Ken Lucci 0:23

Hey, good afternoon and welcome to another exciting episode of the Ground Transportation Podcast with my co-host, James Blaine from Pax. Say Hello,

James Blain 0:33

Hey there everybody. How are you?

Ken Lucci 0:35

and Eric Coolbaugh from Advantage Remarketing is our, uh, guest on this episode. But before we, we get into, uh, talking about advantage remarketing, I just want to say flat out, this is the only place in the chauffeur transportation industry that you can go for continuous education every single week. if you listen to the podcast, you'll pick up more tips in one hour on this podcast than you will, and for no money. You don't have to travel anywhere. You don't have to get a hotel room, you don't have to buy a conference ticket. So, uh, really, really happy to say we have had. Over 70,000 views of our shorts. And, um, we have had 5,000 downloads or 5,000 plays of the podcast. So we're very, very happy to be, uh, continually providing education at no cost for the chauffeur, transportation and motor coach industry. uh, now I'm happy to introduce a very close friend of mine, uh, Eric Augh Advantage Remarketing. Um, and Eric is, uh, I have to tell the story of how we met. I was doing strategic consulting for a client in, uh, I think 2017, where this big guy walks through the door larger than life and introduces himself to me, and we've been best friends ever since. So, Eric, really, uh, thank you for coming on the podcast and really appreciate you, uh, joining us today.

Eric_Coolbaugh 2:05

So it's my pleasure, Ken. Thanks for having me. And I can't believe 70,000. What

Ken Lucci 2:10

70,000 downloads or views of our shorts, of our, our, our, our Facebook, uh, short videos.

James Blain 2:17

And, and there you go. Let's clarify that. We don't mean like our literal shorts, right? Like the ones we're wearing, we mean like shorts on YouTube and whatnot. For the younger generation,

Ken Lucci 2:25

Correct?

Eric_Coolbaugh 2:26

you know Ken Lucci, he doesn't wear shorts.

Ken Lucci 2:29

No,

James Blain 2:30

had to go there. Had to go there.

Ken Lucci 2:31

I rarely wear shorts

Eric_Coolbaugh 2:34

I've, I've went to a sauna with him. Trust me. It's,

James Blain 2:37

Oh.

Eric_Coolbaugh 2:38

it's interesting. But anyway, tha thanks Ken. I appreciate you having me. Um, congratulations for all your success. I understand this, you know, a lot of different m and a stuff you've been doing since I spoke to you last time. So kudos to you, man. You do a great job. You become the nationally recognized speaker for the limo and livery community in a very short period of time. So good stuff.

Ken Lucci 3:01

I'm, I might be overplayed, Eric, a little bit overplayed. So, um, we just hope we add value. That's all we do. Every single week we employ a, uh, producer to do this podcast. We took him off the street and, um, we, uh, gave him a good home. And we, we, you know, we spend a lot of money every single week to support the industry and we, we, we hope people appreciate it. And that's why we brought you on because you've got a kind of, uh, extremely longstanding, uh, relationship with both the Motor Coach and Charet space. Why don't you tell us a little bit about how you started, uh, and where you started in the industry?

Eric_Coolbaugh 3:38

Sure. And I love how you eloquently call me old. By utilizing a lot more words. Um, but yeah. Thank you. Um, so anyway, I've been in the funding side of the livery industry. It's all I've ever done since I was a kid. Started when I was 20, and that was 38 years ago. As an independent sales rep for a consumer financing department, um, was relatively unsuccessful until I found transportation. I remember doing an El Dorado mini bus, uh, and I thought it was an El Dorado sedan. Uh, so when I sent the deal in and, and contracted it and finally got my commission structure, which was five times the amount of any of my other car deals, I questioned why, what is an El Dorado mini bus? And there I was born into the transportation field. So, um, understanding that and that it was a, uh, a need and not a want. I was very, uh, integral in rolling out the transportation division for that point in time. I even forgot what the company's name was. But we started the transportation, uh, funding division for that company. And quickly, I, I found that, you know, I like this business. Uh, I've always loved motor coaches. I've always loved limousines. I've always loved the transportation space. 'cause it always exists, right? It's not going away. Good times, bad times, good economies, bad time. People have to move. so I, I quickly figured out that we can start our own, um, leasing company, which I did with two partners, ed Kay and Michael Kaplan. Both still friends of mine. Uh, and we rolled out Advantage funding back in 1994. Uh, and we were specific to sedans, SUVs, you know, limousines, uh, mini buses, executive shuttles and motor coaches for the transportation, uh, companies. Um, we ran that, uh, independent leasing company to about $80 million and on a, yeah, on a, on a Friday. Well, at that, that point in time, it was large for independence, uh, because we weren't bank owned. We were, you know, a separate leasing company. But we were approached, believe it or not, on a Friday afternoon. And I know Kenny doesn't like when I day drink, but sometimes back then we did. Uh, so just imagine.

Ken Lucci 5:45

I I, I just know when I get the calls when you're day drinking, it's very interesting.

James Blain 5:49

But, but it's Friday afternoon, so we're, we're on that line. Right. It's, it's weekend ish.

Eric_Coolbaugh 5:54

Yeah. Yes.

Ken Lucci 5:55

set the stage. You,

James Blain 5:56

Uh,

Ken Lucci 5:57

uh, you, you, you've had your second or third, and then what happened?

Eric_Coolbaugh 6:00

You know, I, I'm not gonna count drinks, right? 'cause I don't want to be judged. So all I can tell you is a, a girl named Yuki shows up at the reception desk and proceeds to tell my receptionist that she's there from a large Japanese, uh, multi-billion dollar conglomerate and they're looking to buy the company.

James Blain 6:18

Wow,

Eric_Coolbaugh 6:19

So Michael Kaplan, my partner, gets the call and Michael, there's a girl named Yuki here, and he says, ah, send it to Eric. So I get the call from the receptionist and she says the same thing to me, and I said, send it to Ed. Ed was the only person that spoke to Ms. Yuki on that Friday afternoon at about three o'clock and 16 months later, uh, they had purchased 80% of Advantage, uh, funding, and we retained 20% full leadership. And now we had the infrastructure of a multi-billion dollar Japanese conglomerate

Ken Lucci 6:52

What year was this?

Eric_Coolbaugh 6:53

this was 1996.

Ken Lucci 6:56

Oh,

James Blain 6:56

Wow. And how does that change the business, right? I mean, how does that change day to day for you guys?

Eric_Coolbaugh 7:01

Well, just think about it. I, I was, at that point in time, Michael, ed and myself had to personally guarantee every loan we under oath, right? So if the primary, uh, obligor doesn't pay, guess what Ed

James Blain 7:13

on you.

Eric_Coolbaugh 7:14

we do. So this stopped all that, right? We started funding through their funding transactions, which gave us a much lower cost of funds, a much higher, uh, amount that we can lend to the street at much better rates. so it just basically changed our entire organization. Uh, but what was really interesting is they let us continue to keep full leadership. So we had the pen, um, we approved the deals, we structured the transactions, and then we grew that portfolio to about a half billion dollars. Over the course of the next Yeah, uh, several years. And 2014, uh, we were bought out at that point in time, they approached us and what I learned is, uh, that when a, you know, 50 50 partnership wants to divide, you know, you have a conversation when an 80%, 20% multi-billion dollar Japanese, uh, person says, you wanna be bought out. You get bought out. so one door opens another door, you know, one door closes, another door opens. So at that point in time we were sort of restricted from the transportation lending space. So we said, well, our customers also need a whole bunch of equipment financing, right? Lifts, business essential equipment, whatever. And we started their next company called Access Commercial Capital, and that was 2015. Took about a year off, um, that company. We were exclusive to, you know, different types of non transportation assets, but with the same customer base. So we kept in front of them. Um, and thankfully we have thousands of great relationships over the course of the last 30 years. Um, yeah, and we rolled that, we rolled that company into 2017 where we were approached by another, uh, independent leasing company out of Indiana, which bought a hundred percent of that company and wanted us to roll out the transportation division for it. So. We started, we started to do very, very well. And then, uh, 2019 comes in and we get the Covid pandemic and we get shut down in, what was that? March of 2020.

James Blain 9:15

March, 2020.

Ken Lucci 9:16

2020. Yep.

Eric_Coolbaugh 9:17

So remember it well, um, you know, a completely, completely, you know, devastating thing for not only our country and the world, but the transportation industry. Just imagine, I mean, you, you guys lived it, right? So overnight every transportation provider in the United States was told You can't move anybody.

