Byline: Tom Ramstack
Jack Fitzgerald's greatest regret in life is that he never earned a college degree after graduating from high school.
Instead, he started working as a car salesman when he was 20 years old, got married, had two children and became tied down with family and job responsibilities.
"I was a wise guy," Mr. Fitzgerald says. "I thought I knew more than the educators when I was young. That just shows how dumb I was. I wanted to get going in business and run the world."
Now 65 years old, he still hasn't completed a four-year college degree. He also still sells cars.
Now, however, he owns 10 auto dealerships in three states, which earned revenue of $421 million last year and a profit of $7.1 million. He recently was named 2001 Auto E-tailer of the Year by the American International Automobile Dealers Association.
An e-tailer is like a retailer, but with the difference that e-tailers do electronic commerce. In other words, they sell products over the Internet.
From his office at his Bethesda dealership next to White Flint Mall, Mr. Fitzgerald, chief executive officer of Fitzgerald Auto Malls, explains how he has fit Internet sales into his formula for a successful business.
He sums up his business philosophy saying, "Tell the truth. Treat everybody like you want to be treated. Treat everybody like one of God's children."
His business philosophy also drove him to become the only major Washington area automobile dealer who advertises the "full delivered price" for new vehicles.
As he looks over a flow chart his advertising personnel are putting together for their showroom that compares different dealers' prices, he explains this automobile dealers' term of art.
The full-delivered price includes costs such as freight charges, administrative processing fees and any special rebates available. Other dealers advertise prices for cars before the add-ons, which can jack up the price as much as $2,000 for an average new car.
READ THE FINE PRINT
When the advertisements are published in newspapers, other dealers appear to have lower prices until you read the fine print, Mr. Fitzgerald says.
"I'm not going to do that," he says. "I don't think it's right."
Posted pricing sales also fit well with Internet marketing, which account for at least 10 percent of Fitzgerald Auto Malls' sales. Customers can click on the car model they want, immediately know how much they must pay without needing to include add-on fees and without bartering for a lower price.
The Internet has freed the dealership from the need to keep a huge inventory of cars at their lots and lowered advertising costs.
One local dealer advertises that he keeps an inventory of $125 million of automobiles on his lots for customers to see before they buy. Mr. Fitzgerald calls that foolishness. A large inventory drives up prices because the dealers must pay for insurance, interest on the debt, storage space and cleaning of the vehicles, all of which gets passed on to customers.
Instead, Mr. Fitzgerald keeps a more modest $50 million of inventory on his lots.
"Cars cost a lot of money," he says. "It doesn't take that many cars to add up to a million dollars."
When customers order a car, he relies on "just-in-time" delivery to reduce overhead expenses and keep prices lower for customers. …