When I’m in town I work out at a small 24-hour gym on Treasure Island in a little strip mall.

Three doors down from the gym is a real barbershop.

Looks and feels like one from yesteryear complete with the barber’s pole that can be traced back to the Middle Ages.

The other morning, I couldn’t help but notice the barber was sitting in his barber’s chair staring at the front door. Immediately it flashed through my mind that’s what I often see in dealerships today.

I see two types of people staring at the door.

1. Salespeople staring at the door waiting for that special up that the dealership has been so kind to advertise for. (Will we ever fix this?)

2. Management staring at two doors.

A. The old school door.
B. The you might fail door.

The might fail door can be pretty scary. Every once in a while, you walk over, crack the door, and take a peek. Your body starts shaking with fear because of what you’re seeing.

You’re seeing volume going south and of late you’re starting to see your front gross heading the same way. It’s interesting how quickly the market of supply and demand can change on you.

When you focus on your retail sales number over the last 30 days, you’re in much better control of the laws of supply and demand.

You’re seeing today’s pay plans not working, and you’re seeing today’s new hires leaving as fast as Superman and a speeding bullet.

They aren’t buying into your hours and your selling processes which aren’t much different than they were 25 years ago.

And, they hate your pay plan.

Aside from being prettier, the physical work environment is about the same. You still have desks and you’ve fancied them up by putting computers on them. It’s sort of the lipstick on a pig theory. When the customer walks in, they still see a pig.

You’re also seeing the approach of some of the public companies and bigger dealer groups by changing their hiring practices and hours and adding iPads, sofas, and kiosks in the showroom.

You’re starting to wonder if you’ll still be around 10 years from now.

But you’re making a profit so why change? You need to change while you can afford to change.

You’re sort of like that barbershop. The only thing that’s changed for the owner is the chair is a little different and there’s no strap to sharpen the straight razor with.

That’s a really nice chair you’re sitting in. Enjoy your seat.

That’s all I’m gonna say, Tommy Gibbs

P.S. It’s that time of year when you’re dealing with used car writedowns. If you are going to write down your inventory let me coach you through it. It costs you nothing for me to help you.

Don’t bother writing your inventory down.

Unless of course, you’re going to commit to some serious changes.

It’s not unusual at this time of the year for dealers to write their used car inventory down, take a big hit and a deep breath, and say “OK, done, let’s move forward.”

Many dealers lack the discipline to steer away from what got them there in the first place. Therefore, in six months or so, the owners are staring at the same hot mess they tried to fix back in December.

Used car managers and dealers fall back into the same old rut because of the fear of losses they will have by taking aged units to the auctions and dumping them.

It hurts me to say this, and I know it’s going to cause a few of you to unsubscribe from my newsletters but taking units to the auction and dumping them is just plain dumb.

If you thought enough of that 60-day old unit to bring it into your inventory as a retail piece, you should have been able to find a retail buyer for it at some number. There’s a number that every unit can be retailed at.

Therein lies the problem. You won’t retail it for what it’s actually worth, yet you’re willing to wholesale it for what it’s actually worth.

Hey Einstein, which way do you think you have the greatest opportunity to recover from a unit that was probably a bad decision from jump-street? Insanity.

The instances where you have to dump a previously assigned retail piece in the wholesale market should be very few. If you’re in the retail automobile business, then retail your units.

Yes, the grosses on all that aged stuff are going to hurt you for a while. Dumping in the wholesale market will hurt you worse. If you have a lick of discipline and stay with it, you will be fine and never, ever have another unit over 60.

My Life-Cycle management process gives you the disciplines and strategies that will keep you from saying, “More write-downs, here we go again.”

I’ve never met a dealer who has figured out the 60-day concept that said, “Geez, I’d like to go back to those days when we had units over 60.” I’ve met plenty of dealers that are disgusted that they have to deal with aged units and write-downs every year.

Enjoy your write-downs. That’s all I’m gonna say, Tommy Gibbs

P.S. If you are going to write down your inventory let me coach you through it. It costs you nothing for me to help you.

