'Middle of nowhere' site limits store's costs
Rural N.J. dealership focuses on improving sales, not paying rent
Ben Catanese is the first to admit that Volkswagen of Salem County, which his family bought in 2011, is "in the middle of nowhere," surrounded by fields of corn and soybeans.
But the setting is OK with Catanese, 36, who believes that as car shoppers do more of their research outside the showroom, a dealership's location becomes less important.
What is important is that the rural location of the Monroeville, N.J., dealership helps the family contain its real estate costs. That freed time and money to focus on building the store's sales to roughly 28 new and 43 used vehicles per month from the 8 to 15 mostly new vehicles per month that the previous owners sold.
Catanese views the dealership's location "as a positive."
"This is a real estate intensive business," he says. "It allows you to be more nimble and a little bit more aggressive when you're not concerned about paying $50,000, $60,000 or $70,000 a month in rent. Physically we have a piece of property that will allow us to add dealerships. It made a lot of sense for us."
Moreover, Catanese is working to make the showroom less central to sales. He is a co-founder of GoMoto, a startup that generates sales leads for new-car dealerships by giving consumers at shopping malls test drives in competing brands' new vehicles.
Monroeville is about 25 miles from Philadelphia and 30 miles from Atlantic City. It is not listed on the U.S. Census Bureau Web site that lists population and demographic data for cities and towns. Catanese says the community is so rural that its residents don't have public trash pickup.
When the family acquired the dealership, the store's sales were so low, it was like starting with a clean sheet of paper, Catanese says. Just having new vehicles on the lot -- there had been very few under the previous owners -- helped draw customers, he says.
He spent the following year researching the right mix of used vehicles for the market.
For instance, Catanese considered specializing in SUVs but concluded that VW's Tiguan was too obscure and its more luxurious Touareg was too expensive. "If we focused on used SUVs we would have eliminated" VW vehicles, he says, "something we didn't want to do."
He learned that the average household owned at least one pickup, typically used to haul household trash to the dump. So in addition to new and certified used VWs, the dealership has focused on used 2006-10 domestic-brand pickups that retail for less than $20,000. "Since we shifted that focus, our used numbers have gone up significantly," Catanese says.
Catanese lists his new and used inventory online, but as of about four months ago, site visitors must register their names, e-mail addresses and phone numbers to access it.
"Anyone who is serious about a car or knows the reputation of our store is willing to put their information in," he says. "Those real people tend to show up in our dealership after they submit their information. We'll continue to do it until it's not effective."
The dealership's low-pressure sales strategy embraces giving consumers information about the vehicle, demonstrating it and being upfront about factory rebates and incentives. He encourages serious but undecided customers to take a vehicle home overnight to let family and friends see it or, if it is a used vehicle, get it checked by their own mechanic.
"Informed customers make better decisions," he says.
Catanese says the dealership model is here to stay, but people his age and younger -- Gen Y individuals born between 1975 and 1995 -- will not "endure" the sales process as it operates in most dealerships today.
That's why people enjoy shopping on Amazon.com and are intrigued with Tesla Motors Inc.'s business model of selling its electric cars from factory-owned stores to pampered owners, he says.
"It's evident in every other sales industry that people do not want that arduous process to buy something," he says.
"Not everybody can afford a Tesla, certainly, but the idea that people can shop and customize and order -- it's like shopping on Amazon. It's easy. They are providing an experience that the modern consumer wants."
That thinking was a springboard for GoMoto, founded by Catanese and three business partners about 21/2 years ago.
Local dealerships pay GoMoto $750 to $1,250 for each vehicle they display in the company's test drive center. Consumers test drive four or five competitive vehicles side by side, in a pressure- and sales-free environment. When customers express interest in a vehicle, GoMoto connects them with a participating dealership.
"The motivation is for customers to experience these cars, but it is also for the manufacturer to display their merchandise," he says. "It's a perpetual auto show."
Catanese, a first-generation dealer, is also a third-generation wholesaler. His grandfather, Benjamin Catanese, founded Glenside Auto Sales Inc., a wholesale auto business, in 1949, in suburban Philadelphia.
Catanese's father, James Catanese, is president of Glenside Auto, which sells at auction about 150 to 200 units per month, purchased from new-car dealers.
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