James Blain 9:36

Oh yeah. It, I mean, it was just, I remember being at the show in Vegas, talking to a friend of mine saying, you'd just gotten back from Japan, right. Lines down the street to buy masks. It'll never happen here. Literally, the next month, it ground to a standstill and it just all went downhill from there. So you're, you're not joking. I mean, it was overnight.

Ken Lucci 9:54

So they closed you completely.

Eric_Coolbaugh 9:56

No, no. You talking about the, the, uh, access commercial capital.

James Blain 10:00

Yeah.

Ken Lucci 10:00

Yeah. What happened? What happened to that? Now you, you, I'm confused because we started working together in the middle of the pandemic.

Eric_Coolbaugh 10:09

Right. So Access Commercial Capital, where, where I was working at that point in time, before I started Advantage remarketing, uh, I was working for them and they furloughed me, which I, I never understood that word furloughed. It sounded a lot like fired, but no, they made it sound better.

James Blain 10:26

They just kept the f

Eric_Coolbaugh 10:28

so again, another door closes, one door open. So that negated my non-compete for transportation lending, um, which was, you know, which was, I was actually kind of happy because I've, I've really only existed in this, you know, world, uh, through independent ownership. I, I'm not a good employee, I guess is the answer to that question. So anyway, when, when we got furloughed, I had a lot of time on my hands again, you know, so, um, we were told, um, I guess it was about probably six months. They furloughed me, and it was about six months where I had a chance to just sit down and think about what I wanted to do next. And the same breath I was getting call after call after call from different banks across the United States saying, Eric, we're in big trouble. What are we gonna do with all these repossessions? Um, and I said, look, you know, we, we have relationships that span decades. Um, I have no problem, you know, opening up a facility, which we did a five and a half, half acre facility in Pasadena, Maryland, uh, with my partner mert. And we began taking on repossessed vehicles from banks, um, safely, you know, harboring them and then gently refurbishing them and then waiting till we could resell them. And that actually came quicker than I thought it would. Right. We, we didn't know what, where we were going at that point in time, but we started getting calls from different operators saying, Eric, I. I have to downsize, you know, 15 executive shuttle buses At the same time, I was getting calls from people that were, had contract work that needed to increase their, their, uh, units. So it was really a, a win-win, right? We were able to put two and two together, buying units for our inventory and also consigning units for different parties across the United States that had needs. So that's the way Advantage remarketing was born

James Blain 12:18

so you really are the connector at that point, right? You've got all these connections you've built up, and because of all of these connections, because of all these relationships, it's tying everything together through you.

Eric_Coolbaugh 12:29

correct?

James Blain 12:30

Yeah.

Ken Lucci 12:30

Now, at that point you did not have the lending division, or you didn't have banks that were willing to finance, or you did. Did you

Eric_Coolbaugh 12:38

I did not,

Ken Lucci 12:38

a couple of None

Eric_Coolbaugh 12:40

I, I started basically, uh, you know, with the strategy of, of becoming a storage yard for, for repossessions, I. Uh, I hired shop people. I hired mechanics and, and body and paint people knowing that we would need refurbishment. And then my strategy was to sell these, you know, whenever the market started to come back into, uh, into life.

James Blain 13:01

So what does that look like in terms of the industries that you were connecting? Right. I mean, obviously we've got people that listening to this are in NEMT, they're in Motor Coach, they're in, you know, chauffeur, they're in Taxi. We have all of these different industries. Were you spanning all of those different verticals, or was there a certain one that kind of stood out or that you guys were focused on?

Eric_Coolbaugh 13:20

It was primarily li uh, chauffeur, chauffeur, transportation. So anywhere from sedans, SUVs, limousines, stretch SUVs, limo buses, executive shuttles, and my specialty is motor coach.

Ken Lucci 13:32

So flash forward from the time that you started in the middle of the pandemic, how has the business evolved, um, compared to what you originally were thinking you were gonna be doing?

Eric_Coolbaugh 13:45

Yeah, it's interesting because Ken, you designed our business plan, as I said, um, which, which by the way, you know, if, if anybody needs any type of strategic advice in any facet of, of the transportation space, he's good. And, and I'm not blowing sunshine up your butt, Kenny. And he doesn't,

Ken Lucci 14:02

overplayed. E Eric, I'm overplayed. I'm, I'm too visible. I'm overplayed. I'm sorry. Keep going.

Eric_Coolbaugh 14:07

and Ken is the only person that lets me call him Kenny. Nobody else.

Ken Lucci 14:11

is true. This is true. No question about it. So Yeah. So when did your, when did Advantage remarketing morph into more of a, when did you start reselling with, with vigor in 2021 or when did you pick back up?

Eric_Coolbaugh 14:32

You know, I, I would say that 2020 was a formative year. 2021, uh, is when we really got to work. Uh, and to your, uh, to answer your question that you gave me before about the banking, um, you know, I have a lot of friends in the industry, uh, that all are transportation, you know, professionals and all do a great job. And we were able to cobble together, you know, what we currently have, which is a, you know, seven bank, portfolio of transportation lenders that all do a great job. So, um, you know, when we started to buy and sell equipment nationally, the first thing that people would ask is funding. Because at that point in time, the banks were extremely, extremely tight with regard to who they would lend to and how much. Um, so again, cobbling together people that I knew, I. Um, was very beneficial for them as well. You know, right now we could do app only to about a million bucks, which is an application in three months. Bank statements where any other banking institution's gonna ask you for at least three years worth of financials and all kinds of stuff.

James Blain 15:31

Right.

Ken Lucci 15:32

take all kinds of time doing it and, you know, keep going back. It's like death by a thousand stabs when you try to go to a traditional bank, unless you've got your stuff together well in advance.

Eric_Coolbaugh 15:43

Right

Ken Lucci 15:43

What's your turnaround time? If I say, you know, I love that motor coach. Um, here's my 20%, here's my 10, whatever it is, what's your turnaround from, you know, application to completion of transaction?

Eric_Coolbaugh 15:56

a week.

James Blain 15:57

Wow. Now,

Eric_Coolbaugh 15:59

4, 24 to 48 hours on approval, uh, contracts are sent digitally and then funding occurs, you know, 48 hours afterwards. So we've literally turned deals in three days.

Ken Lucci 16:11

that's incredible. So how many gi, on any given day, how many vehicles are sitting on the ladder? How many do you have for sale on the website?

Eric_Coolbaugh 16:19

So inventory pieces, 30 to the 50. Um, we always have a large assortment also of, of LA West Sprinters, uh, available, you know, being built monthly at the shop. Um, and then I'd say another 20 or 30 consignment units at any point in time. You know, we're being contacted, you know, daily with requests to consign. Um, some of it's difficult, you know, it, it's just, uh, you know, people believe in us, they believe in the product that we turn out of our garages, but when I deal with the consignment, I'm sometimes dealing with people that I don't know. So, although we do our best to investigate that product, we're doing it digitally. It's not on site. So

Ken Lucci 16:58

your own fleet versus consignment roughly.

Eric_Coolbaugh 17:01

50 50.

Ken Lucci 17:03

Interesting. Interesting. So at any given time, you've got 50 to 75 units available.

Eric_Coolbaugh 17:09

Yeah,

Ken Lucci 17:10

What is the most from, what's the easiest vehicle to turn if you get a used vehicle in assuming it's in great shape? What's the easiest vehicle to turn? The fastest vehicle

Eric_Coolbaugh 17:24

right now, late model motor coaches, uh, or any type of late model executive shuttle or something with, you know, in decent condition with low mileage, you know, I'm not sure what the, the tariffs are gonna do. You know, I've heard all kinds of different things. Um, but, you know, people are, are definitely concerned that that $650,000 motor coach, which if you asked me 30 years ago, would a coach ever become a 600,000? I would've said no. Um, but if that 600,000 motor coach becomes a 800,000 motor coach, I don't see it. I just don't see it as a viable asset.

James Blain 18:00

I was about to say, he's, he's kind of hit on where I was gonna go and, and that was that we are hearing time and time again that right now the concern is, is not even abound. That it's also, well, if I have all these 600,000 motor co dollars motor coaches that turn into 800,000 motor coaches, what's it gonna do to my parts and my maintenance cost? And is it gonna be viable to try and run them? And what does that look like? Thankfully, we haven't ran into that, but it sounds like you're seeing a surge in that area as people get ready for that.

