The Dealer Playbook
The Dealer Playbook

Episode 497 ยท 3 weeks ago

Kevin Frye: Selling Cars With Crypto Currency

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Kevin Frye is the Head Marketing Coach at Jeff Wyler Automotive Family, an industry veteran, and subject matter expert when it comes to innovating within the retail automobile industry. In this episode of the show, Kevin walks through the process that led one of their stores to the first cryptocurrency transaction. Today, all stores in the organization accept crypto as a form of payment for a vehicle.

What we discuss in this episode:

1:11 - Can any dealership start accepting crypto as a form of payment or is there a longer-term process that leads up to it?

1:47 - Kevin explains that there are two key elements to innovating within the car industry, and one of the aspects has to do with never being satisfied. Always looking to push the envelope and try something new. The second aspect has to do with taking the word "no" out of innovation โ€” a common approach taken by many dealerships. Most won't be bothered by the aggregation caused by trying to do something new, so they just resort to saying "no" to it. Kevin explains that his team takes the opposite approach. They welcome the friction if they can see it map to innovation.

3:21 - Kevin explains how they received the inspiration to investigate transacting with crypto, as well as address some of the common fears that might be associated with accepting crypto from a dealer's perspective.

7:28 - Kevin shares an analogy about how the crypto exchange works and how they view it as a dealer group.

10:31 - By accepting crypto, the dealership can streamline the time of the transaction by removing barriers to the money transfer. The customer can utilize their assets to pay for the vehicle however they choose.

Listen to the full episode for even more insights about utilizing crypto to transact car purchases.

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Thanks, Kevin Frye

If you enjoyed this conversation with Kevin Frye, please let them know by clicking on the links below and sending him a message.

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Get Your Google vehicle adds up and running fast with flex dealercom. The car business is rapidly changing and modern car dealers are meeting the demand. I'm Michael Cirillo and together we're going to explore what it takes to create a thriving dealership and life in the retail automotive industry. Join me each week for inspiring conversations with subject matter experts that are designed to help you grow. This is the dealer playbook, all right, gang, unless you've been living under a rock, you should know by now that the world's evolving. Things are changing, new currencies, web three, the metaverse and FT's. There are so many new and emerging technologies and things that are happening that are shaping the way that consumers moved to a purchase, and I mean it's so important for us to pay attention to those things. And no better individual to join us than the what do we say now, the head coach of marketing at Jeff why? They're automotive family. Yes, so excited to have you, Kevin Fry. Welcome back to the dealer playbook podcast. It is great to join you as well, Michall my excited to talk a little bit about our work and use of with cryptocurrency has of late and of course, the other hot topics you might throw at yeah, I'm excited. Are you going to be talking about this at digital dealer? You know, it's funny you ask that, because I wasn't originally, but I am going to include our first cryptocurrency transaction within that just because I've had so many phone calls, emails that touch with people with questions about how we're doing it. Is it something that you could just get into? I mean, when I look at the work you've done over the years, I've heard you speak maybe a dozen times. It's always so it resonates so deeply. It's tactical where it needs to be, tactical, it's foundational where it needs to be. But it's clear as I listen to you speak over the years, you're not someone that just goes, oh, we need to do that, but we don't have this yet, but let's just not wants to sweep that under the rug. No, you're focused on operation and making sure that you're set up to succeed. Is that a fair assessment? It is, and you know the secret innovation. There's really a couple aspects of it. Number One, you're never satisfied with what you currently have, so you always question everything you're doing. Can we do it better? And then the other aspects, and I'm literally looking at a sign outside my window to marketing space, is that we take the word no out of the word innovate, because it's so easy to have an idea its way out there. Just say no. I don't think we can do there's too much aggravation. We take the opposite approach and that enables us to lead with innovations, for example with crypto currency. Wow, so let's talk about this. I mean, of course that's that's likely why everyone's listening. They don't want to talk. They don't want to hear US talk about the years and years of work you've put in and how that's prepared you for a crypto transaction. You were saying earlier that it's that it's probably easier than a lot of people think. I want to just reference. Let me just pull up here on your linkedin. By the way, DPB gang, if you're not following Kevin on Linkedin, you definitely need to do that. Will Link to his profile on the show notes. You said something here about how yeah, here we go. This is about a week ago. You say we have already accepted cryptocurrency for several car transactions, always looking to lead and be more consumer basic. So here I am being like, Oh, good job, they did a crypto transaction and you're saying now we've actually done a few of them. What does it look like? How do you even set something like that up?...

