Smith: Pioneered the Internet as sales vehicle

To appreciate how far ahead of his time Dave Smith was, consider this: When the Kellogg, Idaho, dealer who pioneered how to retail vehicles to a national audience over the Internet died in 1994 while diving, many consumers were still welcomed online via dial-up modems by the phrase "You've got mail."

And yet, the concepts that Smith pioneered as a small-town dealer in northern Idaho more than three decades ago now dominate automotive retail.

By the time he died in Belize at age 58, his Dave Smith Auto Group had 65 employees and was doing $65 million in annual sales, regularly drawing customers from hundreds — and often thousands — of miles away.

The Dave Smith operating model — no-haggle pricing, large inventories and robust Internet business — not only proved itself during his lifetime but remained the guiding principles of the group he founded. Its proven success was a primary attraction for RFJ Auto Partners Inc., which acquired Dave Smith Auto Group in April 2015 in a blockbuster deal. Dave Smith Auto Group at that time was ranked No. 111 on Automotive News' list of the top 150 dealership groups based in the U.S.

"Having learned more about that business and the people and everything else, it's even more amazing than when I bought it in 2015," then-RFJ President Rick Ford told Automotive News this month.

The growth story began in the 1980s, when with interest rates climbing, Dave Smith found his dealerships stuffed with inventory just as the local silver mine was shutting down. His answer? Start running ads in newspapers in other towns, advertising transparent and fixed pricing in an era when that didn't exist, and then selling new vehicles over the phone.

When the Internet arrived, "they just grabbed it and took off with it," Ford explained, crediting Dave Smith's son, Ken, with expanding his father's legacy and turning the dealerships in tiny Kellogg into national sales leaders. Ken Smith worked with Ford to run the dealerships for several years, stepping down in 2019, Ford said.

During the early days of the pandemic, dealerships across the country that had put off or were gingerly stepping into online retailing suddenly found themselves chasing a legend.

In 2021, Sonic Automotive Inc. acquired RFJ in a $700 million acquisition — one that included Dave Smith's original two-store powerhouse in Kellogg, as well as Nissan and Alfa-Romeo/Maserati stores in Idaho that RFJ had picked up and renamed under the Dave Smith banner.

Sonic CEO David Smith at that time called the Dave Smith business "an amazing and storied platform."

"I'm very excited about what we're going to learn from the team there about what they do," David Smith, no relation, told Automotive News in 2021. "The platform sells into 38 or 39 different states across the country. It's really fascinating."