I’ve been guilty in the past of snickering when someone says, “We never miss a trade.” Everybody misses trades and if you don’t believe it, think of the deals you have made in the past where you stole a deal by stepping up. The same thing happens in reverse.

Keep in mind that you never really know what a unit is worth until you sell it.

That said, in the last 6 months or so I have to say that the majority of the dealers are working hard to step up and capture anything and everything that shows up at their front door.

Even so, dealers are still running short on used inventory and still missing opportunities.

Every week my senior software engineer and I discuss how we can come up with an ingenious way to help dealers find more used cars. We know that if we could, we would knock it out of the park and dealers would be standing in line to do business with us.

Since we’re not quite there yet I have some suggestions for you:

1. Set up a temporary buying center at a remote location such as a mall, strip mall, or a vacant piece of property for a weekend. If the laws permit, put it in your competitor’s backyard. Since you’re not going to be selling cars at this temporary site, I’m thinking you’ll be legal in most states. Put up a tent with banners around it that include “Free Written Appraisal in 15 Minutes.” Or better yet, if you have a box van, put some signage on it and get to work.

2. If the temporary buying center works well, consider setting up a permanent buying center. Sure, the issue is going to be finding the right spot with a favorable rent factor. And, of course, staffing. With the software available today you don’t necessarily need a high-paid rock star. Keep your cost down by setting the hours for what you know to be those peak traffic times such as 10 to 7.

I’d suggest you think of this expense in terms of advertising dollars. You’re already spending a ton so you could consider moving some money around.

3. Don’t miss a trade. I know, I know, you’re not missing many, but let’s add one more piece to the equation; make sure in your save-a-deal meeting that you bring in all the appraisals from yesterday that you didn’t make.

Have a manager call those customers and up the ante by at least $500. Even if you think you already put all the money in the world in the unit, give it one last shot. You have nothing to lose and you might just capture a trade or two. Also, you might find out the real reason why they didn’t do business with you.

4. Pay extra. Yep, consider paying the salespeople a little extra for every deal that has a trade attached to it. It’s hard to measure how much impact they have on capturing the trade, but anything you can do to keep them interested is going to be a good investment.

5. Pay salespeople to find units for you. This idea is old as dirt and still worthy of consideration. Have them work sites like Facebook Marketplace, etc. If they can create a buy for you, then pay them. And pay them well. Add the cost of acquisition to the cost of the unit and it doesn’t impact salesman’s compensation. Win-win.

6. If you currently have software in place to mine your customer base, get re-focused on it and work it harder. If you don’t have the software, then get it.

The number one issue with dealers that use the software is the processes for follow-through are less than desirable. And frequently they have the wrong person doing the job. People skills are far more important than used car skills when it comes to capturing these customer’s vehicles.

Far too often this is a sloppy and unpleasant experience for the customer. Part of mining your customer base should be your ASMs asking if the customer would like a written appraisal for the value of their car.

7. Work harder to buy cars from your service customers. You can either serve up an appraisal on every unit that comes into your service department or have your service writers ask the customer if they would like a free written appraisal on their vehicle. Pay the service writer a bonus for every unit you’re able to buy.

8. Work harder at buying from auctions & rental car companies. I know it goes without saying, but I’ll say it anyway. You’re still going to have to use these sources.

Yes, you’re going to overpay 90% of the time. If you work smart you can still make it work for you. Make sure you shorten the life-cycle on these units with a goal in mind of finding a retail buyer at some number sooner than later. In most cases, you have to have a turn and burn mindset on these units. There’s a bunch of benefits of doing so and I’m confident you know what they are.

Work harder. Work smarter. Work more. That’s all I’m gonna say, Tommy Gibbs

I’m going to be discussing and commenting on what’s commonly known as the “Four Stages Of Learning” plus two others that I know you have never heard of because I made them up. I don’t know where the first four originated, I just know I stole them

All 6 stages of learning apply regardless of the application. They can be applied in sports, business, social activities, and life in general.

