Building a Buy Center: A Simple Guide for Dealerships with Tom Gregg

Setting up a car buy center can be a significant move for any dealership. Tom Gregg, an expert in the field, shares his insights on the key elements of building a successful buy center.

"Somebody who is working private sellers is often a different skill set than somebody that's buying from the auction. If a dealer is really looking to set up a buy center, it has a different human capital cost than somebody that's looking to buy three to five cars from the public."  

Tom Gregg, CEO 

What is a Car Buy Center?

A buy center is a specialized part of a dealership that's focused purely on acquiring pre-owned vehicles. This can be done through buying cars from private sellers or at auctions. The main objective is to maintain a steady flow of high-quality used cars that can be resold profitably. "It's crucial because it ensures you have a consistent inventory of vehicles to offer your customers, which can significantly boost your dealership's sales and profitability," says Tom.

How to Build and Launch a Buy Center, Step by Step

Most dealers do not stall on the idea of a buy center, or buying center as some call it. They stall on the rollout. Here is the order that works when you launch a buy center, from the first decision to a buyer who is making offers.

1. Set a target you can measure. Decide how many cars a month you need from the private channel and the cost-to-market you will accept. Without a number, you cannot tell if the center is working.
2. Pick where you will source. Cast a wide net across the major consumer listing sites so the same seller shows up in more than one place.
3. Define the two core roles. One person makes offers, one person schedules appointments and inspections. In a small store that is the same person. As you scale it becomes a team, and the traits that predict a strong buyer matter more than a car-business resume.
4. Give them a process, not just a phone. Word tracks, an offer template, and a follow-up cadence keep the work repeatable. That repeatable acquisition process is what keeps the pipeline running after a buyer quits.
5. Put the right tools in front of them. A buyer should spend the day talking to sellers, not chasing spreadsheets. The platform that runs sourcing, follow-up, and appraisals keeps it all in one place.
6. Track activity before results. Calls, offers, and appointments tell you the pipeline is healthy weeks before the cars arrive. For a week-by-week picture, see what the first 60 days actually look like.

Understanding the Human Capital Costs

When it comes to the human capital costs involved in setting up a buy center, Tom explains that these costs refer to the skill sets and staffing needs required to run a buy center effectively. Different skills are needed depending on whether you're dealing with private sellers or auctions. For example, working with private sellers requires skilled negotiators who can build trust and rapport. At auctions, you need staff who can make quick, informed decisions and recognize good value.

Staffing Requirements for a Buy Center

The size and scale of the buy center will dictate the number of staff needed. For smaller operations, you might start with a few dedicated staff members. For larger, full-scale buy centers, you may require a whole team. "The key is to ensure that you have the right mix of skills to handle all aspects of the buying process. Effective staffing means training your team to manage different buying scenarios efficiently," Tom notes.

Build the Buyer In-House, or Outsource the Role?

The hardest part of a buy center is the person in the seat, which is the same human capital cost Tom describes above. You have three ways to cover it.

Hiring in-house gives you full control if you have the bandwidth to recruit, train, and absorb the turnover that sinks most acquisition teams. If you would rather not carry that risk, you can outsource the buyer role and have a trained buyer work your seller leads, backed by a dedicated Acquisition Coach. Buying only at the auction is the third option, and usually the most expensive once fees and transport are counted.

Strategies for Buy Center Success 

To make a buy center successful, effective staffing is foundational. Having the right people in the right roles and providing them with the necessary training is crucial. Efficiency is also key. Streamlining processes to save time and reduce costs is essential. This means leveraging technology for inventory tracking, lead management, and communications. Tom emphasizes the importance of having a clear strategy. Setting specific goals for the number of cars to acquire and establishing metrics for evaluating the buy center's performance is vital.

Final Thoughts from Tom Gregg

"A well-planned buy center can serve as a cornerstone for your dealership's success," Tom says. By understanding and managing the human capital costs and ensuring you have an effective team in place, you can create a buy center that not only meets but exceeds your dealership's needs. It's about setting a solid foundation and building upon it with strategic actions and efficient operations.

Building a buy center is no small feat, but with Tom Gregg's insights, your dealership can navigate this complex process with confidence and clarity.

Buy Center FAQ

How much does it cost to start a buy center?

Your biggest line item is the buyer. A dedicated in-house buyer costs a full salary plus the time and money to recruit and train. Outsourcing the role runs roughly the cost of one hire without the benefits, ramp, or turnover risk. Beyond people, you need a sourcing and tracking tool and a small amount of dedicated space.

How many people do I need to run a buy center?

A small store can start with one dedicated buyer. As volume grows, you add appointment-setting and management so your best buyers stay on the phone making offers instead of handling logistics.

Should I hire a buyer or outsource the role?

Hire in-house if you have the bandwidth to recruit, train, and cover turnover and you want the seat fully under your roof. Outsource if you want a trained buyer producing quickly without taking on the hiring risk yourself. Many stores start outsourced to prove the channel, then build in-house once the volume justifies it.

Is buying from private sellers cheaper than the auction?

Usually, yes. In our experience working with dealers, buying directly from a private seller tends to land a lower cost basis than the same car at auction, often several hundred to over a thousand dollars per unit once you account for auction fees and transport, and that saving goes straight to gross.

How long does it take to launch a buy center?

Most buy centers take a few weeks to start producing. The first two weeks are for loading the pipeline, not buying cars, and acquisitions build from there month over month as the buyer works through follow-up.

Ready to build your buy center? Contact us today for expert guidance and start boosting your dealership's profitability.