Pros and cons of a buying a dealership

by a searcher from Stanford University - Graduate School of Business

1 year ago

Hi All - 

I am investigating buying a dealership business for a higher end, consumer oriented product. Does anyone have experience with owner and/or operating a dealership business? Would love to hear any pros and cons.

Many thanks!
Jory

0 likes
88 views
2 comments

searcher

Getting and retaining talent in the automotive industry has been particularly difficult, but many industries have felt that over the last few years. However, what's proven to be the most difficult since COVID is sourcing inventory at reasonable prices, allowing you (the dealer) to maintain margins. What was once a capital-intensive business seems to be moving to an "inventory light" business model, which allows the new car dealers to invest capital in their used car, parts, and service operations. With Carvana, Vroom, and even Carmax, which sells approx. 40% of their inventory online it's mainly becoming a platform play, in my opinion.

1 year ago | like reply | 1 like

intermediary from Royal Melbourne Institute of Technology

My two cents....I'm not a fan of giving other people/businesses having a say or any element of control over my business. Sure, this model may de-risk things for you (especially upfront). But once you know the business inside out, you will perceive risk differently and may regret the cost and control elements that this model assumes.

1 year ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.