8 Tips to Consider Before You Drop the Price...
Have we forgotten, or worse, have we failed to teach new sales managers some of the methods in selling aged inventory outside of having to discount the price? The perspective in our industry over the past ten years is that the only way to sell an aged used car is to drop the price until it sells. While it can be an effective strategy; it costs the store gross profit, and is not the only strategy that a sales or inventory manager can use to help sell aged inventory.
Situations like this require managers to step back in time–before the power of the mighty internet–and remember the methods used to move aged inventory without dropping the price. Here are a couple of offline and online tips that I use when trying to move an aged piece of inventory other than dropping the price.
- Drive the car. While a simple tip; it is often overlooked or not executed due to all the tasks and stressors Sales Managers encounter during the business day. With all those daily tasks and management duties rarely does the aged inventory get driven to see if something is wrong with the unit. Does the vehicle need tires? Is it dirty from sitting on the lot for over 60 days? Did the reconditioning team miss something? Whatever the issue may be, take personal responsibility for getting it fixed.
- Put the aged inventory piece on one of your lot's "hot spots." A good sales manager should know the best drive-by spots on the physical lot. Make sure to park aged inventory pieces on the "hot spots" to ensure drive-by traffic gets a good look at the unit.
- Merchandise the unit with stickers and signs to help increase interest from drive-by customers. Make sure to use bright colors. Also, it is a good time to reprint the vehicle window stickers and buyer's guides to make sure they are clean and professional.
- Pay salespeople spiff on aged inventory units. It is pathetic that some stores pay a measly $50 mini to a salesperson who spends hours with a customer to move an aged piece of inventory. More likely than not, commission-based salespeople are going to attempt to move a customer off an aged inventory vehicle to increase their gross. Salespeople might also conclude that aged inventory might have something potentially wrong with the vehicle. Therefore, why would they want to spend hours of their time for a mini and know that the inventory has the potential for a dissatisfied customer in the future? One way to combat this inherent problem is to reward salespeople with a rolling top 5 aged inventory list. If the unit is aged, allow a 50% paid commission or, if the vehicle is being sold below cost, reward the salesperson with a large minimum commission of $500 for each aged sold inventory piece. Make it worth the salespeople's time to sell aged inventory and it will help.
- Use banners and photo overlays to make the unit stand out online. A simple highlighting of a special feature that isn't always easily seen from the first picture; this simple method can go a long way to increase clicks on a car.
- Re-photo the vehicle. So many times, the vehicle images are taken while it was snowing, or the leaves on the trees are changing. After 60-90 days the season has changed. Take time to go out and retake the photos and update the vehicle's images.
- Change the first image of the vehicle online from the exterior image to an interior image. The interior shot has been shown to get more clicks as it sparks curiosity. Previous online viewers of the vehicles may see it with a fresh set of eyes.
- Re-write the vehicle description. Highlight the vehicle features, pricing, and also the work that was completed to make your unit stand out above the rest.
Margin compression is a reality in the market today; however, as a dealer, you can take additional steps to market your vehicle inventory better and maintain more gross. It takes time and effort; nonetheless, in the long run, the gross profits are worth it.