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Best Practices in Selecting the Right Vendor for Your Dealership

Automobile dealers are constantly being approached by vendors, of various products and services, who want to do business with their dealership—for all the right or wrong reasons.

And while cost is a concern for every dealership, selecting a vendor by lowest cost could mean you are sacrificing a high level of service, creating long-term or ongoing problems. Instead of shopping for the best price—look for the best value.

Follow these best practices in selecting the right vendor or supplier for your dealership and you will enjoy the benefits of not only a competent vendor, but a valued business partner as well.

Your dealership, their top priority

When considering vendors, focus on finding a company that will act as a true partner for your dealership’s best interests. A vendor who acts as a business partner views the relationship differently and incorporates your bottom line and customer service goals into the way they conduct business with you.

A point of reference

It may seem obvious, but checking references is an absolute necessity before entering a vendor relationship. Take a trip to their office, meet the staff and observe how they conduct business. Discover if the potential vendor-partner has any long-term relationships with recognized corporate brands and be sure to check the experience level of the senior leadership team.

Strength in numbers

The financial strength of your vendor is a must for a successful partnership—especially with the current economic climate. Research and track all potential vendors’ financial history, specifically to ensure a high level of financial stability. This is especially important for products such as extended service contracts, which can obligate your dealership for up to seven, or as many as 10 years.

Avoid culture clash

It is often overlooked, but make sure the business culture of the potential vendor matches the business culture of your dealership. Do they share your values and customer service strategies? Do they share your goals for exceeding customer expectations? Do they have a process for documenting and settling customer service issues? Make sure they do before making any commitment.



A system to serve

Many vendor-partners will interact with different departments within your dealership—make sure they all are a top priority, and that there are no “favorites.” Some vendors are good with your F&I department but pay little attention to your service department, or vice versa. The relationship must work for all key department managers in order to maintain the teamwork you have established within your organization.

Always ask yourself, “How will this vendor work with all of my departments involved with this product?”

Training tools

Before you enter a relationship with your vendor-partner, identify what training and support services they offer. Also inquire about their technological resources, if applicable. These variables have a direct impact with how easy it will be to conduct business with your vendor on a daily basis.

The benefits of a true partnership

Once you have experienced the relationship with your vendor-partner for a couple of years, look back at how many forced conversations you had to have with them; and once a decision was made, was it an immediate solution to your problem, or did more changes have to occur? If you have selected the right vendor, a decision should only have to be made once.

The needs of your dealership can change from year to year—does your vendor-partner have the flexibility to accommodate those needs?

While short-term solutions may help with your income today, following these best practices to select a vendor who is a true business partner will ensure the best for your dealership’s tomorrow.

Alan Miller is senior vice president of sales for CNA National Warranty Corporation, headquartered in Scottsdale, Arizona. Miller has 25 years of automotive industry experience in sales and as a director of finance & insurance operations. He can be reached at 800-345-0191 extension 705, or amiller@dealermark.com. Learn more about CNA National at www.cnanational.com.

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