Transcript 0:00 Yo, you saw it right there, ASOTU CON coming in hot. Tickets are open. Oh. Tickets are selling. I'm telling you, get your tickets. We don't want you to not be there. But today, we have DJ Smokey Smoke to talk. 0:10 Well, he's not here, but we're talking about his talk and Costco hot dogs. [rap music] Everywhere I go, the people really wanna know- Costco hot dogs- [rap music]... who I is and who I be. They stop and they ask me... 0:18 the, the true inflation indicator- [rap music]... and for the ones who need to see. Word on the block, you ought to walk your niece... is a Costco hot dog. But we'll get into that with him in a minute [rap music]... 0:23 to my hat and then they see. Some might hate, but I'm straight, G. Without a doubt. Look, if you ask my kids, Co-Hot- uh, Costco hot dogs are on the top 10 list of greatest things in the world. 0:30 So- [laughs] I, I agree with that. You know why? One of the reasons is that you remember you ate one for, like, three hours. [laughs] Okay. I don't know if my kids do, but I do. I do. 0:42 So, um, we ta- we talked about it all week. We're so excited. Obviously, it's Friday. We got a little extra Friday energy today. Yeah. But- We got some- Look, let, let us just tell you- We got some ready to go... 0:50 that the momentum picking up with ASOTU CON still over two months away is real and legit, and people are buying tickets, and people are calling and s- asking questions and saying, "Can I be there? Can I help? Can I go? 1:01 What hotel do I book?" Right? There's still a lot of things to come. We haven't even announced a single speaker yet. Wait till we announce the speakers. No. 1:08 But look, if you were thinking about it, go to asotucon.com, and we just highly suggest you buy your tickets now because we don't want the sob story later, right? And there's not gonna be- Yeah... 1:19 the text messages like, "Yo" That's cold-blooded. [laughs] I'm, uh... Well, I'm just tr- I'm trying to be uncharacteristically harsh so that people get the message. [laughs] Yes. 'Cause you know what happens? 1:28 Understand, understandably. You know what happens? The sold out thing is gonna appear when someone logs in to get the tickets, and we're gonna start getting a lot of text messages, "Hey, is there anything you can do?" 1:37 That's gonna be a lot of messages. And we really are limited by the venue. Like, we're not joking. This isn't like- It's like, literally, we're not allowed to have more people. 1:44 Like, you'd have to stand outside at that point. Yeah. Period. Yeah. So- This isn't, this isn't us, like, pumping it and then, like, selling out and like, "Oh, there's more tickets. Oh, we just found more." 1:53 There are no more tickets. Once they're sold, they're sold. Um, so enough about that. We hope you go to asotucon.com. And we also, on LinkedIn, just created an event for it. 2:00 So if you're on LinkedIn and you wanna be part of the event, even if you're not part of the event, you know, that, that's... We're gonna be having news and some special stuff there. 2:08 So check us out on LinkedIn if you're not following us on LinkedIn. We noticed yesterday, like, we're going and the LinkedIn following's growing, and the engagement on LinkedIn has been awesome. 2:16 And there are, like, people that are part of our OG community that like, and, and comment, and share ASOTU posts on LinkedIn that don't even follow [laughs] ASOTU on LinkedIn. [laughs] Hey, I get it. 2:29 Look, like, following companies n- is not... You don't wake up i- every morning and be like- It's not usually a cool thing... "What company should I follow on LinkedIn and Facebook," right? 2:37 So we get it, but we would love for more of you to just kind of engage in the community in that way. And, uh, whether, whatever social platform you're on, uh, just be a part of the community. F- and feedback. 2:48 Like, we love comments and- Please... and people saying, "Hey, look, I'm thinking this about that," or y- you know, "I'm not really agreeing with that." We're okay with that, too. Please. Yeah. 2:57 We love, we love when that happens, actually. Uh, we are launching... We're excited. We're launching a new long form podcast- Yes... called Auto Collabs by ASOTU. 3:05 Uh, we got some cover art designed yesterday, which made us all excited because we all know that the cover art is 98% of any podcast. [laughs] Period. Uh, we have some really fun... 3:13 We have dozens and dozens of conversations that we're about to have that we're gonna bring to you long form, not like the show when we're giving you the quick fire, so we can get a little deeper, more meaningful. 3:22 More announcements about that soon. And last but not least, we are about to go from this live stream into the All Things Used Car Clubhouse room. And if you haven't been a part of that- [laughs]... 