Well, let me start with the the birth of the idea, and it actually came from my dealer principles kids and they said something to him about why don't we accept cryptocurrency at the Jeff while are automotive family, and he passed that on me. That what I'd like to do is start out with, Michael, is someb the fears and concerns that I know dealers have everywhere, to include being on this podcast today. Not Number one the volatility and a risk factor. So if you play with crypto currency you can see tremendous ups and downs and the value on a daily basis. So as a dealer, one of the big concerns is that, hey, if I accept the crypto currency, let's say, for Arguments Sake, it's twenty fivezero dollars, that I accepted and three days later when I go to finalize the deal, now it's only worth twenty grand, that I just lose. Lose Fivezeros right or they could trend and go the opposite way. And then, on the other respect, just the way we work, if I have a floating number because of volatility, before I finalize that deal, how do I pay a sales commission? The Sales Commission is on a firm selling prize, a firm cost, etc. So we started doing our due diligence last year in August to address these issues and when I lay out how we're doing it, I think we're not only going to leave the concerns that dealers have, you're going to be surprised at how simple we're doing. It's funny you bring all of that up, because you're right. My first thought was, what are the tax implications? Yes, that's a common question and I got to share you and it. Please take me right everybody in podcast land. I always whenever you innovate, you get about half of the deal or audiences like hey, great job, and the other half is like calling you a clown, a full everything in the book. How can you do something? And I'm just used to it at this point, but it also makes it kind of fun to walk you through how we approached it and solved the problem. I can talk about some of the taxation issues, but I'm going to tell you now a lot of this is still great area with crypto currency, in accounting and how it's being taxed, not only how to state with throughout the world. Okay, this is I love everything about this. I mean, I don't know if it's because I'm the biggest geek there is or whatever, but I love this and you're right. I mean human nature, I think, is that we tend to fear what we can't understand. And so then, of course, I mean look at look at Elon Musk's haters right now. Why would this guy buy nine percent of a company that's not really that? And then all of a sudden you're like, he's working a bigger plan. He's he's working a bigger plan, and so I get that side of things, but I'm really interested now, speaking directly to those who are curious about this. Well, what did the process look like? You said you said August is when you started thinking about this of last year. August we started doing the dude diligence to work how we could do this and accept it, and we actually got everything in place of February of this year, but we hadn't started marking it until late March and then had our first transaction and April, and then we've been approached several times since the press release because the word is now getting out. There's some excitement about the press release. Actually exploded worldwide, especially with the cryptocurrency sites and specifically our first transaction was with atherium, which is one of the cryptocurrencies. That audience really took off with it as well. But if you'd like, I could walk you through the mechanics of...

