Three Ways to Battle for Profits
You’re constantly fighting the good fight and trying to figure out how to move the needle. This year is projected to be the highest for car sales yet, but many indicators show that those numbers are projected to then fall off. As a dealer, you’re constantly trying to fight against new trends that threaten to cut into your margins. Higher levels of competition, higher operational costs and compressed margins keep your dealership on your toes.
So how do you fight back?
1. Stock the right vehicles
Take a moment to think about the vehicles you’re bringing in. Are you simply doing a gut check … “I’m telling you, I just feel good about this one.” … or are you using market data to inform your decisions? Many inventory management tools weigh demand, interest, turn rates and age in real time to determine which vehicles your dealership should be stocking at any particular moment.
2. Maximize your profitability potential
After you’ve got the right vehicles on your lot, you don’t want to waste time or money having them sitting around waiting to be sold. Are you tracking how long it takes to recondition a trade-in vehicle? Are you getting it to market as soon as possible, or is it taking too long to get to the front line? Start by tracking the amount of time and money it takes to get your trade-ins into your lot and evaluate where you can minimize the cost or decrease the time it takes to get to market.
3. Get them sold!
Once you have the vehicles ready to sell, it’s time to think about how to make the sale, and make it quickly. The competition is stiff, so how do you make your vehicles the most appealing? Again, don’t rely on the gut check! Even years of experience and a “feeling” can’t stack up against hard data. Price them effectively by leveraging market data in order to balance maintaining margins while still appealing to customers. Take advantage of tools like New Lot Intelligence which adjust the pricing in real time to fit changes in the market. Be sure you’re leveraging OEM incentives, which can add up to $2,293 per vehicle on average.1 (Letting a tool like ours calculate your incentives can protect you from making the average one to two errors dealers make when calculating incentives.) Finally, optimize your listings with high-quality photos and evocative descriptions and automatically syndicate your listings so they populate the third-party sites. Having the one-two-three punch will be the knock out you need to beat out the competition and trends and make sure your margins pack a punch.
CDK Connected Lot
Better manage your inventory to boost profits. You’ll find all of your inventory needs in one complete package including CDK Used Lot Intelligence, New Lot Intelligence and Lot Merchandiser.
About the Author
Dave Holland is a Director of Product Marketing with CDK. Over his 16 years at CDK, he’s experienced many different roles and gained an excess of knowledge about the automotive retail space. He’s passionate about collaborating with dealers to provide an exceptional customer experience. Be sure to ask him to tell you some stories from his days in the United States Marine Corps!