3:33 you're missing, i- in our opinion- You have to be... the single most valuable conversation in retail automotive every week. We are not exaggerating. Not, not exaggerating. And people, it, people... 3:44 E- I've had these conversations. [laughs] This, this song. You mean on... Ah. You mean on Clubhouse, there's a conversation that I should be, like, locking down my calendar for every week? Yes. The answer is yes. 3:56 It's really honestly surprising how dynamic every single week. We're, I think we're in, uh, approaching or just about to pass episode 60 of that. 4:05 And there's so much moving every single week in auto that the conversations that happen in that are not just, like, hindsight looking or, um, future kind of like, "Hey, maybe this will happen one day." 4:19 There are real practical, tactical things that your team can be doing every single week. 4:23 So if you've got a team or if you're on a team, make sure that at least someone on your team is blocking out that time or blocking out time afterward to listen to the replay- Yeah... 4:33 'cause it is extremely valuable to dealerships and industry partner businesses. Without a doubt. 4:37 We try to chop up some content and bring you some on LinkedIn and Instagram just so you can kind of get a little feel for it. But the real value of the room- Right... 4:43 is that you can be there in the conversation, ask questions, be there real time. Honestly, that, that mentality is really part of the model of how we formed ASOTU CON, right? To be much more- Right... 4:52 collaborative and conversational instead of one person, you know, giving you their thoughts and feelings, and then you get up and go and hear someone else's thoughts and feelings, right? It's a conversation. 5:01 So speaking about someone's thoughts and feelings. [upbeat music] Stop. Segue. Time. All right. We're gonna get into some news. Um, Jonathan Smoke, AKA DJ Smokey Smoke to the people- Yes... who know him best. 5:13 Cox Automotive's chief economist, uh, does a biweekly, uh, biweekly presentation on his findings and his kind of analysis of the data from, uh, the last two weeks. 5:23 And so, you know, this, this last one that just came out, like, a day or two ago, um, he kind of painted a picture that said, "You know, we're hearing a lot of talk about recession," and he, he kind of put it in a very kind of, you know, polite way. 5:35 He's like, "You know, I think that really is mostly coming from the people that benefit from headlines that scare people into reading their articles." So he said as far as his in- Yeah. Without a doubt... 5:45 as his indicators, right? He says that, you know, strong labor market, high credit availability, and high s- high savings accounts basically are s- signaling stability for auto dealers. 5:58 Like, signaling stability across retail automotive. Um, you know, there not being the new inventory situation that we're in, it's like that's stability.The fact that people's- Yep... 6:07 credit scores are still high, that's stability. And so, uh, he shrugged that off a little bit. He also, um, you know, here, I'll, I'll read a quote from this. 6:15 And he says, "My biggest worry from the dealer sentiment data is that the outlook is down lower than the current market," meaning that, um, you know, the consumer index, right, that shows consumer confidence, he said, actually, dealers' confidence is lower than the consumer index- Wow... 6:28 which is rare- That is rare... because dealers are naturally optimistic. 6:32 So, um, you know, he said the numbers are still positive and, you know, I guess as I- we would expect from him to be a little bit strong and steady in his approach. Yeah. 6:42 I would say cautiously optimistic is the, the approach that you should take to, to just economist news like this and the regular news that's out there, this cautiously optimistic. Because we are still seeing... 6:55 I mean, I was talking to a dealer yesterday that, that three months this year they've hit record new car months, right? Because they sold in the pipeline, the vehicles arrived, and they hit record new car months. 7:06 So there are dealers that are continuing to do that month in and month out, and, and so recognizing that that's gonna be a continued, uh, you know, just r- norm for us over the next 9, 12, 18 months. 7:21 But realizing that there is, you know, I think we talked about yester- or was it yesterday that, or two days ago, that the Fed is actually, uh, i- is making decisions based on, uh, the sentiment of the nation and just kind of the feeling around- The psychology of it, yeah... 7:37 where inflation and the psychology. 