Succeeding among the giants: How one-location dealers are finding ways to compete with large dealer groups

Bill Headshot
Updated Jun 13, 2019

D&K Truck Company is one of several single-location truck dealers that is thriving in a competitive environment

Standing in front of his dealership in rural Lima, Ohio, S&S Volvo Sales Manager John Morman can see two competing dealerships across the street, both part of dealer groups.

“All of our competition is dealer groups; we face some of the biggest ones out there,” he says, adding those two groups own several dealerships in his market area.

Such is the case for many single-location dealers. As dealer groups become more prevalent in the retail new truck industry, it’s becoming more difficult for one-shop dealerships to compete. After all, dealer groups have more resources, more buying power and more staff to help them sell and service more trucks.

Clearly, single-location dealers have their challenges. However, several dealerships share how they not only survive, but successfully compete with their well-heeled counterparts.

Fighting an uphill battle

These dealerships face several challenges in competing with dealer groups; however, a few clearly are top of mind.

“The obvious one is bulk purchasing power for better pricing on parts. We buy one truckload of brake drums, for example, and [dealer groups] buy 50 truckloads of brake drums,” Morman says.

D&K Truck CenterAnd it doesn’t stop at purchasing parts, he says. It includes everything from bulk oil to tooling for the service department to office supplies. “We don’t have the buying power they do.”

Ed Bennett, president, D&K Truck Co., agrees. The competing dealers are able to buy parts in such bulk that it makes it difficult for the Lansing, Mich.-based Freightliner and Western Star dealership to compete on price.

“They buy trailer loads because then they ship them out to their multiple locations. We’re one store and we have to find the space to stock it,” Bennett says. “We’ve been willing to invest in a larger parts inventory so we have the parts and we can sell them at a competitive price.”

Matching the pay and benefits of the competition to hire and retain employees also can be a challenge for single-location dealerships.

“Because of our sales volume, we can only afford X number of dollars for a certain position,” says Keith Rutherford, owner of Shreveport, La.-based Eagle Truck Center, which sells mostly Class 4-6 Hino, Isuzu and Mitsubishi Fuso trucks.

“A position pays a certain amount because that’s the volume [that department] does. With a larger group the sales are a lot higher, so the [pay] scale can be higher. Are they paying double? No, but they can be as much as 15 percent higher,” Rutherford says.

Morman says S&S Volvo believes pay scale isn’t an issue but being able to offer a competitive benefits package is. Because of the dealership’s smaller number of employees, the company has difficulty getting better rates to offer its staff low-cost health insurance.

Hans Dabernig, president and dealer principal, Hans’ Freightliner of Cleveland, says he has eight dealerships around him and finding dependable technicians can be difficult. To combat this, the dealer pays for the certifications of all its technicians.

Another advantage dealer groups have over lone dealerships is a distribution network for parts and truck inventory. If one dealer is in need of a part or truck, it can simply get them from another within its group. In the case of trucks, if a customer walks onto the lot of a single-location dealer wanting a vehicle fitted with options the dealer doesn’t have, it can be tough for that dealer to obtain it.

H&K Truck Center“We can still get it but it’s usually more costly because I have to try to get that truck from another company and, even though it’s a dealer-to-dealer transfer, there’s usually a small markup there. With dealer groups, it’s just an internal swap,” Morman says.

Single-location dealerships also must find ways to expand their base of customers.

“With the big companies that have multiple locations, you can cover a lot of area. For us, the challenge is reaching customers that aren’t in our area,” says Vanessa Ciervo, chief operating officer of South Plainfield, N.J.-based H.K. Truck Center, a Hino and Mitsubishi Fuso dealer.

“The way we combat that is we offer pick-up and delivery service and we also have loaner cars here,” Ciervo says. The dealership offers these services for customers as far as 50 miles away, she adds.

Other dealerships offer similar services. Hans’ Freightliner picks up trucks free of charge when they need service, including a customer 100 miles away. In addition to pick-up and delivery service for trucks under warranty, D&K Truck sends out five delivery vehicles daily to deliver parts to customers 75 miles away.

Keys to success

Considering these challenges, it might seem single-location dealerships are overmatched. Such is not the case. Truck dealership veterans have learned to focus on certain aspects of the business to even the odds.

One way one-shop dealers say they can get the upper hand on the bigger competition is through the personal relationships they develop.

S&S Volvo“We’re like a family here. We know everybody,” says Ciervo. “You call us and we know who you are and you know who you are talking to. I think you lose that sometimes with the bigger group dealership.”

Morman says S&S Volvo turns customers into family and friends and one of the main ways it does this is by supporting the communities in its market area.

The dealership has played a large sponsorship role in county fairs for more than two decades. For example, children involved in 4-H and the National FFA Organization will look for sponsors for projects they work on leading up to the county fair and then auction those projects at the fair. S&S sponsors projects and then buys many of them at the fairs.

Beyond the philanthropy of supporting the community, the dealership’s involvement develops a connection with its customers.

“It’s name recognition,” Morman says. “And all the trucking company owners and executives have kids with these projects so they definitely recognize who goes in and purchases their children’s projects.”

Eagle Truck Center is always looking for ways to optimize communication with its customers, whether it’s a phone call, text or email, “not only during a repair or sales process, but after,” Rutherford says.

“I also want to get more into surveys to find out what we did right, what we did wrong, how we can improve,” he says. “If someone is dissatisfied, I want to meet with them and nip it in the bud — give us the opportunity to make it right.”

Expanded hours for the parts, service and sales departments is another way single-location dealerships compete with dealer groups.

H.K. Truck Center has extended service hours until 10 p.m. on Tuesdays, Wednesdays and Thursdays.

“If a business’ day ends at 5 p.m., you can drop off your truck for service and it will be ready for you first thing in the morning, whether we deliver it back to your location at night or you can stop and pick up your truck in the morning when we open at 7 a.m.,” Ciervo says. In addition, the dealership’s service and parts departments are open on Saturdays from 7 a.m. to 3:30 p.m.

The parts and service departments at Hans’ Freightliner are open from 7 a.m. to 11 p.m., Tuesday through Friday, and from 8 a.m. to 4:30 p.m. on Mondays and Saturdays, “which are better hours than our competitors,” Dabernig says.

Eagle Truck Center will open its service department on a Saturday if it can schedule at least two or three trucks. “We’ll come in, knock those jobs out in the morning and those customers are ready to go. We’ll do the work while they wait,” Rutherford says.

S&S Volvo parts and service departments are open 7 a.m. to midnight, Monday through Friday, and from 7 a.m. to 4 p.m. on Saturdays. The dealership also offers after-hours emergency service.

Eagle Truck CenterWhat’s more, Morman says customers “have all of our contacts, whether it’s sales, service or parts. There is a way for our customers to get a hold of us after hours and we come in and take care of what we need to take care of.”

Morman adds that being a single location enables the dealership to be nimble and make decisions quickly. For D&K Truck Co., Bennett says a key factor in the dealership’s ability to compete is in the quality of its employees.

“The way we thrive is by investing in people. While they’re spending money on locations, I invest in people,” Bennett says. “I just think my people are better — my sales manager, parts manager and service manager. I’m paying a little more to get the better people, but I still think that helps.”

Though competing with dealer groups can seem daunting at times, several single-store dealerships are proving they can compete with them through strong relationships, communication, pick-up and drop-off service, extended parts and service hours and quality employees.

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