Pros and cons of a buying a dealership

searcher profile

May 23, 2022

by a searcher from Stanford University - Graduate School of Business in Dallas, TX, USA

Hi All -

I am investigating buying a dealership business for a higher end, consumer oriented product. Does anyone have experience with owner and/or operating a dealership business? Would love to hear any pros and cons.

Many thanks!
Jory

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commentor profile
Reply by a searcher
in Providence, RI, USA
Getting and retaining talent in the automotive industry has been particularly difficult, but many industries have felt that over the last few years. However, what's proven to be the most difficult since COVID is sourcing inventory at reasonable prices, allowing you (the dealer) to maintain margins. What was once a capital-intensive business seems to be moving to an "inventory light" business model, which allows the new car dealers to invest capital in their used car, parts, and service operations. With Carvana, Vroom, and even Carmax, which sells approx. 40% of their inventory online it's mainly becoming a platform play, in my opinion.
commentor profile
Reply by an intermediary
from Royal Melbourne Institute of Technology in Sydney NSW, Australia
My two cents....I'm not a fan of giving other people/businesses having a say or any element of control over my business. Sure, this model may de-risk things for you (especially upfront). But once you know the business inside out, you will perceive risk differently and may regret the cost and control elements that this model assumes.
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