Eric_Coolbaugh 18:31

Yeah, and you know, again, there's just, it's, it's all about inventory. It's all about knowing where the assets are. You know, a lot of people don't, uh, we thankfully do

Ken Lucci 18:41

So when I'm looking for a used motor coach, what should I be looking for?

Eric_Coolbaugh 18:46

something that runs good.

Ken Lucci 18:48

But what if I am, assume that I'm a novice in the motor code space? A lot of chauffeur operators are trying to make the connection. They're trying to make the conversion over to do motor coach. What should I be looking for? Would you say, if I'm just getting into the motor code space, buy buy new because you don't know enough about the maintenance? Or do you think it's safe to buy a good quality used coach?

Eric_Coolbaugh 19:11

Unquestionably, you just have to know your network, right? You, you know, you're gonna need certain maintenance, preventative, and certain things to fix, so you have to know who you're going to, right? If you're in the middle of nowhere with no access to a Cummins and or Detroit, you know, diesel engine, uh, repair shop, and you have pretty much nobody that understands motor coaches need you, I would suggest that you think really hard about that because you know you're gonna have issues and you gotta have the ability to get them fixed. Uh, as far as the new side, I. You know, I don't know. I, I, I, I really caution people, I understand you get a warranty and whatever, but these are very expensive items. They're not like limousines, they're not like, you know, Freightliner of cutaways. These are, you know, operating equipment that has a thousand different operating, you know, components on it. So you really need to be, you know, sophisticated and have work for these things to keep them running. to your point, um, I have no problem. I sell used motor coaches every day. Um, and I'm, when I say used, you know, they're not lightly used. I, I've sold 2010, 2012, 2008, you know, up to 2020 threes. Um, and they all, you know, just had the same kind of thing. We go through the coaches, we make sure that the asset, when you get it, is going to be DOT ready and running and all the operating systems working. But after the delivery, we don't know what we don't know.

Ken Lucci 20:36

So what would you say has changed the most since you have gone from financing equipment? You knew what the asset, um, the categories look like, you knew what the trends were. What's the biggest change that you've seen in your time in the industry as far as vehicle, um, you know, vehicle trends?

Eric_Coolbaugh 20:58

You know, there used to be motor coach companies and then there were li limousine and chauffeur

James Blain 21:03

Yep.

Eric_Coolbaugh 21:04

Um, they really didn't cross into each other's space, you know, so, you know, I guess it was what, 15, 18 years ago? I mean, E four fifties were the go-to mini buses. E three fifties, you know, passenger counts, maybe 32. Uh, you know, and then we saw that trend towards the freight line of cutaways and the larger capacity, you know, thirties and 40, uh, passenger. Um, but you know, we, we didn't see the, the limousine operators entering the motor code space, which is. Completely the opposite of what's happening now. Um, you know, coach companies, you know, it was, it was a nine to five business. You call them after five o'clock and that's it. They're closed weekends, I'm closed. You know, the chauffeur transportation came in there and they're utilizing their chauffeur, you know, their way of doing business, seven days a week, 24 hours a day to the larger coaches. So that's been a, a big transition and it's worked out very, very well. I think the limousine guys are doing a great job with the motor coaches.

James Blain 22:04

I, I think we see a lot of that blurring in the line going both ways, right. I'm one of, I'm, I'm lucky enough to sit in a, a bunch of different verticals and one of the things that we've seen to your point was probably about 10 years ago, this shift of. Starting to see guys move towards motor coaches and now we've seen motor coach guys now are starting to run black car fleets. And so I think that blurring of the line is only gonna get blurrier. And it looks like what we're seeing is they're taking the best of the motor coach world, the best of CHA services world. You know, we're starting to see NEMT Tech, we're starting to see all these different fleets kind of blur. What does that do from the standpoint of purchasing equipment, from dealing with these banks, from doing those types of things? Are they gonna view that any differently? If I'm a mixed fleet company than purely a motor coach company, is that gonna change the game for me at all when I come to you to purchase a new vehicle?

Eric_Coolbaugh 22:58

You are gonna get asked questions. Right, which you should have the direct answer to because why would you be aqui acquiring the equipment in the first place? But, but no, I, I see. No, I mean, on the banking side, we're looking for credit. We're looking for revenue, we're looking for comp borrowing, right? So if, if you're buying a motor coach and you happen to be in an EMT, uh, you're gonna be asked a question, whatcha gonna be utilizing the motor coach for, but you can certain, you can certainly explain, you know, what you're doing. I have a contract with a hospital that requires, you know, 56 passenger motor coaches. And then you should understand, you know, what the compliance rules are and how are you going to, you know, perform your preventative maintenance because these are larger pieces of equipment. But at the same time, I, I like the diversification.

James Blain 23:42

Yeah.

Ken Lucci 24:48

W Well, it definitely, when we saw the business fall off, either during the financial crisis or during Covid, it helped to be fully diversified. Right? As

James Blain 24:59

Right.

Ken Lucci 25:00

were making a profit and all the segments you were in. If I, what advice do you have for an operator who's coming up and they want to get the best deals on buying equipment, meaning the best financing deals? What should they be prepared to bring to the table besides three bank statements?

Eric_Coolbaugh 25:22

That's really it. I mean, you know, I'm gonna ask you questions about utilization and you know, how you pricing and so on and so forth, just to be an advocate for you, right? Because if you're under pricing or you, you, you, you're thinking the revenue numbers should be a different amount, we should talk about this, right? And maybe that that'll skew your decision to enter into that marketplace. Other than that, on the credit side, it's an application in three months, bank statements, and that's it.

Ken Lucci 25:47

How do you deal with people that, how do you deal with people with credit problems that, is it still an issue if you had to turn in equipment during the pandemic, or maybe your credit was not perfect prior to the pandemic? How do you deal with that? How do you deal with people that maybe a little bit of challenge in their history?

Eric_Coolbaugh 26:05

We'd sit, we'd talk and we, you know, try to make sense of what happened. Everyone knows what happened during the pandemic, right? Everyone was sort of like left on their own, um, to do, to survive, you know? So, uh, we did have repossessions, we had bank workouts, we had all kinds of things deferrals. Um, but if, if, if credit is challenged and there's a reason behind it, you build a story and then you also layer in the strength of the company as it exists today.

Ken Lucci 26:33

That's a good point. So if you get something in your background, the, the worst thing you want to do is hide it. Right? So you want to come clean as to why you had to do it, what the circumstances was. You know, it was a pandemic. Everybody was going through it. I lost the contract. I, you know, I got caught without enough capital to cover, I lost a contract completely. But then it's building the opportunity story. How mu how important is, you know, is the business plan or how important is the, the, the good quality of how the business is going compared to, you know, the past problems that the people may have had.

Eric_Coolbaugh 27:08

Yeah, and it's very important that owner operators understand their company and where they're going, right? We, we, you know, you can't just say, Hey, listen, I had some credit problems. You know, it is what it is.

James Blain 27:20

And you're drawing a really interesting parallel because Ken, you and I have had guests on here talking about insurance. We've talked about safety programs and what happens when it's time for renewal on your insurance. You have to paint the picture of your company. You have to tell the story. You have to help them understand what's going on. And it's a really interesting parallel here because you kind of have that same thing. You've gotta paint Exactly. You're doing the same thing in a different part of the business. You're painting that financial picture. You're saying, Hey, we might've had some missteps here. There might've been some issues there, but let me walk you through what happened. Let me show you the financial stability. Now you walk you through where we're at now, and so this is kind of a recurring theme that we've seen come up over and over. Let me ask you, and this is really important, Eric. How much of a difference does their ability to tell that story or to paint that picture make? Is this, I mean, this is the difference between getting the asset and not getting the asset right.

Eric_Coolbaugh 28:10

A hundred percent or getting the asset with, you know, a huge down payment, right. Which secures the bank and, and, you know, pays for that risk factor. Right? But again, I, I just don't think it's prudent. I think understanding and explaining your situation past and present and future makes, you know, so much sense. And, and to that point, there's other things, metrics that banks look at, right? Not only is it personal credit, it's pay net, right? Which is a commercial, um, you know, a commercial score of your commercial debt and how you pay it. Uh, but you know, I've, I've seen people that have had short-term problems, which led to delinquency. And I, I try to explain to to them that that payment score affects your buy rate by such a large amount that, you know, do whatever you can to avoid those sloppy payments. Because it, it's gonna just like insurance, right?