7:40 And so recognizing that those, those, like, uh, underlying psychological things that are happening in the news are contributing to potential for recession, and knowing that w- this is one of the longest periods in the nation's history without any level of recession. 7:55 Uh, so there's, there's, th- there's imminent recession at some point, whether it's 9 months, 12 months, 18, 24 months away, we don't know. 8:04 So being optimistic in the, in the short term and, and pu- pushing on, but being cautious with the way you're setting up expenses, the way you're, uh, pursuing marketing, and, and making sure that you're, uh, driving home the right channels allows you to be present when, you know, when the inventory is still strong, which is, uh, or when the, not the inventory, but when the economy is technically still strong, which is still right now. 8:27 Yeah, without a doubt. I mean, we've talked about this a few times this week, is that operational excellence, operational efficiency in your marketing and your fixed ops and your hiring- Yes... and your retention. 8:37 All of those things are things that you can control today. All of them. Yep. 100%. And, like, I love how you said, like, "Hey, recession's gonna happen," right? It's just a part of our economic system. We have- Yes... 8:48 we have recessions. We have. 8:49 You know, some of, some of us have been through them, some of us have not been through them, and, uh, I think, but in the automotive industry, most people have been through a couple actually- Right... at this point. 8:58 Yeah. So, you know, nothing new. Uh, speaking of inflation and recession. Stop. Segway. Time. [upbeat music] Stop. Oh, double, double press. It's- Double press... yeah, double press. Double. This is, this is my favorite. 9:11 I'm excited. This is a good segment. We're talking about hot dogs and Costco, right? I think we should- So-... benchmark crypto and benchmark the- [laughs]... 9:18 US dollar and the world index against the most stable coin that I've ever seen, and that's- Period... the Costco- Just like-... hot dog and soda combo You thought the dollar store was stable. 9:28 They ain't got nothing on Costco hot dogs and a soda. They haven't done any- Right... of that stuff that people usually do, right? 9:34 Like, Gatorade's like, "Hey, it's the same price," but they've strategically designed the plastic mold to reduce what, how much fluid is in the bottle [laughs] by, like, 30%. Right. Yeah. No. 9:44 The hot dog is the same length it's always been. So we're gonna start there. Um, C- so Costco, in their Q3 earnings call, gave special attention to the hot dog, which just makes me so happy. [laughs] Makes me so happy. 9:57 It's great. So, um, in the, in their Q3 earnings call, uh, Senior Vice President Bob Nelson, who was filling in for their vacationing CFO, I love how they put that in there. 10:05 Um, just, [laughs] you know, that's a, that's a little shot. "Well, that guy was on vacation, so we got this guy." That guy was like, "He was on vac- he was chilling on the beach-" So he was talk- "... 10:12 we were doing an earnings call." [laughs] I didn't, I didn't put his name in, in the article out of respect. 10:18 Um, so, so they went through their whole earnings call, talked a lot about price stability, and at the end, because there's all the, there's a rumor, a rumor mill started on the internet somewhere. 10:28 I don't know if you've heard, but rumor mills start on the internet sometime. 10:31 And he said, "Finally, I want to address some incorrect information floating around social media and a few other media outlets claiming that we've increased the price of our $1.50 hot dog and soda combination sold in our food courts." 10:44 [laughs] It was like, "All right, children, gather around. I need to talk about something serious." [laughs] It's like- Okay... the last thing. 10:49 Look, I know that you think the $1.50 hot dog is now $1.70, but when it reads $1.50, it's actually $1.50, right? [laughs] So good. So good. It's so good. You go, I- Right? 11:03 It's a massive brand play to come at it like that. And not just that, but, uh, look, I don't know about you. Uh, are you a, are you Sam's Club or Costco? Costco. Costco. Okay. 11:13 They, and, and Syracuse- So we're Sam's Club, so... the Sam's Club's all closed, by the way. We've only had Costco- Oh, really? We've only had Costco for, like, four years. 11:19 I mean, maybe that's why the Sam's Club's closed. I don't know. There you go. Yeah. So, I mean, we have, we have Sam's Club closer, but it's very similar. 11:26 It's like when, when you're going with your kids, there's this unique, like, when you get to the end of- [laughs]... going through this massive store- The frenzy of anticipation- That, it's just-... begins... 