Joe Mallette
Joe Mallette
American Auto Brokers
Owner

With the economy stagnating, fuel prices soaring and sales at his store stalling, Joe Mallette questioned whether he could stay in the truck business. The answer seemed to pull him toward a new retail strategy until he realized that what he needed to do was refocus on the fundamentals, not shift gears.

“I tried to reinvent myself, and it was a mistake,” Mallette said. “I didn’t have to reinvent myself. What I had to do was get on the new economy.”

Situated on an industrial park in San Antonio, his dealership, American Auto Brokers, receives no drive-by traffic. Mallette said he relies on internet and word-of-mouth advertising to promote the dealership and an optimal inventory mix to drive the bottom line. He shared his two tips for thriving in a changing economy.

“Whatever people wanted before the price of gas went up, they still want it,” Mallette said. “They just aren’t willing to pay as much. If you can make it make sense price-wise, they will still buy it.”

Go With What You Know

Mallette initially tried to address his inventory problem by adding fuel-efficient Honda Accords and Toyota Camrys to his inventory. The tactic backfired, he found, because it essentially created another inventory problem. Not only were the cars at odds with Mallette’s branding and trucksintexas.com website address, but he wasn’t able to buy them at a price low enough for him to be competitive with other dealers.

“I was chasing the cars everybody’s after,” Mallette said.

He instead decided to concentrate on the trucks that “perform a task”: Dodge diesels and eight-cylinder Ford and Chevy half-tons with enough passenger capacity to double as a family car. Carrying “ego buys” no longer made sense, as recreational truck and SUV buyers were looking elsewhere.

“By going after the car that everybody was running from and price-pointing it on the internet at a price that was just too good to be true, I was able to make it work,” Mallette said. “The same people still live in your neighborhood. For families of five or six people, if gas is $8 per gallon, they’ve still got to have that Suburban. They’re just making better buys.”

Price With the Market

To ensure he offers his customers the right price, Mallette uses a two-prong strategy: He avoids paying too much at auction, and he routinely adjusts his prices to keep them in line with his competitors.

“Right now, we’re focusing on showing truck buyers a value they can’t resist,” Mallette said. “If I make a great buy, the customer’s going to make a great buy. You cannot get greedy: Make your margin and sell the car. This is no time to try to take the cover off the ball.”

In determining how to respond to his situation, Mallette acknowledges that he was initially uncertain on how to proceed. His 20-plus years in the business had not prepared him for the unique convergence of events confronting him, and he stumbled a bit before finding his footing. Mallette encourages colleagues also facing these challenges to not lose hope.

“You’ve got to figure out a way to sell cars again,” Mallette said. “If I see this again, I will be lost for a week, not a month. Our survival was at stake. If we didn’t react quickly, it had the potential to put us out of business.”

What Inventory and Pricing Tactics Will Work for You?

If you’re looking for the scoop on which cars and trucks are most in demand with your customers – and how much you can expect to charge – Cars.com offers robust, market-based reporting tools that can help. These OnlineAdReports are included for no additional charge with your Cars.com advertising package and can be accessed through MyDealerCenter. To learn more about them, please contact your sales representative or call 800.298.1460.

Additional Resources

Looking for additional tips you can implement in your store today to drive more traffic with your online advertising and desk more deals with your internet sales processes? Check out Cars.com’s DealerCenter. Here, you can read previous editions of our DealerADvantage newsletter or listen to archived recordings of our DealerADvantage Live webinar series.