.

There’s only one definition for the word “every.” It means without exception. No exceptions!

A few of the abuses:

We will do a trade walk every day
We will re-price our used cars every day
We will attack our 10 most expensive used cars every day
We will press our cost down every day
We will do a lot walk every Friday
We will make sure every customer is properly greeted and logged
We will present the menu to every customer in service write up
We will TO every customer to the F&I department
We will answer every phone call in the parts department by the 3rd ring
We will do a save-a-deal meeting every day
We will counsel sales people every day

I’m sure you can think of a lot more. I send you things like this “every” week to make you think.

That’s all I’m gonna say, Tommy Gibbs

Bring It On

I often have conversations with dealers and managers about units they have had in their inventory too long and/or those vehicles that might be in the $25,000 to $35,000 range.

I question whether they are profitable or not. For those managers who want to keep units until they can retail them I sorta agree in that I’d like to see you retail them, but faster. I hate dumping retail pieces in the wholesale market.

I’m convinced that keeping them past 45 to 60 days doesn’t make you money unless of course you make a killer gross. I’m also convinced that the longer you keep the more expensive vehicles, the further you erode your profits unless of course you make some awesome grosses which isn’t too likely.

So, here’s the deal…if you disagree with me “prove it.” Yep prove it. Start tracking the ROI on any unit you retail over 60 days old and any unit that you have over $25,000 in.

Come on, bring it on. Prove it to me. Prove it to yourself. Remember when calculating ROI, the standard is to use only front gross and the sweet spot is 110 to 120%. You can use my ROI calculator. Go to FixRoi.Com.

I’m looking forward to you proving me wrong. Bring it on. That’s all I’m gonna say. Tommy Gibbs

Who’s Following You?

One of the unique characteristics of a true leader is they are always going somewhere. Their eyes are not just looking over the end of the front bumper, but miles down the road.

They know where they are going, but at the same time they are keeping an eye out for those quick detours.

That’s a small piece of the story for a real leader. A real leader is able to convince others to follow him/her. They don’t do it by yelling and screaming “come follow me,” but rather by the examples they set that cause people to want to jump on the train.

One thing is for sure. If you don’t know where you’re going it’s a safe bet that no one is following you. That’s all I’m gonna say. Tommy Gibbs

Improving Gross Profit Part 3

The final in a 3 Part Series.

1. Think in terms of improving gross in small increments. Try paying the managers a bonus for achieving nominal increases each month. Start by improving gross by $50 a unit. Do that over the next year and you will see a slow and effective way to increase your gross. You can only eat the elephant one bite at a time.

2. How could I talk about your grosses without mentioning “Life Cycle Management?” Life Cycle Management is designed to help you create a sense of urgency on those cars that are most likely to kill your grosses. The faster they go away the better your gross will become.

3. Track GAP and ROI. When you do, grosses go up. How much are you giving up once the customer shows up at your store with a price from the Internet? If you don’t know then you can’t fix it.

4. Are you stocking the wrong stuff? If the data tells you there are a lot of Impalas being sold in the market then it stands to reason that there must be are a lot of them for sale? And wouldn’t it be logical to assume that it will be hard to make money on those units since there is a high day’s supply? When it comes to making gross, the law of supply and demand is certainly in place. You don’t have to be an economics major to understand this fundamental principle.

5. Shoot the moon on the right stuff. Since the beginning of the car business, higher grosses are driven by some home run cars. You have to understand which ones are home runs, singles, doubles and triples.

Fix what you can fix. That’s all I’m gonna say, Tommy Gibbs


I’m often asked what it takes to be successful in the automobile business. The formula for success in the automobile business is no different than it is for sports, the arts or any other business.

Three key words: Study, Practice and Experience.

Of course there are other personal traits a person needs to have in order to maximize success, but without these three you will always have limitations.

Are you a student of this game? How much time and energy are you dedicating to knowing all you can about the industry, your market, the competition and what the best of the best are doing to get better?

Do you practice? Silly question huh? How many reps are you getting? How many times in a given day are you practicing your craft? Your craft might be working deals. Your craft might be in F&I. Your craft might be managing the inventory. Your craft might be dealing with customers and employee challenges.

Are you getting experience? How about the right experience. Are you working with people who are lifting you up rather than pushing you down?

