Sarasota entrepreneur Jesse Biter, who sold a $16 million auto sales software business last year, didn't sit on the sidelines for long.
Indeed, Biter is back — in a big way. Biter and local auto dealership executive Matt Buchanan, son of U.S. Rep. Vern Buchanan, R-Longboat Key, launched a new business, Dealers United. The plan is to build a nationwide network of dealers that will have combined buying power with vendors.
Biter and Buchanan, the operations manager of the Sarasota Ford dealership, say they will spend at least $1 million in startup costs on the business. They've already hired five employees, who work out of a downtown Sarasota office. Biter would like to hire at least five more in the near future, for a Dealers United call center.
The ultimate goal of the business, say Biter and Buchanan, is to compete with large auto dealerships and groups that already have leverage with vendors and partners. “We are going to work for the dealers,” Buchanan tells Coffee Talk. “We'll be more powerful than any one group.”
The Dealers United system has a Groupon element to it. The firm will find a service common to many dealers, from search-engine optimization to customer management software. Dealers United will send out a video every month to its members that details the options, both in vendors and the specifics of the service.
Network members decide independently if they want to buy into the deal. If enough members sign on, the deal tips and is open to all members.
There are no fees for dealers to join the network. The firm makes money off a percentage of the business it brings to vendors.
Biter hopes Dealers United will give smaller players in the industry an advantage with behemoths like AutoNation and Group 1 Automotive. He says a network like this could have helped him out when he launched his business, HomeNet, in the mid-1990s. “Dealers United will change the way independent auto dealers compete with the large public groups,” says Biter, a runner-up for the Business Review's 2010 Entrepreneur of the Year Award. “We aim to save the industry.”
The $1 million Biter and Buchanan plan to spend on startup costs will go toward a marketing blitz to recruit dealers to the network. That includes email, direct mail, phone calls and ads in trade publications. The firm also plans to launch a big debut at an industry trade show in Las Vegas early next year.
“We know the more money we put in up front,” says Biter, “the more we can save for the dealers.”