We’ve got a special episode today as we talk about the rapidly shifting wholesale market. We also have the honor of being the first to announce the big move of ASOTU Investor and long time dealer, Brian Kramer as he is named EVP Cars.com to be Head of used car acquisition platform AccuTrade. Hang on everyone, we’re comin’ in hot on a Monday.
Get the Daily Push Back email at https://www.asotu.com/
Kyle Mountsier, Paul Daly, Brian Kramer
Paul Daly 00:25
Yo asotu con 2022 is coming in so hot September 11 through 13th. We're here scoping out the entire venue. So you can see this amazing place where the most unique rebirth of the automotive conference is gonna go down. Look, it's all about energy. And the energy of this space is exactly what we're inviting you into. So screens, ribbon, banners, bars, all of the things that we believe will cultivate conversation. It's actually not just intentional about the space, but it's intentional about the conversation. So we really are excited about different industry partners, dealers OEMs. Joining us to make sure the conversation matches the space the most value people get is never one thing that you remember from the keynote. It's actually the conversations that happened and the relationships that are formed around the content. This place is designed for relationship. This place is designed for energy. Yeah, think about it, we've got restaurants off every four corner, we've got restaurants in the main space, it's just a place where you're going to be able to get and stay here and be able to have those like touch points, you're literally going to be passing in the hall 100% of the time. So if you've ever been to an auto conference, this is the one that started out if you're sick of auto conferences in general or you just need something a little different. A soda con is the place to be September 11 through 13th We only have a limited number of tickets and most of our events have sold out so exactly we're just saying we're really excited and we just hope that you'll join us because we want to craft something that is for the whole industry not just for us so go to a show to conduct calm getting tickets now. All right, Monday, Monday Monday, we couldn't come in any hotter on a Monday morning so there's little soda comm preview talking about the second I talked about wholesale shake up and somebody you know not so new kid on the block Brian Kramer live person on the show on a Monday.
Kyle Mountsier 02:20
If you want to do a thing on a Monday, why don't you do with thing you know what I'm saying? I woke
Paul Daly 02:27
up this morning like I gotta eat my Wheaties today. You just saw the trailer for a soda Con last week. We spent some time in Philly if you're following along, you know that already, Melvin Good morning. Good morning, fam. That's what I'd like to hear. Good morning. Yes, it is a big family asotu con drawing a big circle around the entire industry. Look, if you want to go we got there realize we kind of have a problem. And that problem is we only have 600 places. And we're like, oh man, oh, this is gonna suck telling people that can't come? I know. Right? Yeah, it's like, I know, we're saying Get In Line Get In Line now. But it's a reality between the industry partners that have already committed, the ones that are about to commit this week that we're just like finalizing details on and the energy already around probably over 100 people that we've personally spoken to that are saying they're coming, like you, you put all that in a bucket. And it's it's gonna go real quick, right? So go ahead. Yeah, so do con.com. All you need to do is go there. It's a simple type form. I know we don't have a massive website that will be coming this week. But those people that sign up for that email list will get a 24 hour advance notice of tickets going on sale. So if you want to be in line, you don't want to miss it, go to a soda con.com fill out that little form. And we'll make sure you get information first. Because this is going to be one not to miss no kidding. It's a big week, we have a lot of work to do. We were just talking about how much there is to do this week. Because next week, we're going to be with Virginia auto dealers at the VA da conference. So just want to let you know, if you're a Virginia Auto Dealer, and you're going to be there. Please come say hi, if you're considering going and you can still get there, please go. It's always great to just be on the ground hands in the dirt with the dealers. Right? It's we've been able to do that now like weeks and weeks in a row. It's amazing. Yes, exactly. I'm really excited about that. We're gonna you know, Jim Fitzpatrick is going to be out there doing leading a panel and oh, do a few other just industry, bright minds. And so I'm excited to not just you know, participate and speak but also learn and be a part of just what's going on on boots on ground in dealerships and kind of hear from those conversations. It's the best thing. So no, speaking of boots on the ground. All right, there have been less boots on the ground and automotive auctions you may have noticed. He didn't know where I was going with that good automotive news article this morning in this race to reinvent the wholesale auction market JD Power estimates volume at traditional auctions were 64,000 vehicles for the week of May 16, down from 111. Plus for the same week in 2019. I like that they're going like 2019. And under skipping over all the mandates, yeah, they're doing it right. So basically, you're saying it's half of what it used to be the two largest Mannheim and ADESA, obviously Owned by Cox, automotive and Carvanha, respectively, are leaning full on into their digital ecosystems, of course. Right. And they, they both have a very different strategy when it comes to auctions. So wholesale market changing is going to pivot here into our guests in just a second. But, you know, Cox, automotive President, I'm sorry, man, I President quotes, our physical space is not just about the auctions. It's for us a key asset we plan to have for ever, we don't have any intentions of selling it. So I mean, that's a pretty strong and clear statement from Manheim. Well, you know, when you think about Manheim, and you think about all that Cox Automotive is doing and then you and then you just pivot just a little bit and look over at what Carvanha did to acquire physical space with a DESA. You recognize that the ability to scale across the country and whatever you're doing with vehicle delivery, whether it be direct to consumer or to dealers, is the necessity for these large land grabs that have space for vehicles. Right. And I, I would, I would suspect that