Profile on Sam Swope, the living legend
Lessons from a Master
I recently wrote about two young dealers who have made tremendous strides in building their used vehicle volumes and profitability by adopting a velocity-focused approach to managing their used vehicle departments. The underlying point was that each of these dealers-because of their age and inexperience-had a distinct advantage over other stores where used vehicle managers must “undo to renew” their management philosophy and processes
Well, age and experience are not always impediments. I understood that very quickly after sitting down this week to talk about the used vehicle business with Louisville mega-dealer Sam Swope.
Mr. Swope opened his first store, a Dodge/Plymouth point, in 1952. Even then, he focused on used vehicles as a primary part of his operation and maintained a 1:1 used-to-new sales ratio.
“We’ve always considered ourselves as a used vehicle dealer who happens to have a new car franchise-and we’re happy to have it,” Mr. Swope says. “Every sales meeting starts with used cars, even to this day.”
As we talked, I was struck by how well Mr. Swope’s used vehicle management principles-time-tested by nearly 60 years of success-offer sound guideposts for us today:
Inventory management: 20 ‘in’, no 30. (Translation: 20 in inventory, nothing older than 30 days). Mr. Swope says there weren’t any epiphanies in arriving at this management principle, “it’s just how I thought you should run a used vehicle department.” Today, his management philosophy is still relevant: It emphasizes both turning and maintaining inventory that’s compelling to buyers.
Acquiring and wholesaling vehicles: “You don’t make money when you sell, you make money when you buy,” Mr. Swope says. He emphasized it’s essential to acquire the “right car” that will appeal to both salespeople and customers. On wholesaling, he avoids the practice of using buyers because it invites temptation. “We always wholesale at auction,” he says.
Create an environment that promotes continued innovation and growth: Mr. Swope offers an axiom that guides his emphasis on ongoing growth: When you’re green you grow. When you’re ripe you rot. “The worst thing a dealer can do is be satisfied because then the next step is sliding backward,” he says in closing.