1. Unconscious incompetence-The individual does not understand or know how to do something and does not necessarily recognize the deficit. The individual must recognize their own incompetence, and the value of the new skill, before moving on to the next stage.

The length of time an individual spends in this stage depends on the strength of the stimulus to learn. The more time they are willing to spend learning the skill or activity the faster they move to the next stage. Example: You decide to take up golf so you go out to the driving range, whack at a few balls. 1 out of 10 you make great contact, but you have no clue what you’re doing. You know you love the feeling and you know you want some more of it so you keep returning to the driving range and/or play a few rounds of awful golf.

2. Conscious incompetence-Though the individual does not understand or know how to do something, he or she does recognize the deficit, as well as the value of a new skill in addressing the deficit. The making of mistakes can be integral to the learning process at this stage. Example: After going to the driving range for a while and playing a few rounds you begin taking lessons with a golf pro and quickly realize how little you know. You observe others either at the golf course or on video, etc. and the realization of how much there is to this game starts to sink in.

3. Conscious competence-The individual understands or knows how to do something. However, demonstrating the skill or knowledge requires concentration. It may be broken down into steps, and there is heavy conscious involvement in executing the new skill. Example: More golf lessons, more golf rounds played and you are starting to understand the integral parts of the swing. You haven’t mastered the swing yet, but you are starting to strike the ball more consistently especially when you think it through. It’s not automatic, but your skills are improving as your knowledge starts to grow. This can be the most frustrating stage of the first four. You still have to think about it. When you do, your results are much better, and when you don’t you want to throw your clubs in the lake.

4. Unconscious competence-The individual has had so much practice with a skill that it has become “second nature” and can be performed easily. The individual may be able to teach it to others, depending upon how and when it was learned. Example: You’ve now repeated your golf swing enough times, played enough rounds, attempted enough different types of shots that you can break par or better, and have reached a very competitive level. You no longer have to think about the elements of your swing, you just do it. The physical and mental muscle memory is locked in.

5. Competent Incompetence-is the most dangerous of the six. It’s when you have years of experience, know your stuff and have become convinced you have nothing else to learn. Your success has convinced you that you are “the man” (or woman) and you are done learning. Seeking more knowledge is the last thing on your mind. What got you to where you are today is what you think is going to keep you where you are and beyond.

6. Learning to be competent-this stage never stops. It’s a life long journey that keeps life interesting and challenging. You know that learning is a journey, not a destination. (That would be you and I.)

The most successful people at any skill, business, or activity are the ones who continue to do two things:

1. They keep going back to the basics
2. They continue searching for answers even when they think they already have many of them.

What stage are you in? I’m in the “Learning To Be Competent” stage and I hope it never ends. That’s all I’m gonna say, Tommy Gibbs

It’s easy to do easy.

It’s easy to ignore.

It’s easy to look the other way.

Easy to let slide.

We all like easy.

Anybody can do easy.

Being easy causes you to say yes, when you should say no.

Being easy causes you to take your eye off the big picture.

When you take your eye off the big picture, everything around you becomes a little fuzzier.

The fuzzier things get, the more confused you and your staff get.

The more confused you and the staff get, the more little things begin to slide.

Easy now becomes habit.

Habit becomes the norm.

The norm becomes easy.

That’s when rinse and repeat occurs. The problem is that the water you’re rinsing with is murky and dirty.

Expectations begin to drop. Lower expectations become the norm.

The little things can be hard to measure, so they are ignored.

When you focus on the little things, the performance of the team improves.

Why would you want to do easy?

Don’t do easy. That’s all I’m gonna say, Tommy Gibbs

It’s Thanksgiving and time to give thanks.

If you’re like me for sure you have a lot to be thankful for. Among many things I’m thankful for are your friendship and support.

Thanksgiving also starts the closeout of the year. It centers around Black Friday and rolls through the last week of the year. Like it or not, 2021 is already here.