...how it's set up and how we're doing it. I think that's going to answer, not exent, the questions. Yeah, let's do it. I'm ready to dig in. So let me draw the first analogy, because I like to use some simple analogies. Let's say I fly to France and when I get off the plane I need to get some French currency. So typically at the airport you're going to see a currency exchange service, which is essentially business. Fourth, the will take my US dollars and exchange those into French francs. At that point. That is the type of situation that we have set up. We were working with a third party exchange service that actually handles the transactions so that we never formally take possession of the crypto currency. All right, so that's going to surprise a lot of people, but let me walk you through how that works, and that's going to make a lot of sense. A consumer walks into our dealership and they indicate that I would like to buy the car using cryptocurrency or pay part of the transaction amount with cryptocurrency. We will ask them what is the amount of cryptocurrency you want to apply and let's say, for arguments sake, it's FIFTEENZERO dollars. What we will do is, with this exchange service, we're going to generate an invoice for that fifteenzero dollars. We will email that to our customer. When they get that, they can select up to twelve different cryptocurrencies and they can either a do fifteenzero all from one cryptocurrency. Maybe they want to do a mix of, say Tenzero, a bitcoin and five thousand of Etherium, and then on that amount there is a one percent processing fees. To think similar to a credit card transaction. m. In our case we put that processing fee builds into the voice so that is bared by the customer that cost. Once that is complete, we get the money in US dollars transfer directorily via ach to our bank account within twenty four to forty eight hours. So we have no risk. We are going to get in US dollars the exact amount that we transact to you. Now, mind you, the person in the middle of the exchange service. If that cryptocurrency goes up and value, they bear the benefit. If it goes down and value, they take the loss, but of course they have the processing fee to offset that. So like what I would suggest to you, and another analogy is it's just another form of payment. It's like using a credit card. I might have an American Express, I might have a visa, I have crypto currency, but at the end of the day I'm getting US dollars. Yeah, makes total sense. And also with a one percent processing for it's a heck of a lot cheaper than processing an AMEX. We you know the I got to tell you in our first transaction, and this when you innovate, you start finding these stories along the way. We had a gentleman that was interested in an s five eighty in our Mercedes Benz point and we came to terms on the deal, at which point he informs us he's in Saudi Arabia and wants to do an international wire transfer. That means at least a oneweek delay, right and right now, with inventory situations and dealers, nobody wants to put a hold on a car in for a week. However, by using CRYPTO currency, we're essentially snap getting to prove just like that, getting that money in there. So becomes incredibly simple for him as the customer. It's also consumer facing because he...

...can utilize his assets, his crypto currency, to pay for the vehicle and it's a win win for both sides. And and you know what I love about this is it bypasses because it's decentralized and and whatnot. You essentially become your own bank, I mean, or at least could have the potential to be, in that this didn't have to pass through, I mean other than the company that's helping you facilitate it. In a lot of daytoday scenarios, there's no intermediary is this is going from them their wallet, to my wallet. Well, we do have an intermediary with the exchange service for us. But I'm going to put this out to you, Michael, because that this something feedback I'm getting. And so this is the approach we're taking, which is fairly conservative. There are people out there, businesses, and you're going to see this prevalent in Europe for the past year, where the business directly wants to take the CRYPTO currency in exchange for the product or service they're selling, because they're going to put it on their balance sheet. Now I'm going to tell you what, by Golly, when you want to get to the accounting of putting that on your balance sheet, it's going to get tricky with their looking at it as an investment opportunity and ability to mind essentially, and collect crypto currently into their portfolio. Right, am I recommending that? Two dealers out there? I can't see a public doing it. Maybe some smaller privates might want to do it, but for us we're just going to act with an exchange service in the middle. So we're dealing with US dollars. Yeah, and that makes perfect sense and, like you said, it mitigates a lot of the risk. There's you know, I'm I'm just facilitating a new, faster way to exchange currency and then getting it out in the currency that I need to go buy bread, you know. So that makes perfect sense. Now, why in the world is somebody in Saudi Arabia reach out like was this just as such a rare Mercedes that they were like, I can't get it here, or what is that? Or are they from here? Like this question, because it's funny. It's a lot more of our luxury buyers expressed entrants interest and leveraging their cryptocurrency. They've been early adopters, they've done well and they're looking for opportunities to utilize it. Yeah, it on a luxury vehicle, but sucific car, specific color. We already south throughout the United States with our too. Mercedes beins points overseas not as much, but in this case I couldn't tell you exactly what he saw in that vehicle, but I know that he wanted it. We are willing to sell it and deliver. It's funny. I'm reading through the comments and you're right. As you explain it, I go this seems pretty cut and dry, but also opens up a whole new avenue where it kind of answers the question that a lot of us have had. Is Crypto a fad? Is it going to go anywhere? Is it not going to go anywhere? Well, now all of a sudden you're you're explaining a very practical use for crypto. Not Know, Yam, I'm not just buying dogecoin because you lan said or whatever. No, there's a legitimate group of investors out there who have crypto in their bank account and I've just given them a faster, more convenient way to transact. But it almost sounds too good to be true. So in that, call it six month due diligence process, what were some of the infrastructure things aside from the the the the exchange company, was there anything else that internally, you guys needed to think about an implement a process around? Our biggest struggle in the beginning was we are looking actually taking possession of the crypto currency. Once we got past not doing that, it became much simpler.

