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Creative pairing: 2 dealers innovate as partners

Retailers pool resources to grow while retaining control

Partners Sam Slaughter and Katie Bowman Coleman of Sellers Auto Group say sharing an office helps them communicate.
Conserving capital
By pooling resources, instead of one buying out the other, the partners of Sellers Auto Group freed up capital to invest in opening stores and developing innovative virtual showroom software.

Published in Automotive News Dec. 8, 2014

CLARKSTON, Mich. -- After toiling to revitalize separate single-point dealerships in the Detroit area, two childhood friends merged and expanded operations to compete with larger groups.

Sam Slaughter and Katie Bowman Coleman created Sellers Auto Group by pooling their resources -- his Sellers Buick-GMC store in Farmington Hills, Mich., and her Bowman Chevrolet in Clarkston.

"It's not an acquisition, but a partnership," said Slaughter, 52.

The distinction is key. Without making a big payout to a seller, the two partners have invested their combined assets in growth and to develop proprietary technology called YourOnlineDealer that allows online customers to choose, buy, finance and even take delivery of a vehicle without visiting a dealership.

The partnership contract wasn't final until this year, but the two have been working toward the arrangement since 2010, well before the 2013 opening of Sellers Subaru in Macomb Township, a northeastern suburb of Detroit.

"We wanted to grow and be part of something bigger, but we both also wanted to remain in control as dealers," said Coleman, 50. "We couldn't have done this if we hadn't been friends since we were kids."

They met as children living in a close-knit community in Bloomfield Township in Detroit's northern suburbs.

The partners just opened a fourth location up the road from the Chevy store, the site of the closed Randy Hosler Buick-GMC. Coleman moved the collision shop there to create more service space at Bowman Chevy.

A Sellers Bowman Auto Center banner is lashed to the building until the permanent signage arrives for the used-car center, but inside is the large shared office where they jointly run their operation.

Both desks face the door, Slaughter on the left, Coleman on the right, with a conference table for impromptu meetings with managers.

"We depend on our general managers to run the stores day to day," Slaughter said. The partners also have five senior managers that handle used cars, business development center, marketing and advertising, finance and accounting and information technology.

Value of diversification

Slaughter says the partnership makes several things possible.

The partners have more diversification to smooth the ups and downs of individual brands. Slaughter recalls losing 65 percent of his volume at his then-Pontiac-GMC store in 2009 before adding Buick.

As a group, "we can offer customers a choice," he said. "We can refer a customer to another store or even bring a vehicle from another store to the customer."

The partners have greater combined marketing power to develop a brand with a unified marketing message and to compete with other groups.

"And Katie and I share a philosophy: treat customers well, treat employees well," Slaughter said.

Said Coleman: "We have a lot of talented people and this gives them a chance to build their careers without having to go somewhere else."

The partnership also allows for major projects. Last week the group launched YourOnlineDealer, virtual showroom proprietary software that expands the capabilities of each dealership's website.

With YourOnlineDealer, online shoppers can continue to surf through inventory and store personnel, check hours and addresses and schedule service appointments. But the new software invites visitors to click to "Buy your new car online" and engage in a video chat with an auto guide, a salaried Sellers employee who answers questions and helps customers research vehicles.

The primary setup is a two-way live video chat, although customers can opt to not be seen by the employee. As an auto guide conducts research, he or she can display results on screen for the customer to see during the explanation.

"We figured people already are doing research online, so why not let them talk to somebody who can walk them through the process," Slaughter said. "They can use YourOnlineDealer for as much or as little as they want."

Online shoppers can select a vehicle in stock, arrange financing, get a trade-in quote and agree to buy a vehicle. As yet, the process doesn't have capability for an electronic signature. The credit application and purchase contract require a physical signature, but the Sellers Auto Group will mail or messenger any necessary paperwork to the customer.

"We encourage buyers to at least come to the dealership to take delivery, but if they really don't want to, we'll deliver the car to their home or office," Slaughter said.

Joe Jackson, the group's chief marketing officer, said the new system offers customers more options.

"We can communicate in person, by phone, email, chat or two-way video chat," he said. "It's however the customer wants."

"We're trying to capture more millennial buyers," Slaughter said. "They do everything online. But by going for millennials, you get everybody."

'Divide and concur'

During the partnership's long gestation, Slaughter and Coleman planned to ease the transition for loyal employees used to single-point operations. The company now has about 310 workers at four locations in two counties.

"The exciting part is creating a new corporate culture," Coleman said.

On shared processes, the partners tried to develop new methods rather than simply impose one party's system on everybody. "Not A or B but C," Slaughter put it.

The partners split most functions and share others. Coleman handles finance, accounting and IT. Slaughter has new and used sales, business development and tactical advertising. They share marketing and strategic advertising. "It's divide and concur," Coleman quipped.

The partners see a rapid return on their efforts. Monthly group sales are 600 to 650, about 275 of those used.

"Our same-store sales are up 20 percent this year, with used and certified used growing about the same rate," Slaughter said. "And our same-store, year-over-year service revenue is up 30 percent."

Conserving capital
By pooling resources, instead of one buying out the other, the partners of Sellers Auto Group freed up capital to invest in opening stores and developing innovative virtual showroom software.
You can reach Jesse Snyder at jsnyder@crain.com -- Follow Jesse on Twitter: https://twitter.com/spartyjesse

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