James Blain 29:01

now now tell us a little bit more about that. What, when, when you say paint it for, for those of us, I mean,

Ken Lucci 29:06

to pay net?

James Blain 29:07

yeah. What is it? Where does that come from? I mean, is this like a credit score? What? What is

Eric_Coolbaugh 29:11

Yeah. Yeah. So it's, it's, it's basically the commercial version of an Experian or a TRW personal score, uh, any bank that reports to the PayNet. Right. If I, if I deal with, let's say a Sentium Capital or Balboa or one of the larger banks, they all report to a system called PayNet, which reflects their loan and how you pay it to them.

James Blain 29:32

so it's your business's credit score. Basically if, if you don't pay on time, instead of reporting it to Experian or your credit bureau personally, pay net is basically that placeholder in the commercial side.

Eric_Coolbaugh 29:43

Correct. And everybody that reports to PayNet gets access to PayNet.

James Blain 29:47

Okay.

Ken Lucci 29:48

so it's like a club, right?

James Blain 29:49

Yeah.

Ken Lucci 29:50

bank is, is putting their loan information in and keeping it updated, you get to, you get the pool information, you get the information on those companies.

Eric_Coolbaugh 30:00

Yep.

Ken Lucci 30:01

what about DB? How important is like a DB score?

James Blain 30:04

Oh, great question.

Eric_Coolbaugh 30:05

Yeah, it's, to me, it's, it's self-reporting for the most part. So I, I don't trust the data and it really doesn't do anything for me to make a financial decision on somebody.

James Blain 30:14

what else are they looking at then? I mean, obviously pay net sounds like their way to keep, you know, I, I'm gonna report it in here so I don't get burned. You report it in there so you don't get burned and then we watch out for each other. What are the other major factors you're looking at?

Eric_Coolbaugh 30:29

time in business

James Blain 30:30

Okay,

Eric_Coolbaugh 30:31

revenue, through your banking statements and retention and personal credit,

James Blain 30:36

Are they expecting personal guarantees In many cases then?

Eric_Coolbaugh 30:39

almost all.

James Blain 30:41

Okay.

Ken Lucci 30:41

Okay, so when did, when do you get, when do you get off the personal credit thing? When do, in your mind, know, we all had to do it. I had to do it.

James Blain 30:50

Yeah.

Ken Lucci 30:51

and every business I've been in, for some reason has been perceived as a risky business for some reason. Right. The home security business, the physical security business, the boutique hotel business, the chauffeur business, they're all risky for some reason. And I

James Blain 31:05

I, I heard podcasting was just upgraded to risky as well. They, they did that last

Ken Lucci 31:09

is really risky. But is this it? Is this even a business? This is not a

James Blain 31:14

No, no. This is something we do on Fridays for fun.

Ken Lucci 31:17

Exactly. So when as a business owner, I look forward to, is this transportation company saying, whew, don't need to do personal guarantees anymore.

Eric_Coolbaugh 31:28

yeah. So you, you've established yourself, right? You went through those years and it's typically the first five that you've personally guaranteed everything you did. Um, you've borrowed money, you've paid that money back successfully pay nets. Reflecting that, your personal credits reflecting that your financial statements are reflecting growth and, and good margins and

Ken Lucci 31:47

what? What did you say? Financial statements. What?

Eric_Coolbaugh 31:49

what showing growth in good.

Ken Lucci 31:52

statement? No, no, no. You said what is the financial statement? Explain it to the audience please. I'm being facetious. Sorry

Eric_Coolbaugh 31:57

Oh, I,

Ken Lucci 31:58

a prick today. I apologize.

Eric_Coolbaugh 31:59

I was gonna say financial statement is a napkin and a pen. Will you write

James Blain 32:03

Ah.

Eric_Coolbaugh 32:03

you made?

James Blain 32:05

For those of you that are looking to grow past that, my wonderful cohost Ken Lucci, as a course, he can teach you how to grow beyond the napkin,

Ken Lucci 32:13

A hundred percent. You know what? Wait. Whoa, whoa.

James Blain 33:21

but

Ken Lucci 33:21

title right there. Wait a minute. Grow Your financial Statements. Belong the Be

James Blain 33:25

beyond the napkin

Ken Lucci 33:27

Napkin. So financial statements make a difference. I'm happy to hear you say that.

James Blain 33:31

do, are you getting guys that come in on the napkin though, that are just off the cuff? Is that something that you deal with often?

Eric_Coolbaugh 33:37

Oh, I've been doing this for a long time, so Yeah. Yeah. I, I've had, you know, people come to me with million dollar requests and, you know, hadn't filed for two years, and I say, you know, I don't know understand that at all, but do you have some sort of internal p and l and balance sheet? What's, what's that? Um, so, yeah. You know, and I get it, you know, they're running small businesses and they're busy and they're driving and so on and so forth. It's time consuming, but at, on the same breath, I try to get involved with them and explain to them that, look, if you are operating this company and you don't know per asset that you have and per month what you're making, you are really just, you know,

James Blain 34:13

You're guessing.

Ken Lucci 34:14

Yeah, it's totally by the seat of your pants, and then they get into trouble. How often do you run into operators who have or behind on their taxes or behind on filing their taxes?

Eric_Coolbaugh 34:25

You know, I, I would love to say it was a lot, but it's probably 20% of the time, you know, somebody has, you know, something like that. It's, it's really not the majority. And I'll tell you over the course of the last 10 years, and certainly since the pandemic's shut down, I found that, that, that operators are becoming more sophisticated with regard to their knowledge, although we still have a lot of operators that are small.

James Blain 34:46

So what, what would you say are, if you had to pick the top three or top five? The top three are top five things that people come to you that they could have fixed, they could have gotten right, but it's holding them back from getting the asset they want or need. What would those top five be?

Ken Lucci 35:03

Or it's making them pay a much higher

James Blain 35:07

Yeah, absolutely.

Ken Lucci 35:08

get the assets. So what are the top five things that if I

James Blain 35:12

I,

Ken Lucci 35:12

to be a, a fast borrower at the best interest rates, what should I focus on?

Eric_Coolbaugh 35:18

Well, o obviously you can't change time in business, right? But time in business definitely helps you, uh, having, having your checking statements with money in them, right? You know, the last thing a banker wants to see is $32 in the beginning, a hundred thousand dollars going in and out, and then $32 in, in the end, you know, with NSFs and what have you. It just shows that there's some sort of cash

James Blain 35:38

having that cushion there is important then

Eric_Coolbaugh 35:41

It's very important. It's very important. And again, retention shows that you, you're not strapped, right? For cash flow. You have the availability of, you know, free cash flow.

James Blain 35:50

What do they, what do they wanna see there, right? If I've got, if I've got a hundred thousand dollars that is flowing through that account, is that 10%? Is that, what type of cushion are they expecting to see there?

Eric_Coolbaugh 36:02

If you're running low six figures to the account, you should at least have moderate five figures in

James Blain 36:07

Okay. That makes sense.

Ken Lucci 36:08

I'm, you know, at the end of the day, the business, if you are doing a hundred thousand a month, 1,000,002 a year, a million million two a year, and you begin the year, you end the year with money or the same money that you had at the beginning, it's a problem.

James Blain 36:24

Yeah.

Ken Lucci 36:24

Right? So what he's saying is, you know, the, the savings account, the, the liquid capital, that helps his story, that helps the story that, you know, I did, I did a hundred grand last three months, and guess what? I have $60,000 left in the bank. It makes a lot of sense.

Eric_Coolbaugh 36:46

And then concentration, right? Nobody wants to, you know, if we look at the pay net and the, and the business is to Ken's point a $1.2 million business, but you have $1.9 million in relatively new motor coach loans, any bank is going to become very concerned that you're, you have too much debt.

James Blain 37:03

Right. Well, and that come, that's the same as your personal life, right? You know, obviously you, you go, you wanna buy a car, you wanna buy a house, they're gonna look at your debt to income ratio. So it sounds like they're doing the exact same type of math there on your business.

Eric_Coolbaugh 37:16

They are.

Ken Lucci 37:18

Yeah. And, and I mean we, the banks that we deal with when we do, um, when we do financial reviews on companies, they want to see it less than a 0.4, actually less than a 0.3 long-term debt to your, your annual income, they

James Blain 37:32

No.