But I will allude to some of the tax questions, and please let me preface this. I'm not a not an account I'm not a tax attorney and we're going to cover some sensitive areas. But some of the questions I've got about will how do you handle the taxation on the consumer for the CRYPTO currency from the standpoint all throughout some random numbers? Let's say I bought Bitcoin for a thousand dollars per coin. Now it's worth forty grand a coin. How do we tax that? Well, my answer is we have nothing to do with that. If you utilize money from your savings account and you had an interest rate, you made some money on that, you're going to pay that to the IRS independent of us as a dealer. All we know is that you purchased cash transaction from us, this vehicle using some crypto currency and the sales tax and respective taxes based upon wherever you're selling will apply to the full transaction as normal in terms of reporting a over tenzero in cash. This is electronic, so it's not actually a physical cash transaction, which is obviously those rules are based around people trying to launder right physical currency. So that does and apply. But don't you can't under you can't wander crypto because it's all on the watching. It's electronic and and you know, we could go ahold side conversation on blockchain with the security of that is unbelievable. Really. Is that part of the beauty of cryptocurrency. But the on the taxation of gains made with crypto currency, this is a hot, hot topic because of course every government in the world wants to get their hand in the Kitty. How do I tax this person on this currency that they don't even control? And you could do a whole complete different show on that. All I will suggest is that this year will falling. Filing my tax is electronically. Was the first time I saw the question. Hey, did you want to report any gains and come on crypto currency, and it seems like the irs has going by a you know you. Do you feel guilty or really honest to report that? I couldn't tell you. Hey, do you want to report? That? Was the answer to that is simple. No, I don't want to report. Similar to if you bought anything online and you didn't pay sales tax, which is a voluntary submission in your Rus. I believe, and I'm sure there's some much better experts on this podcast listening in, that that is a really great area that governments want to control, but I don't really necessarily think they have control of that. Yeah, and and how can you? I mean, I guess this is why government's right now, are scrambling to create government sanctioned cryptos. Absolutely right. Like, I'm gonna like, I'm gonna buy that. You like, I'm going to invest in that. Oh, Oh, government sanctioned. Okay, you got me. I'm just gonna sell all my theory, all my Bitcoin, my xarp. But but you do. You know, you're right. It can be perceived as a gray area. But I look at the specifics of that question. Do you, because I've seen that question to do you want to report? Well, you're asking if I want to do something. The answer is no. I've answered honestly. If you're asking me if I have any to report, that's a different question. You know that's a different question. Okay, yeah, I do have some. I do have some, but if you're asking if I want to report it, no, I don't. I've well, I've got some news for you. If you are speculating, you're investing in a crypto currency and request a hund and ninety nine, it doesn't exist. They don't generate that paper work interest. That's part more that gray area.

