Dealership is a whole system of operations for the sale of a certain type of product.
This transaction occurs as a result of the close interaction of distributors (intermediaries between the buyer and the manufacturer) with manufacturing companies.
Today, dealership is a very profitable form of cooperation, as well as a profitable and promising form of building a business.
The most frequent and profitable type of cooperation in Russia is the business of selling cars. Automobile dealership - this is perhaps the most common type of mediation. It is not difficult to prove this - it is unlikely that there will be a millionaire city in some area where at least 10-20 dealerships for buying and selling cars do not exist.
In recent years, dealer offers from the manufacturer have increased significantly, which explains the high demand for the purchase of new cars. As practice shows, even a small such center can sell about 500-600 cars a year. However, for this business to really make a profit, you need to correctly draw up a dealership business plan and carefully consider all the nuances.
Opening such a company should not save on land, equipment, the number of employees and their wages, and indeed on the construction of the salon. Dealing as a business is a very expensive form of cooperation, so be prepared to invest big money here. Otherwise, you will not receive any profit (profit) from this business. This is the specifics of this business.
Manufacturers and brands
Since this type of entrepreneurship is based on cooperation between companies, you should also choose the right manufacturer who will deliver their cars to the center. When choosing a manufacturer, first of all pay attention to the quality of the machines that he manufactures.
Domestic manufacturers immediately drop out of here, so we will focus only on world-class companies. Remember that all your reputation depends on the quality of products sold by your company, and the higher the level a manufacturer takes on the market, the more chances you have of success.
About the lineup of cars
Before you get a dealership, note that some companies are trying to offer customers (or intermediaries) outdated models. If this is the case, then with such a manufacturer it is better not to deal with or to focus on the choice of an exclusively new lineup of cars.
Cars, especially cars, as well as mobile phones, are updated very quickly. Hence the conclusion - the older the lineup, the less you will have profits from mediation. Remember that buyers are more attracted to new products, rather than outdated generations (even if they are new).
Dealership as a business is the regular purchase of new batches of cars sold under the brand names “restyled version” and “new generation”.
Delivery of spare parts
An important aspect is also how often and harmoniously the manufacturer supplies spare parts to the Russian market. The car, even the most reliable one, breaks down sooner or later, and if the buyer feels a shortage or shortage of spare parts, the prospects for cooperation with such a dealership will be in question (but all modern dealers provide a 2-3 year guarantee for their cars!). By the way, for more profit and solidity, many intermediary companies organize branded service stations near their dealership.
Dealer Center Construction
When constructing such buildings, many businessmen have a number of issues with the local authorities, which sooner or later have to be coordinated somehow. Sometimes it happens that the authorities may prohibit the placement of signs the size of, for example, more than 3-4 meters. As a result of this, in order to run a business properly, you need to have good contacts with administrative authorities.
Dealing as a business is not only an investment in the purchase of land, but also the acquisition of a whole list of technical tools. Now almost all manufacturers and suppliers require dealerships to buy equipment from them, and sometimes even furniture and supplies.
Dealer Location
Your company should be located as close as possible to the buyer, and therefore the place for construction should have good traffic. Often, dealerships are located near the tracks towards large shopping centers. But this is not always enough. When you open your own business, you should well advertise your dealership. It’s best to start by placing signboards and billboards (at least on the highway that has a direction to shopping centers).
Often, such firms do not take into account the simple rules for placing their offices and car dealerships, for which they then pay very dearly from a financial point of view. The fact is that dealerships can not be placed next to the veins of buildings (at a distance of no more than 50 meters) and under high-voltage wires. When building a car dealership, pay special attention to this moment.
Room Area
Dealership as a business is not only one car dealership, where a handful of new cars are located on a few square meters. Such companies should have at least their own office, headquarters, service stations and a warehouse (for storing spare parts). Geographically, the dealer center occupies about 2 hectares of land. Agree, rather difficult conditions for a novice businessman.
Cash investment in an enterprise
As we said earlier, a rather large amount of money will have to be invested in the dealership. For large cities such as Moscow and St. Petersburg, investments in the construction and purchase of necessary equipment amount to about 20-25 million dollars. At the same time, the opening of a premium brand dealership will cost at least $ 35-40 million.
The purchase of equipment will also cost a lot. For the purchase of lifts and other tools, be prepared to spend at least 65 thousand dollars. Plus, the delivery and installation of equipment (additional 20 percent of its total cost will be charged).
Staff
At the moment in Russia there is a great lack of qualified personnel who could professionally conduct their work. For this reason, many companies have to train young professionals on their own.
Should I hurry with hiring employees? The answer to this question is ambiguous. Yes, you should not rush into this, but by the 10th month of the dealership’s work, you should have qualified staff working with your managers and accountants. By this time, your employees must complete the full training course. Of course, all this will happen at your expense.
Sales
How popular your dealership will be depends on the brand name of the brand whose cars you are putting up for sale. As a rule, often the advertising costs are borne by the manufacturer. Therefore, try to cooperate only with the global car manufacturers. In general, offers of dealerships from the manufacturer are a fairly frequent phenomenon, because the benefit from such cooperation is both for the owner of the center and for the concern itself. After all, who else to sell their products to but dealers?
Business sale
The car sales business is a rather serious and risky thing, since the profit rate here is measured in millions.If any investments did not affect the influx of customers (which fortunately rarely happens), the only way out of the situation is to sell the center.
The main amount here is the land and its value. Everything else (equipment, buildings and signs) for the buyer will not be too interesting, since each dealer center remodels the premises to suit their needs (or as the manufacturer says). Therefore, the benefit from this business is minimal.
Hence the conclusion that it is only necessary to put up a dealership for sale when it starts operating at a loss. However, with normal promotion and a smart director, such a car dealership will undoubtedly pay off in the next 1.5-2 years of its existence. Further, it will be possible to boldly open new premises and centers, while maintaining good relations with only one brand manufacturer.
So, we found out how to open a dealer network, and what investments should be made here.