Ken Lucci 37:33

up to a 0.4. Interesting. Before the pandemic, we, we were working with banks, they would say 0.45. So for a million dollar company you could have 450,000 in debt. But the other piece of that is not Eric, that's not a hard, fast rule. Meaning that if you can say, listen, I bought these two motor coaches because I've got a brand new contract and you can see the revenue coming in, but now I need a few sedans for my regular business. That's, it's really with the, it's the story you can tell the bank, correct.

Eric_Coolbaugh 38:03

Absolutely. I mean, listen to your point, I've had companies that were a million dollar company that grew to be a $10 million company in two years. So anybody would've looked at that on the financial side and said, this is a very risky thing. But to your, to your point behind the scenes, they had three contracts installed that were five year renewable contracts, very profitable contracts, and they had organizational infrastructure to run those contracts. So just because the company looked like it was, you know, leveraging itself quite a bit, they were very sophisticated and they grew the company quickly.

Ken Lucci 38:36

So bank statements that in general, if you do six figures, you should have 40, 50. Let's just say for every a hundred thousand, what do you think you should have leftover at the end of the month?

Eric_Coolbaugh 38:49

Again, I always say moderate five figures. So 35 to $50,000 is fine. You know, some months are gonna be higher, some months gonna be lower, and you know, you might have purchased equipment for cash in those months, but with that story, you know, any banker that's looking and vetting your credit will understand it.

James Blain 39:05

Right.

Ken Lucci 39:06

How important the fact that I have 20 paid off vehicles mean anything to the bank or do they don't care? The titles

Eric_Coolbaugh 39:14

No banker would respond to that very well. They're gonna respond in two different fashions. One, they're gonna wanna secure the assets against your new loans, which is not what, what, what you would be looking to do unless you needed to. Number two, you have fleet of 20 units that are running without payments, and they know that, so that should be reflective on your financial statements as additional cash flow or if we don't have financial statements to your bank statements. But yeah, that's a very positive sign. Um, you know, in the motor coach space 20 years ago, everyone had fleets in every 50% of the fleet was owned free and clear. And the other 50% was, was, uh, payments. And that's the way it always was, you know, and we got to the point where a lot of the guys were, 90% of the equipment was financed, 10% was owned, or sometimes a hundred percent was financed with nothing owned.

James Blain 40:01

Well, and we're seeing that now that we've got new entrance, right, they, they're bringing on first time vehicles. Obviously more of it's gonna be financed because they're building out that side of the fleet. They haven't been running 'em as long, so it makes a lot of sense.

Ken Lucci 40:13

so what mistakes do you see people make where you say, that one's a tough, that was a tough loan to process. What, what mistakes are you seeing people make?

Eric_Coolbaugh 40:22

You know, it's all about repayment history, right? You know, just sloppy payments, just put question marks into any, you know, credit desk. So if you're, you know, if you're not making payments on time because you're just not concentrating on your business, you're really doing yourself a disservice because to your point, if the deal gets through, you're gonna be paying multiple points higher in interest, which is a lot of money over time.

Ken Lucci 40:48

No, No, question about it. I mean, sometimes it, the, the. Interest, lack of a down payment, like a zero down, a high interest rates, the difference between an acceptable gross profit and almost not worth having the piece of equipment not worth having. What's, let's switch to inventory trends. What, what do you see dw, besides stretch limousines, what are you seeing that's just not, that's tough to move? That's from a per perspective of a type of vehicle

Eric_Coolbaugh 41:18

Yeah. Well, to your point, to your point on limousines, you're right. I mean, we still have, and we'll accept trades of, of stretch limousines, but the, the type, the manufacturers are getting very, very specific. Uh, the ages are getting very specific. The avail available areas that will take them is getting very, very specific. So we'll still do it, but I'm seeing that as a long-term trend downward. Right. Uh, as far as, you know, what we saw maybe two years ago, I would tell you that the freight liner cutaways were under pressure, uh, because the tempsa product in both 30 and 35 foot was coming on the scene. And instead of having a. Chassis on body, you were able to get a monocoque motor coach, you know, with a full underbelly luggage and laboratories, you know, that. And you know, again, these are built as buses, not as cutaways. So we saw, you know, pricing pressure on the Freightliner product, and now I'm seeing it relieve itself a little bit more, uh, including the people that I'm talking to in the industry that tell me that the Freightliners are sewing very quickly.

James Blain 42:25

Now, let me ask you something, because you know you've got MCI has 35 foot product. Van Hole has 35 foot product, right? Um, they've got these 30 fives that obviously are gonna be a little easier to navigate. Do you see those kind of being in that same realm of that Tessa, or is that price jump between that Tessa and those others gonna be too great? Was it, was it really kind of shared across that whole range or was it really more of just Tessa's price point and Tessa's vehicle there that you saw as the trend?

Eric_Coolbaugh 42:55

Yeah. And attempts when it came into the marketplace in 2009, I stayed away as a financier, you know, because I've seen new entrants come and go And when they, when they go, it's painful as an asset lender, um, for my customers and for me. So, you know, I stayed away from it. When Bob Foley came into the mix sometime in, I guess 11, 10 or 11, uh, he brought a lot of, uh, you know, credit to that product.

Ken Lucci 43:19

so, but for people who don't know him, he came from where

Eric_Coolbaugh 43:23

a, B, C.

James Blain 43:24

Yeah,

Ken Lucci 43:25

from, A, B, C, and he went over to Temsa.

Eric_Coolbaugh 43:27

Yeah. He was retired for quite a, quite a while, uh, after Ron Cornell died. But he, um, he came back, uh, at the benefit of Tempsa, uh, because he wanted to roll it out. He was, he was the one that was really, um, successful in bringing Von Houl, which was probably the most successful entrant into the US marketplace that I've seen in my entire career. Um, he was, he was all over that. So I knew we had the skillset, I knew we had the relationships with the banks so we can get them started to lend on attempts of product. And then to your point, James, the uh, price point, you know, was just, it. It had, you were of par to a freight line of cutaway and now you have a MOOC motor coach. So it was a no-brainer.

James Blain 44:09

And, and I don't, I don't know that this is still a positioning now that they've, I mean obviously they've, they've got a, a much a different range to what they started with. But, you know, for a long time when I was kind of moving to learning more and moving towards the motor coach industry, a lot of that industry kind of viewed that tempsa as it's a low entry point in the price point. It's a good vehicle, it's a good place to start. And what we would, what I would see a lot was companies would go to those products and that would be kind of their entry point because they knew the price would be lower, they knew it was a good product. Um, at some point they might move to an MCI to a van h you know, to Aravo. But really they were kind of using that as the entry point. And I, I would be curious to know kinda what do you see when you've got people that are kind of those new entrants? Is that still kind of the path they tend to go is, Hey, I'm gonna go through a temp, sir, or what are you seeing for the companies? That are looking for that entrance into the motor coach space.

Eric_Coolbaugh 45:03

Yeah, so it was always the same, right? It was the E four 50 guys going after an F five 50 guy going out to a freight line of guy and then considering a motor coach. So I think the Tempsa product is not really the true guys that are going to the motor coach business all want to these, that is the replacement for the cutaway. Right? You know, it's, it's a, it's a motor coach. I have my underbelly luggage. It's great for college athletics, it's great for, you know, maneuverability as you stated. Uh, but certain guys have the need for 56 passenger motor coaches from the groups. So it's, I I don't really see it as a stepping stone. It's just a, a diversion in the business model. You know, whereas, um, if you need a motor coach, you, you're not going for a 40 passenger temps, a TS 35

Ken Lucci 45:46

Right.

James Blain 45:47

Yeah. That.

Ken Lucci 45:47

so, so you, couple things you, you hit on that are critically important is before you get into Motor Coach, better identify the service center that can take care of it. And it's

James Blain 45:58

Yep.

Ken Lucci 45:59

Hey, I think there's a diesel shop down the street, or there's a cat. There's a cat shop down the

James Blain 46:04

Uh,

Ken Lucci 46:04

go there, visit with them, ask 'em about their capability because there's a hell of a shortage of diesel certified diesel mechanics.

Eric_Coolbaugh 46:13

certified diesel bus. Mechanics

James Blain 46:16

yes. Yes.

Eric_Coolbaugh 46:17

truck. Truck guys are not bus guys. And if you go to a truck facility, yeah. If you go to a truck facility with a bus, prepare to have it sit in the backyard for four weeks before they even look at it.

James Blain 46:30

no. And that, yeah.

