Today marks an important anniversary for vAuto.

Six years ago, vAuto’s then-president Keith Jezek and I flew to Atlanta to sign the paperwork that brought our company into the Cox Automotive family.

We’d had other suitors. There were other companies willing to pay the nine-figure sum we sought for vAuto’s 3,000-plus dealer client base, our team of nearly 100 employees, and our game-changing inventory management technologies.

But we weren’t just looking for a pay-off. We wanted a like-minded partner. Someone who shared our mission to help dealers become better, more profitable retailers. Someone who could stomach the consequence of our mission, which often meant challenging the status quo for the betterment of our dealer clients. Someone who shared our belief that our people deserved to be paid well and treated like family.

I remember looking at Keith, with pen in hand. Pausing a moment before signing away the company we’d built over six sometimes difficult years. He leaned in. “We’re good, Dale,” he whispered. “We can trust these guys. They’re like us. I have no doubt vAuto and our team will prosper with this partnership.”

Six years later, I’m happy to report Keith was spot-on. vAuto’s client base has tripled to more than 9,000 dealers in North America, with $200 million in annual revenues. Our mission hasn’t changed. We continue to have the latitude to bring game-changing innovations to dealers and strive to help them be more successful.

But most important, all of the key leaders who helped make vAuto great remain with the company—a rare thing in the world of mergers and acquisitions, and an ongoing testimony to the power of a corporate culture that inspires a shared commitment to the success of our clients and team members.

There’s no question in my mind that the Cox Automotive culture owes to the integrity, values and vision of our corporate parent, Cox Enterprises, and its top leaders, Alex Taylor, executive vice president and COO, and John Dyer, President and CEO, as well as Sandy Schwartz, president of Cox Automotive.

Together, these leaders inspire and motivate all of us to serve our dealer clients to the best of our abilities.

I see this commitment to client success in my travels across the country as I join Cox Automotive field team members and meet with dealers.

I’m continually struck by the field teams’ collective desire and willingness to go the extra mile to help dealers improve their businesses. They know that gaining a dealer’s confidence, respect and trust requires taking the time to understand their business challenges and opportunities, and demonstrating sincere dedication and interest to each dealer’s cause.

My interactions with field team members provide ongoing inspiration and motivation. Their spirit is infectious. It makes me work harder to be a better steward of Cox Automotive and servant of our industry.

As I reflect on this anniversary, I must acknowledge several individuals who are directly responsible for vAuto’s early and ongoing success. Without them, there simply wouldn’t have been an opportunity for me to take a semi-crazy idea to market, much less transform the way dealers manage their new and used vehicle inventories:

Nancy Pollak: I am truly blessed to have Nancy by my side. When I first shared my idea for vAuto, she said, “Go for it.” Many months later, after I’d mortgaged our house and spent our savings to get my idea off the ground, her confidence and faith in me remained resolute. She stood in my corner during the darkest early days of vAuto, when our financial security and future, as well as my commitment to my own idea, was anything but certain. She is the rock that helps me roll. I’m ever-grateful that she believed in me then, and continues to believe in me today.

Mike Chiovari, vAuto’s vice president of IT operations. In the late 1980s, we hired Mike during his Christmas break from college to provide temporary help in our dealership’s accounting department. He proved to be a whiz, both with numbers and technology. In the earliest days of vAuto, Mike was the first guy to say “yes” when I asked him to help me start a new company. He committed to the venture, even though I didn’t really have the means to properly reward him for all the long hours of brainstorming and white-boarding ideas around my kitchen table.

Mike Krupka, managing director of Bain Capital Investments. Mike led the team that evaluated vAuto as an investment opportunity. I’d come to Mike with essentially empty pockets. Mike helped me understand that while our ideas and solution had potential to scale, we faced a significant obstacle—me. I simply couldn’t be in all the places I needed to be, nor was I the right guy to ensure our fledgling company had the right capacity, people and process to grow the way Mike thought it could and should. Our conversations were sometimes hot and humbling, but I’m ever-grateful for the lessons I learned about business, life and myself.

John Griffin, vice president of Performance Management for Cox Automotive. John was one of my first vAuto dealer clients. He understood how our Provision system would help him successfully sell more used vehicles in the Internet age. But I was most impressed by the way John managed his used vehicle team, leading them to adapt to a new, technology-driven way of doing business. I knew he’d be the perfect person to formalize our vision of providing a coach, or Performance Manager, for every vAuto client. At the time, the idea of a Performance Manager was an industry first. But through John’s leadership, the concept has become a norm for automotive retail solutions providers in Cox Automotive and beyond.

Randy Kobat, senior vice president, Cox Automotive. It’s a big deal when a start-up company comes of age. It’s customary to see a plateau in both growth and innovation. Thanks to Randy, who joined vAuto in January 2014, vAuto continues to defy these business norms. We serve more dealers across North America than ever before, and we continue to advance our mission of bringing innovative insights and solutions to the market.

The Band (Mandi Fang, Chris Stutsman, David Rice and David Hawkins). Before starting vAuto, I’d worked with a bright, young team that helped me create and build Digital Motorworks, the company that pioneered data transfer technology to help dealers put new/used vehicle inventory online. With the guidance and resources from Bain Capital in hand, I sounded a little bit like Joliet Jake in The Blues Brothers as I called each of them: “I’m putting the band back together….” They all signed on, and they remain a critical part of the innovation and product development brain trust in Austin, Texas for Cox Automotive and vAuto.

