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It's evident that a level of change is needed in the dealership model. We've discussed hiring better, branding better, and countless other things to make a dealership a customer-first business that empathizes with their community. But, many dealers still hide behind feelings that these changes are too big to execute to right now.
I have two things to say to that: 1) It's not going to be easy, but nothing worth doing is ever easy. 2) It isn't expected to happen overnight. This is a long game. If there was a tool that could reinvent business overnight, it'd be groundbreaking. But success is one step at a time. So let's start with a step you can implement today.
Thanks to all the advancements in technology, we have more data than ever. People are tracking their steps, sleep patterns, and a bunch of other stuff that they probably aren't going to actually analyze or fix.
But in business, there's still data that matters. Your used inventory manager should be able to tell you how long you generally hold on to a vehicle, which vehicles are selling best, and what they're usually selling for. Use this information to educate whoever is buying your used inventory. Dale Pollak uses the guiding principle to not buy anything for more than 84% of what you expect to sell it for.
For example, if you're selling a lot of family oriented sedans and you see a blue Toyota Camry come up at auction, you should know that your average used Camry is selling around $13k, you should know that (packs and reconditioning aside) you shouldn't spend more that $11k to ensure you turn the car around quickly and for a profit.
In the same mindset, if you see a red Mustang come up to auction, you should know that those are lasting 180-210 days on your lot and retailing around $22k. So once the auction gets past $18,500, stop bidding.
I know, you don't have any Mustangs on the lot. I know, it'll be cool to share on social media. I know, "someone" will want it. But is it really worth a spot on your lot when you could be better investing your finances into inventory you can sell?
The second practice to start your path to success is to set a cap on your inventory. Don't go to auction with the intent of filling your lot at whatever cost. Go with a budget. If your goal is to fill the lot, you'll make more thoughtful spending decisions. If you sent a kid to a candy store and said "what do you want?", they'll want it all. If you send them with $2, they'll start to decide if they really want more candy or better candy.
So I ask...do you want more inventory or better inventory? Either way, an educated look at your inventory purchasing will lead to better purchasing decisions.