I’ve listed some very basic ideas you need to take into consideration that will help you finish strong and get ready for your best year ever.

A. Re-commit yourself- and your thinking towards being the very best you can be. Take stock of all those great ideas running around in your head.

Write them down and make a commitment to get them done by certain dates. Post it on the wall in several places that you will see frequently. If you have a private restroom, put it on the mirror.

The dealers and GMs with the most successful used car operations are those who have taken ownership of the used car department.

The more involved you get, the more success your dealership will have. If you’re not committed to the used car business, it’s a safe bet your team isn’t either.

B. Re-evaluate-the appearance of your inventory. Let’s do a little checklist:

1. Look at your inventory online. Are they all there? Actual photos & prices posted?

2. Take a lot walk. Are the vehicles in straight lines?

3. When was the last time the entire lot was rotated?

4. Are you using angles to display your inventory?

5. Do you have hang tags? If so, do they all have hang tags?

6. Are they nasty, dirty on the outside?

C. Refocus Your Disciplines-To be successful in the used car business you have to have daily/weekly/monthly disciplines that you live and breathe by.

One of those disciplines might be to do a weekly lot walk. Every car in your inventory must be touched. If it’s in service, touch it. If it’s in prep, touch it.
If it’s in the budget center, touch it.

Everybody touches it. Even if you think you have your disciplines well defined inside your head, you’d be well served to make a written list and check them off from time to time.

D. Re-Recon-Take every unit over 30 days old back through a recon process. (You’ve already missed your best window of opportunity to make gross; that would be the first 20 days.)

E. Re-Invest-in yourself and your management team. Do something to gain some knowledge. Hire me, visit CarMax, or visit a dealer friend in another state that does a good job in used. Attend a workshop. Join a Twenty Group. Join a Used Car Twenty Group. Do something besides sitting there and waiting for something to happen.

F. Re-think- your management team. Do you have the right person running your used car operation?

Yes, that person may have been with you for years. Loyalty sometimes equals mediocrity. Maybe they have some great skills, but the fact is that you may not be making the best use of their talents.

I’m thankful for lots of things this holiday season and I’m especially thankful that you’ve taken the time to read my little Zingers. That’s all I’m gonna say, Tommy Gibbs

I’ve written several articles of late talking about how dealers have benefited from the law of supply and demand.
Let’s think about this as two legs of a three-legged stool.

The third and most important leg that I’ve not discussed is “smarts.”

Archie Manning of the famed quarterback family holds a quarterback training camp each summer.
Archie says, “The best advice I try to give to a young quarterback is you need to know what you are doing because if you know where to go with the football, you can get rid of it, and throw it, and you won’t get hit.”

And that’s where your smarts have played a bigger role than maybe even you have given yourself credit for.
Knowing where to go with the football has played a far bigger role in your bottom line than many have acknowledged.

Today’s dealers are smarter, and because they are smarter, when the law of supply and demand balanced itself, the smart dealers have made the most money in the history of their businesses.
When you combine the amount of data available to dealers today and the intellect to understand it, then you have figured out where to go with the football.

In the long term, knowing where to go with the football makes you a lot more money than a favorable law of supply and demand ever could. Supply and demand will not always be in your favor.

Being smart will.

You’re not just winning because you got lucky. You’re winning because you’re smart. Stay smart. That’s all I’m gonna say, Tommy Gibbs

By now you’ve closed out October, twisted over the numbers and gone back to work.

Not so fast.

October is the perfect month. “Perfect for what?” you ask. Perfect for figuring out where you’ve been and where you want to go.

I can’t say that math was one of my best subjects, but I can divide by 10 real easy. At a glance, I know what the averages are for any line item expenses, sales volume, and gross profit.

What also makes October a perfect time is it sets the stage for the next year. Now is the time to start planning for 2021. Waiting until the last week in December to get your plan together is a really bad strategy.

This is the perfect time to dig in and firm up your fundamentals in all departments.

This is the time to get back to basics.
This is not the time to cut back on your training.