But yet the telling statement. If you get online, there's a great video on with CBS News. I A seven minute video, kind of like a crypto currency for dummies. In the common theme amongst all the experts is that don't invest any more than you're willing to lose. So it is still a highly speculative instrument, but in the same respect, a lot of our younger people, the millennials, like it because they're young, they've got time, they're willing to do some high risk and expectations of some high returns in the future. Yeah, makes perfect sense. Does Jeff Weiler automotive have any plans to get into the NFT game? I am not aware at this time if they are it. I that was one of those things that I'm like, so, let me get this straight. I'm buying an original piece of digital art so that I can say I well like what I do with it. That was where my original thoughts went, and now I'm realizing, Oh, this is actually just a creative way that people are crowdsourcing or crowdfunding, you know, buying shares into some sort of digital, you know, ecosystem where money will be generated. So I think that's really interesting. Can you give us a sneak peak on what you're talking about? A digital dealer? I know it's get you. You've mentioned it's going to include a little bit of this, but can you, can you wet our whistle just a little bit? Yeah, I'm going to have some fun at this digital dealer and and I'm stealing this for my kids or get a little bit older now, but it's basically sipping some tea and I'm going to talk about some of the hot topics of the day. I guarantee I'm going to press some buttons, but listen it even as I bring these topics up now is probably going to be some people start sweating and get up stet. But some of the questions I'm going to dresses. Do we still really need seo or are there better solutions? Do we need sem or they're different alternatives that can accomplish more than scum? Should we be using forms on websites or one a hundred percent chat? I'm to talk a little bit about crypto currency and I'm also going to be talking about the future of our current market, which I'm going to tell you right now I'm not bullish. We have the Fed meat and again tomorrow probably going to raise rates by half a point. So just a lot of hot topics that I know we're going to fire some people up at Michael. At the end of the day, I'm a fellow dealer. I'm on the front lines ideal with this seven, and I believe, with that in mind, my input usually as a lot of credibility with the fellow dealers in a room coo, are struggling just like myself, would gift cult decisions. Well, I mean, like I said, I've always, always enjoyed listening to you speak, and you're right. You you have a very keen way of calling it how it is, based on how it is, and it does come with the credibility of of you know, by virtue of the seat that you're sitting in, not an a six intruder, but I I got to draw attention to it. You said a six intruder earlier and I love that airplane. Is that what you flay? Yeah, that you know what? I was an aerospace engineer and in college and from the airspace side, there are some airframes you can only design so far. You've really done well and the a six was one of those, a fantastic area frame. The reality is with the modern military they have dual purpose aircraft, fighter attack to a lot more and expensive and whatnot. But you know, it's funny. I think everything I flu in in a museum. Now it's they're placing it on the on the stand outside the museum. That's always nice. I had on display. I we were talking pre show about my love of airplanes and how I it's on my bucket list. I need to be get my pilot's license. But I'm mean from your experience in the service. I know a couple of...

...other you know friends and colleagues who have flown airplanes. Is can you map everything you do today back to flying an airplane, like they can? Well, I'm not sure exactly what you mean. They're well, what I mean is operationally, you know, like there's always an air plate flying an airplane. Analogy are able to are you able to find analogies to bit from business to flying airplanes? I would probably give it more to just the leadership skills taught to you as an any more office or and you know it's always about adapt and overcome. Adapt and overcome. It leads to a lot of the innovation stuff I do. Don't take no for an answer. How do you accomplish what you're trying to do? You know, I would say in the aviation side. The thing that blows me away is so when I was a young guy, I was flying in Desert Storm. The multitasking is absolutely insane. I'd be listening to seven different radio frequencies, will trying to fly a plane to keep it out of water, trying to navigate to know where the heck I'm match, trying to develop a weapon solutions, will try not to get shot down. In you're doing five hundred things and it was difficult to build up to that level. Today, and I mean this and dead serious, kids playing these video games and they've got the headsets on and they got their smartphone to this side. It's like are a natural for this multitasking and it's exciting to see this new wave of talent commanded the military flying aircraft. I think they're much better prepared than we were back then. Wow, best tremendous and my crazy brain can't help but say I'm listening to everything you just said and my victory is like I got to inbox zero. It's like a big perspective thing and I have so enjoyed this conversation. Thank you so so much for joining me on the dealer playbook. How can those listening get in touch with you? Well, there's more than welcome to connect with me on facebook or Linkin. They can email me directly. A Kevin Not, Fried Frye and Jeff wildercom our course. All has come up and say hello. A digital dealer DMS. See any of the shows come out. I'm Michael Sirillo and you've been listening to the dealer playbook podcast. If you haven't yet, please click the subscribe button wherever you're listening right now, leave a rating or review and share it with a colleague. Thanks for listening.

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