In addition to looking back, this anniversary also prompts me to ponder the future.

I think we can all agree that the pace of change in the car business will only continue to accelerate. We also know that change, especially fast-paced change, creates disruption, and sometimes chaos.

But this environment also creates a need for innovation, and it provides opportunity for those with the desire, know-how, means and will to embrace change and help shape its course.

Such conditions play to the strengths of vAuto and Cox Automotive, and I see a very bright future for our organization and our dealer clients.

Our success will ultimately depend on how well we live up to John Dyer’s challenge to act now, be bold and stay true in everything we do.


Most dealers agree that if you’re going to profitably and successfully sell a lot of used vehicles, there are many things you have to get right.

With this thought in mind, I analyzed the inventories of 60 dealers that made this year’s Automotive News’ “Top 100 Dealership Groups Ranked By Used Vehicle Sales” report. My goal is to help other dealers understand the operational benchmarks and metrics these groups follow to outperform their peers.

Market Days Supply: This metric measures the market supply and demand of used vehicles based on the number of competing units available in a market, and sales over the past 45 days. The best dealers review this metric in two ways-on a per-car basis as they make appraising, acquisition and pricing decisions, and on a total inventory basis as they gauge the overall desirability of their units in stock. In either case, dealers strive to find vehicles, and maintain their inventories, with a low Market Days Supply, which signals fewer competing units and a greater likelihood of a fast retail sale. My analysis shows the 60 dealer groups achieve an overall Market Days Supply average of 69 days for their inventories-a standard that suggests a good degree of discipline as they acquire inventory.

Cost to Market: This metric measures the difference between your cost to own/recondition a vehicle and current retail prices for competing cars. Top-performing dealers strive to keep a lid on their Cost to Market metrics to maximize the spread for their front-end profit. The inventories of the 60 dealer groups show a total Cost to Market ratio of 88 percent, which translates to a 12 percent spread for front-end gross. Interestingly, the 88 percent Cost to Market ratio is higher than the 85 percent benchmark I typically recommend-a sign, I believe, that keeping a vigilant eye on costs remains a persistent challenge for even the best dealers.

Price to Market: This metric shows how your vehicle prices compare to those of competing vehicles in the market. Many dealers religiously reference the Price to Market ratio as they decide how to position and price a vehicle in their market. The metric is also useful at an inventory-level view to identify a dealer’s pricing strategy. For example, if the total inventory Price to Market runs above 100 percent, a dealer either has a lot of vehicles that, based on their Market Days Supply, merit an above-market asking price or, more likely, the dealer uses price to maximize front-end gross. Among the 60 dealers in my analysis, only a few showed overall inventory Price to Market ratios above 100 percent. The average runs 98 percent-a figure that indicates a balanced approach of pricing vehicles based on the competition, age in inventory, profit objective, and other factors.

Average days in inventory: The 60 dealer groups showed an average days in inventory of 37 days-a figure that suggests room for improvement. I typically recommend that dealers maintain at least 55 percent of their inventory under 30 days of age to ensure sufficient sales velocity and profitability, given today’s era of price competition and margin compression. To meet this standard, a dealer’s average age in inventory should run closer to 30 days, or even less. I was glad to see a handful of dealers on the list with average days in inventory at 25 days or less.

Annual inventory turns: As a group, the 60 dealers turned their inventories an average of 13 times a year-exactly in line with the benchmark I recommend for today’s market conditions. I wasn’t at all surprised to see the following characteristics of dealers with average annual inventory turns at six times or less: Their average days in inventory often ran 50 days and higher, and their Price to Market metrics often ran north of 100 percent.

Average inventory cost: It’s only somewhat useful to compare the average inventory investment across a large number of dealers. The reason: Local markets vary as much as dealer preferences for the inventory they carry. The average inventory investment among the 60 dealers ran $19,852, a figure that appears to be skewed by a few dealers with averages above $50,000 (figures that owe, I suspect, to the high-line leanings of the dealers and their markets). The key take-away: Whatever your average inventory investment, you should strive to lower it to maximize your return on investment and mitigate risk.

Overall, my analysis suggests that metrics-driven management matters an awful lot to a majority of the dealer groups on the Top 100 list. I also have no doubt that much of their success owes to the consistency and diligence they apply to meeting these operational standards every day.

But we should also acknowledge another take-away from my analysis: Even among the best, there’s always room for improvement.


I thought I’d put out a plug for my friend, Tommy Gibbs, who is hosting a half-day Used Car Workshop on Wednesday, Oct. 19, in Chicago.

Tommy doesn’t do many public workshops. He’s normally busy traveling the country and meeting with dealers/dealer groups in private sessions where he helps them tune up their used vehicle operations.

Over the years, Tommy’s been a respected friend and teacher for me. Every time we talk, I come away with an insight or pearl of wisdom that makes me smarter about the business of retailing used vehicles.

I’m told seats are limited for Tommy’s upcoming Chicago workshop. I’d recommend it for dealers and used vehicle managers looking to take their used vehicle operations to the next level and set the stage for a strong performance in 2017.

You can get more information on Tommy’s workshop here.


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