Ken Lucci 46:32

That hurts you if you're spending four to six grand on a motor coach payment and it's you losing that kind of production. yeah. I, I, this year I had a really good client, $10 million operator. Great kid. It just does a great job. Who said, Ken, it's time for me to get into Motor Coach. I said, I've been waiting for this. So we did a complete PR financial pro forma with him, we looked at what his break even was. We looked at what his production had to be. We, and, and I said the first thing, where are, what are you thinking you're gonna do for product? I'm gonna do, I'm gonna use a, I'm gonna buy a brand new Tempsa. Okay. Who's gonna service it for you? Oh, I've got, I've got three players within the tri-state market that Absolutely. Have you visited them? No. Go visit them. So it wasn't just a financial piece. It was, this is not like a mini bus. This is, you're not gonna be able to bring this to the freight liner guy that you use. This is a completely different, this is a completely different beast. How do you think the tempsa, uh, what's the power plant in the Tempsa?

Eric_Coolbaugh 47:35

They're typically running Cummins Allison.

Ken Lucci 47:37

So how do you think that they've, they've certainly improved over the years, and I'm not asking to say who's better than that. What do you think of the reliability of the Tempsa product today?

Eric_Coolbaugh 47:48

I think the product and support has gotten very, very good. I really do.

Ken Lucci 47:51

yep. And it's critical. I mean, anybody who's listening to this, I, I don't care what you buy, I don't care who you buy, you can, if you don't have a service center that you have a relationship with. That vehicle can sit and, and the last thing you wanna do is piss off the service center, but, but go visit them before you make a purchase like this. Would you say the same is true for the big freight liners, for the same, for the big cutaways, that you want to establish those relationships much, much in advance?

Eric_Coolbaugh 48:19

You do. But at the end of the day, you know, a freight line of cutaway is, is relatively a truck. Right.

James Blain 48:25

It's got more in common.

Ken Lucci 48:27

It's like a straight

Eric_Coolbaugh 48:28

go ahead, Jess.

James Blain 48:29

no, no, no. I was about to say, I mean, you're, you're talking the difference of it started its life as a truck and then became a bus versus what was born A bus, designed a bus to be a bus. It's a, it's a different animal, you know, and when, um, shout out to International Motor Coach Group, IMG, you know, when we were at their meeting earlier this year, even with some of the larger motor coach operators, they have multiple locations, right? They've got tons of mechanics. One of the things they're struggling with there is actually recruiting their in-house mechanics. So I would say in addition to looking at that service network, just like you brought up a second ago, Ken, knowing what the other players in your market have, you know, if you've got a large motor coach operator in your market that has their own mechanics and you don't go visit them and talk to them, you're making a mistake because that's an opportunity to work with them.

Ken Lucci 49:17

And, you know, we're not emphasize, this is not, this is, we cannot emphasize this enough as far as I'm concerned, because the, the, the mistake I saw a lot of limo guys make in 2019, general, there's a herd mentality in this industry where

James Blain 49:31

Yeah,

Ken Lucci 49:31

has gotten into motor coach. So I have to as well. That to me is not a business decision. Right.

James Blain 49:38

it's the Escalade versus Suburban.

Ken Lucci 49:41

it's exactly

James Blain 49:42

We talk about that all the time.

Ken Lucci 49:43

so to me it's the difference, and you tell me if I'm wrong, it's the difference between operating a prop plane and a full and a jet plane. It's that different.

Eric_Coolbaugh 49:53

It is.

James Blain 49:54

no.

Ken Lucci 49:54

Now the, now at the same time. From where I sit, the margins are much better if you know what you're doing, the margins on Motor Coach Charter, you have the right clientele and if you are priced right, they're the best margins in the transportation business. But you, but you can eat away your margins by going down a path of entering the Motor Coach space without co uh, an absolute plan and total forethought. So talk to a guy like Eric, what, what are you seeing? Hey, listen, I'm thinking of buying a used MCI or I'm thinking about doing this. Talk to your competitors in your region. Don't be afraid to talk to the bus guys, because those guys, I don't, I don't know about you Eric, but I find the bus guys are really a little bit of a different breed. They help each other out a lot more than I see the chauffeur guys do. And I. Even they'll help a total stranger that's passing through their area with a motor coach. Um, ask them what they're using for equipment and don't be afraid to ask whoever's trying to sell you the motor coach. Hey, who's the bigger fleets around that are using this unit? wish I had did that. When I was an operator. I bought MCs and then I saw shiny gold. I'm not gonna even say the, the brand name, but I saw a shiny gold motor coach and I said, I can see the, the marketing, it's gonna be ambassador limousine brings the gold standard and motor coach, that son of a bitch was on the highway, on the side of the highway, you know, more than the mile markers were.

Eric_Coolbaugh 51:31

It is funny

Ken Lucci 51:31

and the funny thing is, after I bought it, I contacted one of the biggest fleet operators in Florida who also bought a ton of them. And I said, listen, I've got model such and such and I'm looking for your input. And they, he started laughing. I've got 50 of 'em. I never would buy 'em again.

James Blain 51:48

Ah.

Ken Lucci 51:49

So I didn't go, I, I assumed my mechanic could handle it 'cause he was handling cis. I didn't go to the service center in Tampa and make friends with the guy and say, listen, are you seeing a lot of these? And to your point, if there were trucking, if there were, if there were trucking above a truck mechanic shop, true statement. If they're not, if they're not, um, specializing in bus, you should go down the street and find somebody who specializes in buses.

Eric_Coolbaugh 52:18

and you know, one of the things we didn't even talk about as a group is the simple fact of. You don't need to go out and buy a Motor Coach day one when you get your first job right? You can easily subcontract this stuff to a reputable bus company that knows buses and how to operate them. You can still charge you 20% on top of what they're gonna give you the rack rates at, and then you could start figuring out your customer base and how much bus business you have, right? Kenny will ask you that. How much did you subcontract before you buy that bus?

Ken Lucci 52:48

the guy that's a $10 million operator, and I said to him, how much did you sub out for motor coaches last year? And he said, 375,000. I said, okay, there we go. I said, what's the problem? Why? He said, I can, I can't get anybody to take my jobs anymore because it's not the price. They're all busy.

James Blain 53:04

Huh.

Ken Lucci 53:05

great. That's the another great example. And then the third thing I said is, what are the hourlies for the quality coach companies in your area? And he told me what they were. I said, now we have something to work with. Right?

James Blain 53:18

Yep.

Ken Lucci 53:18

I mean, I'm, I, I'm seeing the motor coach rates pretty close to 300 an hour now, right? For quality, uh, et cetera. So Eric, what are you seeing besides the stretch limousines,

Eric_Coolbaugh 53:31

Okay,

Ken Lucci 53:31

the high top vans, um, necessary to have a sprinter or are you finding that there's broad acceptance of the transits and. And the Dodge, um, the Dodge High tops.

Eric_Coolbaugh 53:46

so there was a time we, we just got off the motor coach conversation, right? So there was a time 20 years ago, 25 years ago that every motor coach, anybody saw, layman saw was called a Greyhound, right? So it wasn't a Greyhound, it was a Prevo, it was an MCI. It was Avant Hall. It was a motor coach, right? Grey Greyhound was just the large guy out there that used to, most motor coaches you saw was Greyhound or trailers. So I think the same thing as apparent, not with the chauffeur transportation companies, but with their customer base. When they call up, they're mentioning the word sprinter because they've been trained to say sprinter. And obviously everyone loves that star coming at you when they, when the VE vehicle drives up. But I think the terminology that they're stating, and this is after, I mean, Kenny, you and I did it, this is after speaking to a hundred different operators across the United States, that a sprinter is categorized by a black high top van with wood look floors and leatherette seating with good, you know, a trunk space.

James Blain 54:48

It's a catchall turn,

Eric_Coolbaugh 54:49

if I sent you a Ford Transit to that executive van job that you ordered, nobody's complaining.

Ken Lucci 54:56

agree with that.

James Blain 54:57

Oh

Ken Lucci 54:57

when we did this, 'cause Eric and I did a financial comparison on the Mercedes Sprinter and the Ford Transit. Now a couple things. When we did it, we're looking at the the Ford, the gas engine Ford versus the diesel engine. And when we were doing it, what was diesel like? 90 cents more

Eric_Coolbaugh 55:17

Yeah. Yeah.

