THE COLUMBUS DISPATCH
January 11, 2009
More than a deal
In a year when the auto industry stood near death's door, a Northeast Side used-car lot nearly doubled its sales.
Miracle Motor Mart, 2380 Morse Rd., has done this despite a blink-and-you-miss-it location and offices that would be at home in a trailer park.
The modest setting is part of co-owner Mike D'Andrea's design.
This former Ohio State University linebacker who played for Woody Hayes has built his business on high volume and low overhead. He also built it on his religious faith, an aspect that he was reluctant to discuss, even though a cross is the most prominent element of the Miracle Motor sign.
"We don't preach to customers," he said in one of the two office trailers that sit on the lot. "We want to live it."
His family is an essential part of the business. Two of his brothers work there, along with two of his daughters. His Buckeyes extended family is represented, too. Luther Henson, who played defensive lineman for OSU and the New England Patriots, is a soft-spoken salesman.
On a recent Monday morning, the phones were ringing and three customers had found their way to the 1-acre lot. The buzz of activity was on a day that is typically one of the slowest of the week and in a month that is typically one of the slowest of the year.
Miracle Motor's performance has been in dramatic contrast with its competition. The company sold 1,185 vehicles in 2008, up 83 percent from the year before, according to registration data compiled by Autoview Online. That was by far the best percentage increase for any car dealer in central Ohio with sales of at least 1,000 vehicles.
As a whole, central Ohio dealers saw their sales drop 10 percent last year, including new and used cars. The drop was 8 percent for used cars.
The increase at Miracle Motor is tied to the company's decision to expand its inventory of vehicles to $3 million at a time, up from about $1.8 million before. With the added selection, the business needed more salespeople and more storage space. The sales staff expanded from four to seven, and the company rented a lot a few blocks away to store excess inventory.
Many of the ideas behind the expansion came from a new partner, Mark Meadows, who bought a 50 percent stake from D'Andrea early last year. In hindsight, it was a risky time for any small business to make a major investment, right as a major economic downturn set in.
But this business was equipped to survive. The average sale price of about $11,000 meant that its products were affordable at a time when car customers were turning away from new-car dealers and looking for savings. Tight credit markets, a curse for most dealers, helped heighten customers' interest in lower-priced options.
Meadows also brought several decades of experience as a manager for central Ohio auto dealers. Among his previous jobs was a stint at Ricart Automotive, the largest Ford dealer in the region. Underscoring the small world of the local car business, Meadows' sister is married to Ricart's co-owner, Fred Ricart.
The car lot has the same unassuming look as before. The differences are behind the scenes, such as a focus on developing sales leads through the Internet and a pricing strategy that accepts lower profit in exchange for the increase in sales volume generated by low prices.
Although many of the specifics at Miracle Motor are unique, the company's business model is similar to what has helped many used-car dealerships succeed in an otherwise troubled industry, said Philip Reed, senior consumer advice editor for Edmunds.com.
"Independent used-car lots can exist in a world of their own," he said.
Of all the car-retail channels, the only group offering lower prices than used-car lots is private owners, Reed said.
But there are potential drawbacks, he said. For example, independent used-car lots often can't match certified used-car warranty programs that new-car dealers offer as part of the purchase price.
Instead, used-car lots often have optional extended warranties from third-party providers. Miracle Motor offers a five-year warranty for about $1,300 that is designed to be similar to the factory warranty for a new car.
Miracle Motor, its cars, customers and commitment to family spring from its founder and the challenges he faced as a young adult.
D'Andrea grew up in Akron, the sixth in a family of 11 children. He came to Columbus in 1978 to play football at OSU. After college, D'Andrea was invited to try out for the Minnesota Vikings. His professional career never made it out of training camp; he was cut before the final roster was named.
He returned to Columbus in 1981 and threw himself into a new job as a car salesman. He was quickly promoted to management, but he didn't have time for much else.
One of the priorities he neglected was his family, he said. He had married his high-school sweetheart in 1982. The first of their seven children was born in 1984. As his family grew, he had less and less time and energy for it. His focus on work reached a peak in 1986 when he started his own business, Big 10 Auto Sales, on the East Side.
"I was very successful in business, but I had no inner peace," he said.
In the summer of 1987, his mother persuaded him to join her on a trip to Medugorje in the country then known as Yugoslavia. They were among the many visitors to a shrine made famous a few years earlier by six children who said they had seen an apparition of the Virgin Mary.
D'Andrea came home with a desire to renew his Catholic faith and become more dedicated to his family.
In 1989, he sold Big 10 Auto Sales and started a new business in Whitehall with the Miracle Motor name. That business was closed on Sundays and encouraged all employees to have a sensible balance between work and family.
He expanded to Morse Road in 1996, and later consolidated the business at that location.
He was joined in the business soon after by Henson, described by co-workers as the most prolific salesman. He is 6 feet tall and weighed 275 pounds during his playing days. Despite his imposing size, his voice is soft and his sentences are short.
"I just try to keep a good work ethic," he said.
For customers who would prefer rapid-fire talk -- and a few jokes -- there's Mike Armstrong, who started last year. Earlier, he was a stand-up comedian, actor and writer. He had small parts on television shows such as Martin and The Jamie Foxx Show, and might be most recognizable to local audiences from his ads for Safe Auto insurance.
"I laugh a lot," he said.
Armstrong has embraced the Internet as his main source for sales leads. Most of his customers learn of a vehicle on the Internet and make an appointment to see him, rather than just showing up on the lot. Thanks to national car-buying Web sites, some of those customers come from as far as New Hampshire and Florida.
D'Andrea's main role in day-to-day operations is as a buyer of vehicles. He goes to three local auctions per week. The majority of the cars he buys are lease returns that are less than 3 years old. A little more than half of them go to the lot for sale. The rest are sold to other car dealers for their used-car inventories.
Much of D'Andrea's work can be done at home, which has been his goal all along.
Looking ahead, he said he would be happy if he sells as many cars in 2009 as he did in 2008.
One obstacle is the recent decline in lease programs at new-car dealers. Dealers and lenders have soured on the concept because they have been burned by the rapid depreciation in resale values for certain models. If the recent leasing decline turns into a long-term trend, businesses like Miracle Motor will have fewer lease returns to choose from, which will lead to higher auction prices.
D'Andrea said he is aware of the potential for problems and is ready to adjust. In this Buckeyes-centric environment, his assessment sounds like something he probably heard on the football field.
"The biggest room here is the room for improvement," he said.
2380 Morse Rd
Columbus, OH 43229
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