This is when you need to amp up your thinking, stretch your organization and stretch your imagination.

If you don’t have a solid foundation of basic processes you will never maximize your success.

This is the time to take control of the evaporation factor that’s been occurring all year long. This is the time to stop the process bleeding.

Your long-term plan should include joining a Twenty Group and attending the NADA convention. Sure it’s virtual. Do it anyway.

We all get lazy and get caught up in our daily routines. Attending these meetings gets you revitalized. It gets you outside of your daily box and opens your eyes up to what the possibilities might be. Seems like a no-brainer.

This is the time to make those plans. Teamwork is critical if you’re going to maximize your bottom line. To keep your team on the same page you have to constantly communicate to them what the expectations are and what processes they are expected to follow.

There is no shake ‘n bake solution. You don’t fix it and walk away. You fix it and re-fix it.

What to do?

1. Ask yourself if you can improve your processes? If you focus on revamping your processes, what effect do you think it will have on your business? It’s just a fact that regardless of how well disciplined you are, over time your processes are going to evaporate.

The best piece of advice I can give you is to lock yourself and your management team in a room and review every detail of your selling processes. Be brutally honest with yourself. Then take the necessary action to get yourself back on track.

2. Can you improve your team? Got the wrong players? Now is the time to make the changes. If you already have the right team in place then it’s time to let them know what your expectations are and show them the plan and the path to achieving those expectations.

3. Don’t think of your planning as you now having a plan. Think of it as a “mission.” Plans can fall apart. When you’re on a mission you stay after it until you succeed and then you stay after it some more.

I’m on a mission to get you to re-think what you’re doing. I’m on a mission to get you ready. That’s all I’m gonna say, Tommy Gibbs

That’s all I’m gonna say, Tommy Gibbs

As most of us know, constipation can be a terrible thing. When you are constipated it’s virtually impossible to be as productive as you might otherwise be.

Exercise, drinking lots of water and in some really bad cases taking a strong laxative can often relieve the problem and get you back on your “A Game.”

Most of you have had a good run with inventory turn, but some of you have gotten slack and you have stuff aging on you.

Having 60-day-old plus units in stock is a lot like being constipated. You can never perform your best when you’re all stopped up.

60-day-old units will make you sluggish and hold back your potential to be as productive as you might be. Your “A game” will never show up when you have used car constipation. Think of it as poop in the chute.

Dealers will often give their used car inventory a laxative, flush the system and start over. It can be a risky and costly approach.

The problem is that even when they “blow it all out” it doesn’t do that much good in the big picture.

Since they don’t change their diet or exercise, so the inventory continues to be constipated and therefore hold them back from achieving their maximum potential.

A good diet for the used car department would be to have good solid processes. A good exercise program for the used car department would be to understand the role that speed plays toward good health. Good diet and exercise can help you avoid used car constipation.

Constipation makes you stinky. You don’t want to be stinky. Having aged units makes you stinky. You don’t want to be stinky.

It’s not a matter of fixing a one-time constipation issue.

It’s a matter of the right diet and exercise to live a happier and fuller life. If you give a hoot you’ll clean up your poop. That’s all I’m gonna say, Tommy Gibbs

We’re talking about your job. Yes, your job.

We know it’s not easy, that’s why you’re asked to do it. If it were easy, we’d put someone in it with a lot less talent. Less drive. Less enthusiasm. Less moxie. Less grit. Less get up and go.

Your job was never designed to be easy. If it were easy no one would care. And if it were easy, you’d be paid a lot less.

Sure, you’re not paid enough. But, it’s not always about what you’re being paid. It’s about what you’re paying to the big picture.

Sometimes it takes some serious grinding it out to get the pay to match. You will eventually get to the point where you’re being paid for more than you are actually doing.

Never forget that you’re contributing. You’re contributing in a big way. A way that others can’t contribute. We need you to keep doing what’s not easy.

Just stay the course. Of course, the course is not always easy, but needed. That’s all I’m gonna say, Tommy Gibbs