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Why a 2x auction founder is flipping the wholesale script—and paying dealers when they sell cars

Featuring Joe Neiman, President of DealerClub

Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter.

Today’s guest is Joe Neiman, President of DealerClub, part of the Cars Commerce ecosystem. We dive into the details behind his $25M exit, how reputation-based wholesale is shaking up the auction block, why he’s paying dealers to sell on DealerClub, and more.

Stream the full episode now on YouTube, Spotify, or Apple.

1. Knowing your customer can be game-changing.

Joe, the co-founder of ACV Auctions, attributes a lot of his success in wholesale operations to intuition.  

“I focus my attention and energy on the psyche of the customer. And that's what I think I've got a better understanding (of) than anybody else.” 

It’s not about being able to predict the future of wholesale; it’s about that gut feeling. 

 2. Put yourself in the shoes of those you aim to serve.

Joe is a former dealer himself and leans heavily on his experience in the business.  

“I've got a really keen understanding because I was a dealer for a lot of years, and I was a proactive dealer who did online retail and then online wholesale…before anybody else, or at least (I) was at the early end of the curve.”

There are huge opportunities in wholesale, and now is the time to capitalize on those opportunities.

3. Wholesale is about the seller and buyer.    

Joe credits his years with ACV as a founder giving him a more well-rounded understanding of the wholesale business.

“You've got a huge responsibility as the curator of a marketplace to empower both sides but also ensure that you're not creating any disproportionate-like balances.”

A marketplace is like a seesaw, and it can tip in favor of one side or the other—sometimes with unintentional outcomes.

4. Get back to the basics of the business. 

The wholesale process has abandoned some valuable fundamentals of the business.

“I think…wholesale has evolved to kind of, unintentionally…this hands-off, you know, ‘we'll be a full-service provider, we'll do everything for you…And I just don't think that's reality.”

Dealers tend to look for any and every excuse in the world to avoid having to deal with wholesale—but they're just cars. 

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5. More dealers should be making wholesale a priority.      

Wholesale is the biggest opportunity in every single dealership.

There’s so many dealerships that just turn a blind eye to tens, twenties, hundreds…thousands of cars a year that are going through their ecosystem, going through their books. And they're just like, ‘uh, I don't like it because it's not my core product.’”

Not seeing wholesale as an opportunity is akin to saying 10 or 15 years ago that you can’t see selling cars on the internet. 

6. Start thinking differently about wholesale.   

A lot of dealers don’t see the value in wholesale because they conceptualize it entirely wrong. 

“(If) you want a new 60-inch flat screen TV, you could either go to Best Buy and pay $600 for it, or you could buy one in a back alley that fell off a truck from a guy for 250. It's the same exact television, but it's worth two different amounts in two different settings based on who is bringing that product to market.”

That's exactly what’s happening in wholesale.

7. Transparency is key.  

DealerClub empowers dealers by putting everything front and center. 

“You're going to see based on other people's ratings, if they're a quality seller to do business with…We're going to break out the stats. Are they good with producing titles? Are they good with describing the cars? What's their sell-through rate?”

Buyers don't want to stand in the lanes of sellers who have 10% or 20% abysmal sell-through rate.

8. Trust drives a successful wholesale business model.

DealerClub takes a traditional, human-centered approach to wholesale operations—even as a tech platform. 

“The other auction platforms have kind of went on this crusade to go and tell all of us that describing a car is really hard and that you need a lot of technology and a lot of training and a lot of electronics to be able to…walk around a car and describe a car. And I'm here to say that that's really not true.”

The wholesale marketplace operates on the premise that trustworthy human beings are inclined to be more upfront.

9. The ‘trust system’ benefits everyone involved in the process.

Because DealerClub doesn’t have an inspection force—which can be very expensive—the company is able to pay the seller to sell the car.

“There is no sell fee. We're generally paying a dealer $250 when they sell a car on the platform. There's no funny business here. If the car sells for $10,000 on the platform, the seller is receiving $10,250.” 

This is a much better business model than a dealer simply pawning off their wholesale operations, hoping that they get what the vehicle’s worth.  

10. Use wholesale to elevate your brand. 

Treat wholesale like you would other aspects of your operations. 

“You focus so hard in retail to…have good Google Reviews from your customers, because that makes it easier. It greases the skids for the next customer to come in and buy a car from you. Do the exact same thing in wholesale.”

Retail shouldn’t be the only definitive aspect of a dealership’s business.

Stream the full episode now on YouTube, Spotify, or Apple.

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