Mannheim probably has some partnerships in the work, if not already happening, that have some sort of consumer reality there. I mean, I know that in Nashville, actually, there's a large wholesaler here, that also is a retailer that they actually house zero vehicles on their lots. They actually house them at the Mannheim Liselotte and have lots of foraging area. Yes. Oh, that's an interesting thought. Because you think like the staging area capability, and with a lot of OEMs coming out talking about, you know, staging vehicles in order to be delivered in this last mile logistics thing. Interesting. Mannheim Mannheim president also, she says, The reconfiguring for an expected influx of EVs. So you think about the infrastructure work, you can get done while the lot is empty? Right. I'm sure there's a lot of trenching of electrical lines and power ports, because there's gonna be a lot of cars that need to be charged. You know, and obviously, ADESA is saying, Well, you know, Carvana kind of bought us for the strategic reconditioning purposes, and the strategic document processing purposes. Come on, let's go that made a whole lot of sense. And so, you know, the, the wholesale world is flipped on its head, as as dealers always do, right, they find a way to make it work. And in this environment, when wholesale auctions in person have been difficult to get to because of COVID, right? Everyone just pivots right? innovation starts, right? And we said last week, all innovation is trouble. And the trouble has been going on but dealers are like, Hey, we're gonna figure out how to get these units acquired on our own. We're going to figure out how to open our own buy centers to give consumers prices and you know, what happens when the need starts? The technology follows, right. And speaking of acquiring vehicles through technology, segue that was I'm gonna the first one, I was like, Where are we going? The next one, we're like, alright, we had a little we have a little thing had a thing. We had a thing. Go ahead, you started the Segway. You're here today. We're really excited to have our good friend and once dealer investor, Brian Kramer on the show today, and we are really excited. And some of you may know this, but he has. He has recently left, Jermain, Toyota, Toyota of Naples, and we are excited to announce with him this morning, that he has been named the executive vice president of cars.com and head of Accu trade, Brian, welcome to the show.
Brian Kramer 09:00
Thanks for having me. We
Paul Daly 09:01
didn't say his name for the people on the on the podcast. It's Brian Kramer if Ryan Cramer. But if you're listening to this podcast, you probably already know that we were talking about Brian, What's up beautiful new digs. You
Brian Kramer 09:12
got there. Right. I'm transitioning into my but I'm working remotely, which you know, is going to be a huge life changer for me. But I spent almost three decades in an automotive retail. So it's going to be a crazy, crazy shift. But I was fortunate enough. Between Alex better Bob Holland said, they figured out a way to make it make sense. And then we've got a plan to change automotive retail forever.
Paul Daly 09:36
All right, so why don't we start this way, Ben Hadley says let's go in a very typical Ben Hadley post. He's got that he's got that on the quick on the texting. Brian, why don't you tell us what your role is with cars and what your what the impetus is like why cars put you in that seat?
Brian Kramer 09:53
So the technical title is EVP. And then General Manager vacuum trade for Uh, you know, for the whole, I guess North America, but we're our goal is to really flatten out, you guys are talking about the you know the same thing with the auctions, our goal is to really empower dealers. And as Alex always says, you know, it's like equipping all the rebels in Star Wars with with the weapons against the Empire. And Accu trade really is the foundational element of digital retail. And what I've found in on the retail side is thank you Colby. But what I found on the on the, on the on the retail side is the number one and you know, impotent or an impediment to digital retail is to trade, it's trade, and then it comes down to credit. And that's kind of the thing library uses it as a lead generation tool instead of a retailing tool. So my plan was going there, or their plan with bringing you there is to level that out so that somebody at 2am can buy a car, just like we were doing it's germane sort of Naples, but take that and scale it to 20,000 dealers across the country, and that we think it'll leave a huge just a dent that nobody will ever forget in automotive retail.
Paul Daly 11:05
So there's a Go ahead, Carl. Yeah, well, when I think you know, one of the what you just said is that to you, it's kind of there's two linchpins to this digital retailing matrix and, and one being finance and just everything surrounding finance, and then to being the trade. It's kind of like calculating payments, been doing that for years, right? How much down payment been doing that for years? Lisa's been doing that for years. But those are the two linchpins to speed the transaction. But you know, I think that when you think about Accu trade, in particular, you're solving kind of two pieces, which is acquiring vehicles and the digital retailing problems is that is that accurate?
Brian Kramer 11:48
100%. And then it will come down to, you know, Jared Keller, who just chimed in, reverse mentored me on how to connect the dots on all those different things. that'll that'll happen eventually down the road with, you know, Auto IQ and these other assets that they purchased recently. And they've got some amazing entities and getting them to all connect and integrate with the API's correctly. Is, is going to be the key. But yeah, so with all this stuff, with franchise laws, and all this noise that's going on all over the place, as Alan said, told me the other day that the number one thing to insulate yourself from all that noise, is becoming a phenomenal use car retailer, and use cars never changes. You know, these never sold a new car, he's sold millions and millions more cars than anybody else on Earth. And that's the one thing you can control through all of this. How do you source vehicles? How do you merchandise and what's your speed to market? What you know, all those things that all of us know but but whoever sources the best cars wins. The other thing though, that I'm going to try to preach and pound like a drum. It says Dustin user theory. And I think that that's also going to be a savior for the for the car business because I think we deal with with the whole industry with a law of scarcity.