11:37 this frenzy of anticipation, like, "We're checking out, we're checking out. The pizza or the hot dog. We gotta get the pizza or the hot dog." It's only a dollar. Right? Yeah. 11:44 [laughs] It's only a buck, let's do it, right? And that's just, it's an exciting part of what it... Uh, so it's a big brand play. And then to just kinda, like, call their shot on it is, is just so smart from, from them. 11:56 To, like, you think about that. An earnings call, it's like, "Q3, Q2 is up, and we s- uh, you know, here's our EBITDA," and all- [laughs]... you know, all this type of stuff. And they're like, "But the $1.50 hot dog." 12:08 [laughs] You know? It's perfect. He goes on, he goes on to say, "Let me just say, the price when we introduced the hot dog soda combo in the mid-'80s," remember the mid-'80s? 12:18 Probably not, "Was $1.50"The price today is $1.50, and we have no plans to increase the price at this time. 12:26 This is like when you have the conversation and people say, save, like, the most serious part of the conversation for the end, right? [laughs] Now let's talk about something important. 12:35 Now, they did increase the price on a couple of items. They increased the price on their- Yeah... chicken bake, which I can't even remember seeing and I've never had, from 2.99 to 3.99. 12:44 So I'm sure the chicken bake people will be just fine if they were already splurging at 2.99. Right. And a fountain soda went from 59 cents to 69 cents. So- Oh, no. [laughs] I love it. I love it so much. 12:57 Still 30 cents cheaper than, still 30 cents cheaper than any gas station out there. Like, come on, y'all. I mean, there are whole research, studies that talk about the Costco hot dog. 13:06 I mean, they obviously use it as a loss leader, but they also use it, like you said, as a major brand play, right? This is- Yes... signaling to everyone, like, you're going to get more than you pay for at Costco, right? 13:18 And you can trust them, and it's stable, and it's the same size. So, like, of all things in the economy, as long as [laughs] we just, 13:26 John Roper just commented, "Remain cautiously optimistic as long as the Costco hot dog remains at $1.50." Yes. That is- You know what I wanna see? 13:35 I wanna see Steve Greenfield's mobility index indexed on the Costco hot dog. [laughs] We'll present that to him next time. I think we just have to do- There you go... 13:44 that for him and then just, you know, politely suggest that that's how he should run his business. Um- There you go. There you go. 13:49 All right, one, one more story today, and this one, this one, uh, might sting a little bit. You know, usually we leave the hot dog kinda stories for the end- [laughs]... 13:55 but it just went so good with the economic story, we had to put it second. So, um, if you've ever read the website Jalopnik, Kyle, um, I know you, you knew about it, I think, before I did. 14:04 Jalopnik is like, are you a Jalopnik person, like before, for years past? I, I've always just kinda stayed around it. 14:11 I, I, I appreciate, they, they, they have kind of a similar news, uh, bent to, to us, to what we kind of like bring, it always, you know, you kind of read the article and then they give, they give you their commentary at the end. 14:23 Yeah. And I've always appreciated that- Street talk... knowing that, like, it's an obvious opinion, like street talk piece. Yep. 14:29 Um, but just, I like, I like knowing that it, it's, they're just very clear, like, "This is what we think," right? Yeah. 14:36 They state the facts, "This is what we think," and, and you can, you can kinda compartmentalize that and with, when a not, a lot of news sources kinda like weave their thoughts into the news, right? Yeah. 14:45 And they're just like, boom, boom, here it is. Yeah. So yeah. So that's, that's what I like about Jalopnik. 14:50 So Jalopnik is, if you think about it, they're more of like a retail enthusiast angle, is their main trajectory, right? And then because- Right... 14:56 it's all around cars, right, they, they also have some commentary and some news on what dealers are doing, obviously, because it's about cars. Yep. 15:04 So, um, I don't know how many months, several months ago we reported on a website that got launched. Is M- is it markups.com or markups.org? Either one of those. I, I don't remember. 15:13 But basically somebody- But I'll find out... somebody built a site, thank you, somebody built a site that lists consumer-reported markups at dealerships all across the country. So go on the site, see if you're on there. 