Ken Lucci 55:18

it was a clear, the Ford Transit was just an it. You had to be 15% higher, higher on your hourly to make the same gross margin. But before we did that, I sent out a survey to 200 operators and George Jacobs from. City picked up the phone. He called me. He said, I'm glad you sent that survey out. He said, doesn't make a damn bit of difference except if you are in the entertainment space and you get somebody that you're pulling up to a private jet and you're is an entertainment entertainer, whether it's music or at, or film, et cetera, et cetera. You better have a Mercedes sprinter or you better ask the question when they're doing reservations. He said. Other than that, no one in the corporate space cares.

James Blain 56:04

Yeah.

Ken Lucci 56:04

I'm looking at that guy and saying, listen, this guy's like the Good House keeping seal of approval. He's been in it for 175 years, and if he says, it doesn't make a difference to me, it didn't make a difference. But I think too many people look at, okay, I have to have a Mercedes Sprinter. And my, my whole point when we look at the price difference is, can you charge more in your market for your client groups for that vehicle? Um, so what other vehicles would you say are moving that you're seeing? Shoot, I wish I had 10 more on the lot.

Eric_Coolbaugh 56:40

Well, I mean, Ford Transit, for example, um, we had purchased a hundred and had them upfitted by a company called Diverge in 2023, knowing that the asset classes were just very, very restricted out there, right? We, we, we, we nobody had visibility on chassis. So I leveraged some relationships that I had to get them. Um, I gotta tell you that the, and the price disparity was approximately $50,000. So you have a black, high top executive interior full luggage wall, you know, the same blueprint as a sprinter. And they were well received because people couldn't get the chassis of any type. But then once chassis started to become available, people I struggled to, to convince them that your fleet should have Ford Transit. We also brought in those Ram Pro Master LA West, which I thought was really cool, not well received. And everyone wanted me to sell 'em a sprinter. So

James Blain 57:37

now do you think that's, and, and, and Ken was talking about sec, uh, second ago. Are we thinking that's a reflection of what the owners perceive, or do we think that that 'cause it, it sounds to me like that goes back to what we talk about all the time, right? It's the owner's perception of the image, not necessarily what they could use and run. Right. Do you think if they would've gone that route and put it in their fleet, they would've seen any difference? Or is this purely owner's perception on that?

Eric_Coolbaugh 58:06

it is 80% owner's perception in my opinion. I mean, listen, o owners, very sophisticated transportation companies know exactly who their clients are. 'cause they're, they're speaking to dispatch. They dispatch is very, you know, they know that you don't send, you don't send Mr. Smith a Ford Transit. He's, he's had it, he's exec and he's freaked out about it. So they know granularly what's up. I'm just thinking the, the smaller companies that are starting and you know, their product lines are airport transfers, how you need $150,000 Sprinter van to do airport transfers? I just don't know because you're competing against a lot of guys with lower priced equipment.

Ken Lucci 58:45

I always ask the question, if you're gonna go with a sprinter versus a transit, are you, are you gonna charge a differential for that? Because

James Blain 58:53

Right

Ken Lucci 58:53

are that much higher? The diesel and the def, your operating costs are that much higher, which is great as long as you have the market for the

James Blain 59:01

to account for it.

Ken Lucci 59:02

the same discussion. I was talking to a huge operator up in Massachusetts. He said, I don't want Es, I don't want iOS that have escalates because I don't, I have suburbans and, and, and across the board, everything I do is Suburbans or Suburban and Expeditions. I don't want a, the corporate account saying, whoa, whoa, whoa, wait a minute. I can't be seen in a Cadillac. Or the reverse is, uh, I don't want that expedition, I want the Escalade that you sent, and I'm

James Blain 59:30

Yeah.

Ken Lucci 59:31

of small operators making the mistake of going out and flat out and buying 125, $130,000 Escalade.

James Blain 59:38

And you know, I'll tell you what, I travel a lot. Can you travel a lot it in, unless you are paying attention. If I just got into the side of a vehicle, I, I don't know that I'm going to massively notice a difference, right? I might see it subconsciously, but the irony about that is they're on the same platform. They drive the same, right? It's, it's a trim level basically. Right? What they did is they took those companies and they made a separate brand, but you're basically almost at a higher trim level. The door's gonna feel the same things are there. Um, I'll hear guys argue, man, you just, they'll just know. But I, I would say I, I think that's one of the big things we see in this industry over and over and over, and it's starting to now happen more and more on the motor coach side. Is that personal image that personal ego is starting to bleed in, which would lead me to ask, is that, so Eric, where you find yourself trying to tell these guys, Hey, based on your financials, based on this, this is where you should be at. Or are people just so dead set on what they want that there's no talking of it? It depends on the guy, right?

Eric_Coolbaugh 1:00:46

I have conversations all the time and I say, you know, I just ask questions. Right? I need a black executive. And do you have any sprinters? Oh, I do. And here's what else I have. What are you using it for? Right? We, we just have a conversation. Um, you know, I, I gotta tell you that it's, it's a lot easier for me to convince somebody to buy a lot more expensive van than a less expensive van that happens to be a Ford. So, I know that's a weird answer to your

James Blain 1:01:11

Well, it's, it's perceived value. It, it makes

Eric_Coolbaugh 1:01:14

I.

James Blain 1:01:14

sense.

Ken Lucci 1:01:15

But it, you know, and I always look, I always tell the whoever's trying to look at a p buy a piece of equipment, will they pay the differential?

James Blain 1:01:24

Yeah.

Ken Lucci 1:01:24

I have to have a Mercedes sprinter. Will your clients pay the differential? How about you ask, how about you say, these are the classes that I can provide you and, and to your point. Put the Sprinter on your website

James Blain 1:01:39

Yep.

Ken Lucci 1:01:40

the transit that you actually have in your fleet and see if it makes a difference. And I argue it doesn't. So I wanna But the last, we only have probably about 10

James Blain 1:01:49

Now we're coming to a close.

Ken Lucci 1:01:50

wanna ask you, I want to delve into the, to the, how you run your business, because you've had me on calls your, your staff calls, um, on Friday mornings. I, I want, I wanna talk about the culture you've created at Advantage. This is not your first rodeo.

Eric_Coolbaugh 1:02:07

Nope.

Ken Lucci 1:02:07

this several times and you've got, got some of the same people you, that were in your original foxhole, decided to come work with you in this brand new foxhole. How did you do that? And how do you, how do you build the culture, the positive culture that you have, and how do you motivate your salespeople?

Eric_Coolbaugh 1:02:30

You lead by example. You know, I, I, I'm a, a road guy for the last 38 years. I've never gotten off the road. So I go physically with my sales staff and my admin staff, or my finance staff, and we visit customers. We get on the road, we go out and we introduce ourselves to people we don't know, and to people we do.

Ken Lucci 1:02:49

don't just do Google. Wait a minute. You don't just do Google PPC ads and wait and see what happens.

Eric_Coolbaugh 1:02:54

You know, when I got into the dealer game, I found that a lot of dealers would take a picture of a product, whatever it is, a brand new mini buss motor coach. They put it on the website and then they pray. I just, I've never seen that as a, I don't understand that that sale.

Ken Lucci 1:03:08

hope is not a business strategy?

Eric_Coolbaugh 1:03:10

you told me that one time, maybe twice.

Ken Lucci 1:03:12

he, he, he is literally a road warrior, but every operator should take, as an example, he visits his

James Blain 1:03:21

Yeah.

Ken Lucci 1:03:22

He introduces his staff to his users. He's out there. He's not just throwing up to his point. He's not just throwing up a picture and, and leaving it to Google and saying, I hope that vehicle sells. How often do you go on the road with a piece of equipment that was available to sell, didn't have a buyer? Buyer? What are the odds that you're gonna sell that vehicle on the road?

Eric_Coolbaugh 1:03:46

I would say every road trip results in sales. It's, it's, it's only a question of, it's only a question of need.

Ken Lucci 1:03:53

caller.

Eric_Coolbaugh 1:03:54

Yeah. Well, yeah, it's true.

Ken Lucci 1:03:55

calling.

James Blain 1:03:56

Well, and Ken, tie this back for a second 'cause there's something else here. He's, he's tapping into something we talked about in the beginning. That's crucial, right? Because he's going out, he's making connections. He is there on purpose. Like he's there in person. He's connecting with people. What did we talk about earlier on this episode? This business came about because he had two different desires and needs coming to him as a result of his network, and he was able to cross connect those. And that led to a business. So I I, I, it can't, yeah, it can't be overstated, right? And we, we see this come up time and time and time again on the podcast. Making those connections, spending that time is just a key strategy. Do you think you could do what you do if you didn't do that?