Paul Daly 13:01
Explain that a little bit. It's what is it called again?
Brian Kramer 13:04
The law of scarcity. No, no,
Paul Daly 13:06
before that, you said oh, the best theory. Okay,
Brian Kramer 13:09
so So as Bob he's mentored me over the last few years and and use cars and I gotta just like when Dale Pollack was suggesting all those things back in Oh, seven and Oh, eight. I push back on that, because it seemed, you know, too, out there. So I was a little bit more receptive this time around. And I would say, you know, Bob, about Holland says, like the Yoda of use cars and are. He's, he is on another planet, in terms of he's, he's brilliant. genius level, but when, but when you talk to him when he asked me questions, and why this why that long story short, it was multiple, seven digits of gross later, by me wholesaling more cars, we retailed more cars, but we wholesale more cars, we made more money in wholesale. And we also made more money in retail per vehicle, not just a little bucket of gross. And it was just a very unusual way unorthodox way that I hadn't looked at it. But his theory is there's the best end user for everything. And when I say that, I mean it like this, everybody always says, Well, I can sell anything, I can retail, any car, send me all the use cars, I don't want to let go of anything, I'm going to keep it all. And by doing that, you have to, you know, basically take a hammer to try to pound a square peg through a round hole on with spiffs. And on things where you're not the best and user versus just trying to figure out because it takes, you know, a little bit of time, but what am I the best end user on? And then how do I get more of those, and then I have to be willing to let go of these in order to get as many of those as humanly possible. And none of us are the best end user including Carmex. I mean, it'd be the closest to it. But unless you were if you go to the auction and you don't buy every single car, you're not the best end user. And it's the same way as you're acquiring cars on the surface drive as your your appraisal lane, or more importantly, on your virtual appraisal lane, which is what my number one goal is going to be for the rest of this year is to really open up dealers eyes on the virtual appraisal lane. sight unseen appraisals, the remote appraisals, the appraisals over the phone, I think that's the single biggest opportunity in automotive retail as of right now. And right now is when we need to start developing those muscles so that when, when reality sets in next year, you know, maybe that happens in the middle of next year that we're ready, we hit the ground running. It's not like we haven't been training to do in two days,
Paul Daly 15:20
man that. So what I love about you know, and you know, on the show, we're not, we're not all big about like talking about specific, specific products or companies, this is a really unique situation, because you've been in a soda investor, you've been a dealer for decades, right? And you understand the operational side of the business because a lot of technology exists, that without the operational understanding of the implementation, it doesn't matter. Right. So I love the idea that you are going to be able to make some trouble operationally empowered by a technology and not the other way around, which is how two people typically think is going to solve all the problems. So I mean, Brian, you're gonna get you're getting a look under the hood of a lot of different dealerships over the next year, you excited about that?
Brian Kramer 16:07
It's gonna be amazing. No, I had a glimpse when I was at AutoNation, to be able to go and see a few. But we're going to do a roadshow, and we're going to go visit the, you know, the best, we're going to showcase the best case studies. And we're going to share it with with the with the world, because you know, no different than what you guys always say, you know, we're only going to get better by by, by banding together.
Paul Daly 16:26
That's right. That's right. Well, and what I love about what you're saying is, is, you know, technology and use cases and ways of ways of doing business with technology and with people, they vary. And so doing that type of roadshow, I think is good for the whole industry, because it's like, oh, they plug it in this way, they plug it in this way, their people utilize it this way. And that's good for that community, that culture that that that way of doing business, but we can scale utilizing technology that supports people instead of the other way around. And that just might look different from for different people.
Brian Kramer 17:02
Absolutely. And I've already seen Jay Alvarez and Hendrick using it in a different way. And I'm trying to take notes as to how he's what he's doing, how he's doing it. And yeah, it's already becoming, you know, it's morphing into, into different things. And, and I'm very curious to learn how other people use the tool and what success they're seeing, and, and just compiling all that data into one into one entity, and it's not. It's agnostic. It's not as if it's a competition of this product or that product. It integrates with those products and what it's designed for, it's designed for speed it's designed for. So you want to know what your trades worth, you're out of textbook to you. I'll email it to you. However you want to receive it. We're going to come to you and you can give you the information, and we're going to give it to you fast and it's going to empower, read franchised and independent car dealers against the big online retailers that are sucking up and vacuuming all the used cars out of the system. It's going to allow them to be on a level playing field with them. I think for the first time ever.
Paul Daly 17:59
Well, look, no doubt, Brian Kramer's in the middle of a bunch of trouble again, wholesale markets being shaken up and powered by technology. So today, get out there and think about how you can make a little trouble by serving other people and doing it really well.