Chris Brogan: What led to the start of Motorphilia instead of an asphalt dealership?
Aaron Smith: I started Motorphilia after seeing how corrupt the car dealer market is and how it baffles me that as much as people love cars, they (for the most part) hate going to auto dealerships to buy cars. Iâ€™m wanting to end this and Iâ€™m trying to change the way car deals work for everyone.
We actually are still technically a â€œbrick and mortarâ€ dealership and we have a location in Georgetown, TX where we store and shoot our cars in a larger aircraft hangar. We are actually licensed and bonded in the State of Texas as an independent auto dealership and initially, we started off as a spin-off from a local BMW dealerâ€™s eBay store which I started back in late 2002.
The store did very well and I became on of eBaymotorsâ€™ top sellers and as a result of being involved with this, I was able to put together processes that streamlined the whole online purchasing experience for customers.
After establishing a good relation with the people of eBaymotors, I was invited to help write a law that would allow car deals on the internet to be moved outside of â€œbrick and mortarâ€ dealerships in Texas in April 2007 and 4 days after this law was passed, I started Motorphilia and sent in my letter of resignation to the BMW dealer I was working with for the past 5 years and made an offer to buy out all of their equipment and rights to their eBay store.
Another one of my good clients offered to let me rent his aircraft hangar about 20 miles outside of Austin and we were set to go . . .
Once we were licensed about 2 months later, I took everything I saved and invested it into a floor plan that allowed me to get $150,000 credit to buy cars and then Motorphilia was opened for business.
About a year after being opened, I realized that eBay was dying and I decided to start moving away from using this as our main sales venue and I realized that what eBay initially offered as a way for people to find trust worthy sellers, but there was a new medium to establish trust with people online. That was through social media and through developing real relationships with people and, essentially, bringing small-town business to the internet.
Now Iâ€™ve made a commitment to continually find ways to connect with people and focus on the establishment of solid relationship building and, also, providing valuable and credible information about cars to our clients and make Motorphilia the most trusted source for automotive information and the simplest method for people to find the right car while saving time, money, and dealership hassles.
In the end, I want for people to experience buyerâ€™s glee -like yourself.
Thatâ€™s what warms my heart and makes doing this everyday worth it to me and itâ€™s our goal to scale out soon and help more people and change the was that the car business works across the United States, and hopefully business, in general.
How many cars are you processing right now on a good month?
18 to 20. We really canâ€™t handle much more than this right now. Weâ€™re currently working on scaling out so that we can do more and weâ€™re considering opening up to select investors so that we can increases our buying power.
What do you do to instill trust in people remotely? I mean, we met once, and I’ve ridden around Austin with you once, but what about sight unseen? How do you convince people to mail you big checks?
People donâ€™t want to be sold –well not the people I work with. Iâ€™ve found people like information and transparency. Weâ€™re about helping people make good choices, not convincing them to buy something they donâ€™t want.
I think one thing that people like about Motorphilia vs traditional dealers is that because of the way our business model works, we have no commitment to ant one piece of inventory or brand.
For an example, as with you, I didnâ€™t have to try to convince you that you could like another color or an automatic transmission with your Camaro. I just pulled up my options with the auction network and found want you wanted in a couple different areas and then selected the best one to meet what you were looking for and established pricing based upon the market averages and I got it for you once I got the ok from you.
There was no pitch, I just gave you the facts, and we worked extra hard on the backend to verify the accuracy of the information that was given to you.
This is how I am with all of my clients though. For me, credibility is critical.
As for why people give us big checks? I donâ€™t know. Iâ€™ve been doing this for almost 10 years and itâ€™s not too hard for people to talk to someone who has worked with me.
I guess one other element that helps is that weâ€™re not into people making rash decisions or letting them act on impulse. We want to help people take their time and I think when you do this, people realize that youâ€™re not just trying to sell them some metal, but you really do care. Does that make sense?
I also think the Facebook element helps because people see what weâ€™re upto on a regular basis and who weâ€™re helping. For me, itâ€™s not so much a marketing thing though as way to celebrate helping someone.
I mean, Meg and I were just so happy when you got your car. That made our day and to see that you are enjoying it, is wonderful!
How do you think dealerships are going to change in the next few years?
Dealerships are no longer needed in the traditional sense, they are just distribution points with bloated overhead and egos to match: Thatâ€™s it. I believe the future of this business is set in creating a system that helps people make good choices and doesnâ€™t scare them into thinking they need to buy a new car all of the time. I see a service that matches people who are selling with people who are looking and it assures credibility by peopleâ€™s relationships already being established and working off referrals. On the new car side, dealerships should scale down with a few sample cars and allow people to order and have the cars dropped off at their house. As foe trades, they become part of this network where people are helping each other out. I believe in something more alive and organic being possible â€“ if that makes any sense.
Iâ€™ve actually been working on the concept of setting up remote Motorphilia locations where people can place their orders, but Iâ€™m still teetering on the idea if itâ€™s good or not at this point.
What are you doing to market that others haven’t quite figured out?
I believe itâ€™s been the fact that Iâ€™ve been doing this on faith and the growing belief that more than looking at balance sheets, itâ€™s looking at people and caring for then and continually looking at ways to help others have easier and fuller lives that weâ€™re finding our niche. Chris, we really do give a damn about you and all of our clients.
We are profitable, by the way, and weâ€™re getting considerably stronger financially every single month, but this is not our focus.
One reason why Iâ€™ve never wanted to take on financial partners or investors at this point is that I could care less about getting rich doing this and I care far more knowing that we helped someone have a little bit better life today and that we helped someone make a good choice that we saved them money and allowed them some more time on what really mattered most:living their life.
This is also the cross roads where I see us right now, in how do we grow? This is the next question Iâ€™m trying to answer.
Aaron Smith is the man behind Motorphilia. I recently bought a car from Aaron’s company, and this interview came out of me wanting to document the experience, plus tell dealerships why I went with a virtual dealership in Texas over my local choices.