To stock your store with vehicles that turn quickly and generate a good profit, do you rely on gut feel or hard data? If you need help taking the guesswork out of this critical decision, ask your online advertising partners. These companies should be able to provide you with market-based reports that monitor local vehicle supply and demand and track how specific cars have performed on your lot.
Particularly in a changing economy, this information can help you capitalize on current trends and avoid past mistakes. It can help you to know which cars to buy or avoid at auction, which to highlight from your inventory, and how to pay less for customer trades while maximizing your profits from those trades. It can also help you know whether you’re likely to make gross by holding on to an aging listing or if you need to cut your losses and wholesale it now.
These reports can allow you to:
· Match supply with demand: Stocking the right cars at the right time at the right price drives the quickest, most profitable sales. By knowing how plentiful a vehicle is on a particular automotive shopping site and the number of buyers search for it, you can work the supply and demand challenge to your favor. This information allows you to identify cars with low demand and high supply that are likely to rot on your lot and allow you to command a higher price for hard-to-find vehicles.
· Drive future success from past performance: While knowing a vehicle’s previous sale history cannot guarantee the same make/model will sell well now, it can help you to avoid obvious mistakes. Key metrics to consider include how long the car remained in inventory before it sold and its final asking price. This information allows you determine the timeframe during which a listing is likely to maintain gross and the point at which you should lower the price or wholesale it at auction.
In today’s market, your success hinges more than ever on minimizing aged inventory. While no vehicle would be on the lot for more than 30 days in an ideal world, the real world often presents you with different conditions. How many of your current listings have reached the 45-day point? Sixty days? Ninety days? More?
Like most dealers, you probably find yourself growing concerned about moving these cars when you’d rather focus on the “sure things” that sell quickly and turn a healthy profit. Armed with the information in reports similar to the ones we’ve discussed, you can get back on track in the short term—and stay there for the long haul.
Kathy Kimmel brings 20 years of automotive industry and dealership management experience to her role as director of training for Cars.com. Kimmel’s expertise covers every aspect of the dealership, from managing sales and service operations to driving customer satisfaction and implementing training programs to mentor new employees and groom seasoned managers.