The US is a nation of entrepreneurs. From the giants who started this country to the more than 30 million small businesses that currently dominate it, the concept of pulling yourself up by your bootstraps to make a name for yourself is far from rare. One of the most booming markets in American society today is the auto industry; nearly 70% of Americans possess a driver’s license, creating a high demand for quality vehicles.
With high demand comes great opportunity. Thanks to recent technological and social advancements, getting the ball rolling on your very own car dealership is easier than ever. Let’s take a look at some of the most important steps you’ll need to follow if you want to salvage cars online and turn a profit.
Calculate The Costs
First and foremost is funding. This means determining not only what you’d like the size and reach of your dealership business to be, but also what you can safely afford. Here are three of the most common options available to startups.
- Self-funding: Some people are fortunate enough to have a significant amount of money available to them through various financial resources. Although you’ll have complete control over your business and where its money is allocated, you alone will be responsible if major losses occur.
- Venture capital: Many businesses rely on investors to get set up initially. Venture capital is often given in exchange for a piece of the pie; you’ll almost definitely need to give up a controlling stake in your company in return for the money it needs to get started.
- Small business loan: Small business loans can give you the best of both worlds provided that you have a good credit history and are a responsible spender. By contacting various banks and lending institutions, you’ll be able to compare interest rates and find the best deal.
Determine Your Demographic and Region
Once you have the capital needed to get up and running, you’ll need to figure out just who you’re selling to. This (unsurprisingly) begins with what exactly you’re selling. Running an online dealership is more complex than simply deciding to salvage cars online to flip and resell; with so many different makes, models, and levels of luxury available to choose from, establishing your focus is extremely important. Will you choose affordable used vehicles and target college students and growing families? Or will you lean more towards the upper classes and keep comfort and style at the forefront of your mind?
Fortunately, once you decide, you have a wealth of targeting technologies at your fingertips. Most popular in today’s world is geofencing marketing. This innovative development allows you to hone in on a hyperlocal demographic by creating an invisible “fence” around your region; when potential customers cross that fence — either on their way to the grocery store, through their daily commute, or simply on a casual walk through their neighborhood — they will begin to see ads for your dealership sprinkled into all of their social media platforms and sites. With very little effort, geofencing marketing allows you to reach and communicate with customers that live and work nearby.
Licensing Requirements
Now that you’ve got a marketing plan in mind, all that’s left are the legalities. Each state requires various types of dealers and salespersons to carry certain licenses permitting them to lawfully sell a new or used car to the ordinary consumer as an auto dealer. Where you live determines what steps you’ll need to take; some states are more strict than others, demanding proof of a business sign and an operable telephone on location, while others simply require the completion of a dealership training program.
As long as you take the time to do things right, you’ll discover that establishing your new dealership business is not the huge undertaking you expected. Before you know it, you’ll be interacting with customers and watching their eyes light up as they find the car they’ve been waiting for.