15:24 And this Jalopnik article kind of lists, and I think they do this once a month, it's like the top 20 dealer markups across the country. So you can go look at this article that we linked up in the show notes- Yep... 15:34 and see if your dealer's on there. So they're, they're basically reporting on markups.org-.org, right... is what they're doing. So markups.org. Yep. 15:39 And they just went ahead and curated, uh, in whatever, whoever the writer is, right, his top 20 markups across the country. And, uh, we'll tell you the, the punchline in a second. 15:48 So the, the, the, the number one, or number 20, counting down to one, was, uh, a $1,398 markup on a Hyundai Palisade, right? It's a modest markup. 15:57 All the way, you know, in the middle was about an $18,000 markup on a Ranger XLT, putting a Ranger at the same price basically as a full-size F-150. 16:05 And then finally, last but not least, was a 2,000, $200,000 market, markup on an EV Hummer, which doesn't surprise a lot of us in the industry. 16:13 Doesn't surprise anyone because even, like, secondary retailers are doing, like, 2, 250 on those things. So it doesn't matter where you're at in the market, you're paying a lot for an EV Hummer, period. 16:23 Without a, without it, 'cause they're only making 12 a day. [laughs] Yeah, exactly. Right? They're only making 12 a day. So, like, as we always do, we don't just take the story at the face value. 16:32 We dive into the comments, right? 'Cause the comments are where the real feelings- Oh... come out. And as you can imagine, the comments, uh, had a pretty broad variety. 16:40 We highly recommend that you go and, and read the comments. Now, look, when it comes to markup, big debate, big conversation in automotive. Without a doubt. Everyone is entitled to their own strategy, right? 16:49 Everyone's running their business in their own way. We hope that you go to read the comments to understand how your strategy may be affecting your market and your perception. So, um, you know- Yeah... 17:01 but in the comments, I think, is a treasure trove of just awareness to the consumer mindset. People saying like- Without a doubt... "What the heck is MSRP anyway?" 17:09 Um, some people saying like, "Hey, dealers can run a business." You know what's crazy? I've had more people ask me, like, from my auto perspective, "What is MSRP?" in the last, like, five, six months- Absolutely... 17:22 than ever. People that are outside of m- auto- because nobody's ever actually- People at your- What, what I'm realizing is nobody actually knew or, or paid attention to MSRP 'cause it wasn't even a thing. 17:32 It was meaningless. And now it's like everyone's like, "If you can get a car at MSRP, you win," and everybody's like, "What's MSRP?" Yeah. You know? 17:39 So this level of, uh, I mean, we're having to battle EV education and pricing education, and so your team should be very, very well aware and in tune with what's going on in the market. 17:50 Wherever you decide to place yourself on that plane of markups or no markups, your team has to be educated to be able to execute on your strategy. Yeah, without a doubt. Without a doubt. 18:01 In the comments, so one of the things we've been conversating quite a bit about in the industry is direct sales, right? OEM direct sales- Mm... 18:08 the dealership model, legislation, how it's all coming together in this day and age, and what does the consumer think about that really, 'cause we all have our ideas and perceptions. Read the comments. 18:19 There are people in there saying like, "Yeah, this is exactly the reason that dealers are gonna be eviscerated from the planet and direct sales are gonna win," and guess what's next? 18:26 [laughs] Someone commenting and saying, "Yeah, you know what? Actually, direct sales would be bad for us because then one person would have all the control, and then we would all get screwed." Oh. I was like, "Oh, okay. 18:38 Somebody's paying attention. Somebody's paying attention." And so, um, we wanted to bring this to your attention. Again, go read the comments. 18:45 Click on the link in the show notes and read the comments because, you know, they're gonna sting a little bit on one side. You're gonna see some rational thinking on the other side. 18:53 But it doesn't matter whether or not it's rational or not, the consumer thinks what the consumer thinks, and it's our job- Yep... to change that perception in a positive way. 19:02 So Paul, would you say consumer's gonna do what consumer's gonna do? I've heard somebody put it that way before. 19:08 [laughs] Consumer's gonna do what consumer's gonna do, and we gonna do what we gonna do, and what we gonna do is go into the All Things Used Car Room right after this. We hope you join us there on Clubhouse. Mm. 19:18 Have a great weekend, everybody. Get some car sales done tomorrow, will you? Just sell something. 19:23 [upbeat music]