Eric_Coolbaugh 1:04:45

No, I really don't. Or I wouldn't wanna do it. I mean, people say all the time, Eric, I can't believe you're everywhere. So I, I don't like to be everywhere. Sometimes it does get a little.

Ken Lucci 1:04:54

you are over? Eric, when they say you are all over the

James Blain 1:04:57

Oh, geez.

Ken Lucci 1:04:57

did they say you are overexposed? They do. I don't, I've never heard that about you being told you are overexposed, by the way. He's the best networker in the industry. Okay. When I'll have somebody and I'll say, listen, do you know so and so? Yeah. Go talk to so-and-so and he'll do the same with me. So to me, that relationships, he's, he's built and the way he approached me was, Hey, what do you do? What are you doing here? And we just, we just hit it off. But he's cold calling people to buy his products and services. He's not sitting just,

James Blain 1:05:33

He is going to it.

Ken Lucci 1:05:35

I'm gonna build the fanciest website. I'm gonna hire a digital marketing company and, and I'm gonna do spend gazillions on PPC. He's a road warrior.

Eric_Coolbaugh 1:05:45

So, I'll tell you a funny story because we had a, a delivery just this week to um, an assisted living facility up in Armac, New York. Right? That facility ordered five vans from us in January to go to different senior living facilities. So everyone said turned to me, why would a senior living facility need a sprinter and a high-end portal door? LA West Sprinter that's 80 a compliant, why would they need something like that? I said, because they saw another senior living facility. Have one.

James Blain 1:06:13

Keeping up with the Joneses.

Eric_Coolbaugh 1:06:15

and, and I'll tell you, these are beautiful. The customers love them. I mean, some of these higher end facilities, which by the way are very expensive, so can save you money 'cause you're getting a little older. I.

Ken Lucci 1:06:24

long-term care insurance.

Eric_Coolbaugh 1:06:26

Yeah, yeah, definitely something we should all be thinking about. But, but anyway, they're very, very high end. Uh, I mean, the Armac facility had a saxophone player in the, the, um, reception area. Yeah. And, you know, all decked out marble and so on and so forth. And then we introduced the van and they loved it. And the, and their constituents came out and they were all over it. So I expect to get multiple other sales, you know, after these five to different senior living facilities. But, um.

Ken Lucci 1:06:56

your point, people buy. People buy from, from providers that people in their industry use,

James Blain 1:07:05

Yep.

Ken Lucci 1:07:05

right? So this is a lesson for operators. If you've got one law firm, they're not the only one in town, go sell another law firm

James Blain 1:07:13

Right.

Ken Lucci 1:07:14

them about the use

James Blain 1:07:15

I,

Ken Lucci 1:07:16

What you've described is the use case. If you wanna be perceived as a higher end senior community, you can't have an Econ Ford Econo line sitting out there with all kinds of dents in it. You know? I mean, and the reality is, if they keep that in good shape, that's a 10 year unit for them because

James Blain 1:07:32

yeah.

Ken Lucci 1:07:32

only go a few, a few miles a day at it.

Eric_Coolbaugh 1:07:35

Total cost of ownership makes all the sense in the world. But, but again, you know, we wouldn't have had those sales if we didn't do the road tours. Um, and then, you know, again, we, I. Thankfully have hundreds, if not thousands of operators across the country that I know personally that have, you know, I've been doing business with generationally. I'm very fortunate in that respect. But when you pull up to an operator, you know, it's not just the owner that comes out because obviously that's, we want to speak to a decision maker, but their sales staff comes out, their dispatch staff comes out. They all can now see, touch, and feel the product that hopefully they'll be buying.

James Blain 1:08:13

So as, as we kind of wrap things up, right, we're, we're getting to be kind of the hour mark, uh, what, what would you tell the listeners, right? Knowing that we've got a wide audience, if you had to leave them with one thought, right? Kinda as we bring it to a close, what's the one thing that you would share with them? What's the one important takeaway? If they only got one thing from this entire episode, what's the takeaway you wanna leave them with?

Eric_Coolbaugh 1:08:40

Use Ken Lucci Masterclass.

James Blain 1:08:44

Ken, Ken will be mailing the check, uh, to you shortly

Eric_Coolbaugh 1:08:48

That's, that's 20 bucks, Kenny.

James Blain 1:08:51

Each time he said it, uh, no. And, and two things. One.

Ken Lucci 1:08:55

to your success?

James Blain 1:08:56

Yeah.

Ken Lucci 1:08:56

very humble, but what is the secret to, to Eric's success? Look, we all know guys in the finance space, in this industry whose names are mud. Why is, why are you universally ref refer to you all the time,

Eric_Coolbaugh 1:09:11

So I, luckily I had time on my side, right? So I've been doing what I believe is consistent good work for our industry for decades, uh, that people, you know, they understand and they listen to that, right? So when you know I'm selling a product, it could be across the country. People believe in my ability and discretion to tell them exactly what it is. Um, so all I can say to, if you ask me that question again is understand who it is that you're dealing with, right? Believe in them. Vet them and, you know, make a decision to do deal with people that know the industry. Um, you know, again, 38 years, a long period of time to understand not only the finance side, what works, what doesn't work, trends, um, economic cycles up and down. I mean, I've lived through 'em all. Uh, you know, and, and you can take a guy like me and ask him any question in the world, it doesn't cost you a dime. You could take a guy like Kenny, ask him a question, it doesn't cost you a dime. Um, we're here to share our network and our experiences with any operators, and that's very important to me.

Ken Lucci 1:10:13

No, I mean, at the, and the reality is I, I, I want to help every operator make the right financial decision when they're buying their vehicle. I believe when you get into the larger vehicles, you get into the larger profits, but the b the, the acquisition of the vehicle is the first step. Right. And if you buy it from the wrong person, you just buy it from a website in Nevada that you've never been in Nevada and you're just gonna buy it because you think it's a good price, gonna get into trouble. So it, it's truly a relationship sale. And I think that that's he, why Advantage is so successful. It took off like a rocket ship. I mean, I know, uh, a few other, um, used bus dealers or uh, and bus dealers that can't get lines. They can't get the LA West line, they can't get the product that he has. And I think a lot has to do with, with your relationships that you've built and your integrity.

James Blain 1:11:09

I think that's the perfect lead out, right? So as we close this episode, I think that the real takeaway message here, and I would say this expands really to the reason we made this podcast in the first place. The reason Ken and I sat down and put this together is you've gotta have people that you can trust that are going to tell you what you need to hear, that are gonna give you what's there, that aren't gonna try and say, oh, well this is more expensive. Or, oh, you should, Hey, what you, you said it best earlier in the episode. I ask questions, I find out what they're doing. I mean, I think that speaks to how Ken operates, how I operate. Um, so I think as we close this episode out, the big one is have people you can trust and work with, like always. Thank you everybody for listening. This has been an incredible episode, Eric. Can't thank you enough, Ken. Always a pleasure.

Ken Lucci 1:11:54

Eric, give us the give us the takeaway on where they find you and the website, et cetera.

Eric_Coolbaugh 1:12:00

Sure it's Advantage remarketing.com is the website. You can contact me direct, 8 6 6 6 7 5 2 2 7 1, extension 500. Um, smoke signals, whatever else works as well.

James Blain 1:12:16

and we will drop all that in the show notes as well.

Eric_Coolbaugh 1:12:19

Thank you.

Ken Lucci 1:12:19

hundred percent. We'll make sure that it's, um, it's on the YouTube video and I'm glad we caught you before boating season 'cause I know where you are. Friday afternoons. It's during boating season. Only kidding. you are the hardest, one of the hardest working men in the industry. So thank you very much, Eric Augh from Advantage Remarketing and say ho to say hello to your business partner Murdo. Now. Thank you very much for coming on the podcast.

James Blain 1:12:43

Thanks again, Eric.

Eric_Coolbaugh 1:12:44

Have a great weekend.

1:12:46

Thank you for listening to the ground transportation podcast. If you enjoyed this episode, please remember to subscribe to the show on apple, Spotify, YouTube, or wherever you get your podcasts. For more information about PAX training and to contact James, go to PAX training.com. And for more information about driving transactions and to contact Ken, Go to driving transactions.com. We'll see you next time on the ground transportation podcast.