Even if you’re getting some bad experience you can make that work for you. Sometimes it’s as important to see the wrong way of doing things as much as seeing the right way. The key is to mold your experiences into being a better you.

You can’t become a better you unless you have sense enough to know the difference between the good and bad experiences you are having.

You become a better you when you lead the team with Study, Practice and Experience. That’s all I’m gonna say, Tommy Gibbs

Improving Gross Profit Part 2

A three part series on improving gross profit.

1. Can you reduce your recon cost? Are you being as efficient as you can possibly be? Does service have carte blanche? Is service still selling the used car department the same old same old?

2. Can you speed up reconditioning? Very few of you really know how long it takes to get a car through service and clean up. Is your sales management team constantly crying about how slow service is? Might be some truth to it. Check it out. “It’s not the big that will eat the small, it’s the fast that will eat the slow.”

3. Re-evaluate your packs. Have they outlived their usefulness? Are packs ultimately affecting your average gross in a negative way? Are they giving you a false picture? Dale Pollak refers to packs as taxing yourself. I think we are all taxed way too much.

4. Have you made an all out effort to convince your sales and management staff to sell the value of your company, your product and the fact that you have the best prices in the market?

5. Re-think what you are stocking and the when, how and how often you tweak your pricing. Far too often prices are not massaged soon enough so you end up pricing your cars at the end of the cycle at crappy grosses. I suggested in a previous newsletter that you go back and review your grosses by age categories. Have you done it yet? The aging units you are selling are killing your grosses.

There are many parts to improving gross profit. Look for Part 3 next week. That’s all I’m gonna say, Tommy Gibbs

Are You Tough Enough?

“Marshall and His Generals” is a biography of General George C. Marshall and how he shaped the U.S. Army generals during World War II.

To quote from the book: Marshall could be pitiless in relieving generals, especially those who were too old or too slow to adapt to the war’s brutal pace. His ruthlessness spawned enemies at the Officers’ Club, in Congress and in the hierarchy conscious world of military wives, but Marshall prided himself on remaining objective. As he told a gathering of governors in 1943: “The man has to have it or he doesn’t stay. And we listen to no excuses of any kind.”

There comes a point in your life or business career when you need to show some real spine. Show some real toughness. You need to jump up on your desk, rear up on your hind legs and be counted.

You’re running a business. You’re not running a democracy. It’s time to take a stand. If you’re allowing yourself to be pushed around, manipulated or if you’re just being weak and not making the decisions you know you need to make….then stop it.

Get tough. That’s all I’m gonna say, Tommy Gibbs

Improving Gross Profit Part 1

Just the other day I was having a conversation with a key manager of a dealer group whose dealer was beating him up pretty badly about his average used car grosses being so low.

Like many dealers, the dealer has either seen numbers in his 20 group or heard of dealers doing big averages. Dealers will often say that they have dealer friends doing as much as $3,000 and higher on the front.

Achieving $3,000 on the front is easy enough to do. It really is. You can do it overnight. Yes, all of you can. I believe in you and I know you can do it.

When dealers are screaming about low grosses they often point to the fact that their cars are priced too low on the internet and therefore the easiest solution is to increase the prices.

The fact is you can improve your grosses dramatically overnight by increasing your prices. I mean really if you don’t ask for it how do you ever think you will get it? Remember you can always go down but it’s impossible to go up.

Yep, that works for me. Raise your prices, ask for more and you will get more. Gross has always been a state of mind. Whatever mindset you are in then you can achieve it.

So, right now, right this minute, right this second, all of you need to stop giving your cars away, raise your prices and the grosses will go up.

Oops, there are a number of little problems with raising your prices.

1. Your used car volume is going immediately in the tank.
2. Your total gross is also going so far south you will lose your butt.
3. Your profits are going to be pooh pooh because you have totally cut off the spigot of cars going through service.
4. New car volume will go into the tank because you are reluctant to step up on trades since you need to steal them to make gross on.

I’ve said this before and I’m going to say it again, doing used car volume and achieving high used car average gross goes against the laws of nature. I’m not saying you can’t improve your grosses, but the days of doing $3,000, $2,500 and in some cases $2,000 are history.

Your best opportunity to improve your overall business is to improve your volume. Improving volume improves business in all your departments.

You can’t spend average gross profit. You can spend total gross profit. That’s all I’m gonna say. Tommy Gibbs