Even though we were the number one volume retailer in the state, we were still not achieving the profitability levels we felt we should. It doesn’t do you any good to be number one if you are not generating the desired profit margins!
For years we had been struggling to retain the profit generated in the sale of the homes. Jerry adamantly believed because we were a “multi-lot retailer” there were overhead costs that could not be controlled. He used to say, “I can control the rent I pay for the lots, the flooring I pay for the homes and the open lot insurance I pay and that’s it.” He went on to say, “Costs such as trade-in allowances, utility bills, attorney fees, state complaints, and employee expenses are variables that cannot be held in check regardless of what we do.” He told me for this reason a “chain” or “multi-lot retailer” would struggle to ever be profitable. He said, “Some how we must create a program where the lot manager has a vested interest in seeing that all of the issues we deal with regarding uncontrollable overhead costs are eliminated.”
In December of 1988, with the company finishing up with another record-breaking year in sales, Jerry introduced his concept, which became the program we have been operating under for the past 15+ years.
Jerry’s idea was unlike anything this industry had ever seen! The concept was to take the Lot Managers we had at the time and have them acquire the required licenses to become the Dealer on the sales center. Jerry said, “Having the Manager become the Dealer takes the “middleman” out of the mix and thereby will generate profits that can be retained.” The middleman was taken out because the Manager became the Dealer and with the new title came responsibility and accountability. But, with this added responsibility for the Manager turned Dealer came the incredible opportunity to achieve financial heights of success previously only dreamed of!
Jerry said, “We will pay the rent, flooring and open lot insurance. The Dealer will pay the liability insurance, the utility bills and any other overhead required. The Dealer will receive 100% of the profit generated on a sale above the invoice! Additionally, they will receive all the revenue brought in from the sale of tires, axles, insurance, rate participation, and any other source. The Manager turned Dealer will get rich and that’s OK because I didn’t get to keep it (the profit) any way! I would rather the Dealer keep the profit than all the other people (middlemen) who get the money now! We (the Dealer and us) do all the work and take all the risk. We are the one’s who should be getting rich! With this program that is exactly what will happen!”
Jerry went on to say, “The Manager who becomes a Dealer under this program will make 4 to 5 times more money than they ever have in their lives because the so called “Buck” now stops with them! They will not overbook their trade-ins. They will not have state complaints or attorney fees. They will not have exorbitant utility bills. They will not have unnecessary employees on their pay roll. They will watch every dollar that flows through the business and they will keep all those dollars!”
I remember asking Jerry, “If the Dealer gets all of the profit and we pay all the bills, how in the world will we make any money?” Jerry said, “We will make our income on the volume incentives offered by the manufacturers. Because all of the uncontrollable overhead costs will go away, we do not need to make as much money to pay the bills. So, we will let the Dealer have that money and because they are the Dealer, they will get to keep all of the money we have been unable to keep.
In January of 1989 (over 15 years ago) we held a meeting and introduced the program to all of our Lot Managers. A Lot Manager raised his hand and said, “Did you say that you are going to let us become a Dealer on your lot, give us 100% of the profit and you pay the big bills?” Jerry said, “That’s correct.” The Manager then asked, “How much do we pay you for this?” I thought, “That was a good question to ask! Yeah, if you are going to give these people the unbelievable opportunity to make money, surely there is some up front charge, right?” Jerry said, “Nothing!” The Manager then said, “Where do I sign?” The Lot Manager understood the opportunity that was being offered to him!
The rest, I guess you could say is history! Today we have over 120 locations across the country. The concept that Jerry McMillen turned into a reality does work!
Through the years many Dealers have realized financial success by operating under this program. I have spoken with various Dealers who in a year have made as much as $500K, $600K, $750K, $900K and even a million dollars! We had a guy make over $2,000,000.00 in one year on the program! If a person will take hold of this opportunity and put forth every effort required to succeed, they will reap the benefits of a very profitable and successful venture.
We have assembled a tremendous staff over the past twenty years, specializing in every facet of assisting the Dealer in the sale of manufactured homes. Our staff consists of eighteen people with a combined total of over 240 years of manufactured housing experience! We have developed a tried and proven system to facilitate the Dealers operating under the program to prosper.
We believe without question that the ADI program is the greatest opportunity for an individual to achieve financial freedom in the manufactured home industry today!
