One thing that you’ve most likely heard about being a car dealer is that you can make a lot of money. This is only one of the perks that you get from going this career route.
You won’t need a college education to begin selling cars. That means you won’t have to throw your earnings at a huge student loan.
There’s also the opportunity for you to open up your own dealership. There are a few things that you’ll need to keep in mind before you get your business going.
Keep reading to learn everything that goes into opening a successful car dealership.
Do Market Research
Before you get to the fun parts of running an auto dealership, you’re going to have to do some market research. It’s not the most glamorous part of the process, but it’s necessary.
What types of customers are there in your area? What are they looking for in a car? What attracts them and detracts them from a particular dealership?
Once you learn more about your potential buyers, it’s time to research your competition. If there’s already a bunch of used dealerships in your area, you may not have much luck if you open another one, for example.
If you still wanted to sell used cars, the option isn’t off the table. You’ll simply have to do some additional research to get a few ideas of how to stand out in the crowd.
Decide What Kind of Dealership You Want to Open
Now that you’ve finished your market research you can decide what kind of auto dealer you want to be. New dealers are also known as franchised dealerships. They have an agreement with manufacturers to sell all the latest models.
As the name suggests, used dealerships only sell used cars. Wholesale dealers don’t sell on a retail basis. They only work with other dealers.
Brokers don’t do the selling. They help others find a dealership or vehicle and assist with the purchase. If there are too many dealerships in your area, you could become a recycler.
Recyclers buy vehicles and dismantle them. They then sell the individual parts and accessories to the public.
Learn About the Regulations
It’s time to do a little more homework. Most states have regulations in place that you’ll need to read up on before you can run a dealership.
For example, if you own a used dealership, you’ll be required to provide all your customers with a buyer’s guide. You also can’t prevent a buyer from checking out the vehicle that they’re interested in. They have to be able to test drive it.
Consider the Costs
There are certain costs that come with running any business. That includes car dealerships. You won’t be able to sell vehicles out of your backyard.
You’ll need to pay a lease on a location. You’ll have to fill your office with equipment. After all, selling cars involves a lot of paperwork. Printers and computers are a must.
If you’re going to hire employees, you’ll need to consider their payroll expenses, and you won’t be able to sell cars if nobody knows about you. You’ll have to budget for marketing.
If you’re going to be sending cars to other customers and dealerships, you’ll have to invest in something that will keep the cars safe during transport. You can go here to learn more about protection films.
Register Your Dealership
You can’t officially own a dealership unless you do the proper paperwork. The first step is getting your business license. After that, you’ll need a special dealer license.
In most cases, you have to register with the DMV, and if you’re hiring employees, you’ll need to get an EIN from the IRS. Your state may have some additional steps that you have to take. You’ll need to check up on the requirements or risk your business being shut down.
Build Your Inventory
If you’re selling new cars, manufacturers will provide you with vehicles to sell. Selling used cars is a little more complicated because you’ll have to build your inventory on your own.
Registering with auctions will give you access to low-cost cars. You can also use social media to get your hands on stock. As you can see, you’ll be starting small and working your way up as you make more money.
Develop Your Online Presence
Again, it’s going to be hard to sell cars if people don’t know about your business. That means you’re going to need to develop your online presence.
You’ll have to build a website where customers can look at your current merchandise. Be sure to link your website to your social media account. You can use one to promote the other.
Consider Hiring a Service Department
No matter if you’re selling new vehicles or older ones, one thing remains true. They have a nasty habit of messing up on people. When that happens, customers are going to look for a mechanic to take care of the problem for them.
You could be that mechanic. Bring in a little extra revenue by hiring a service department that can make repairs.
Your Guide to Becoming a Car Dealer
Becoming a car dealer can make you quite a bit of money if you’re good at selling vehicles. There’s also a lot of room for growth.
You can go from working for a company to starting your own. Follow the steps that we’ve provided and you’ll get your new business up and running.
It’s hard to sell cars if you don’t know much about them. Visit our blog to brush up on all your vehicle knowledge.