Profitability begins well before cars are moving off your lot. The foundation of a solvent auto dealership rests with its ability to manage its inventory in a way that sets up both the customer and salesman for success.
Inventory management is an often underlooked component of profitability. Operating in the black involves more than just touting the features of a car and offering some generous financing.
There are several ways in which an inventory management system can provide a boost to your bottom line.
How to Boost Your Profits with Inventory Management Software
Knowledge of inventory
Having a complete knowledge of your inventory involves far more than simply knowing which cars are parked on your lot at any given time. It includes knowing which cars should be there based on your market demographic.
Different cars sell better in different areas, and an effective inventory management system can align your sales with the needs of your customer base.
Pricing a car on your lot is not just a way to tempt the customer. It’s a way of protecting your bottom line and ensuring profitability. Too many dealerships fall victim to the “double discount” due to inefficient pricing from the onset.
An inventory management system can leverage real-time market data to help you price your cars in a way that is competitive to the market, comparable to third-party applications and protective of your assets.
It’s easy to overlook trade-in values and used car acquisitions when speaking about profitability. Just offer the Kelley Blue Book value to get the customer on the hook, right?
You need the proper leverage to negotiate competitively and that entails granular details such as trim levels and upgrades.
Inventory Management Made Easy
Inventory management software from MAXDigital uses advanced analytics and intuitive decision-making tools to achieve increased gross profits by maximizing inventory turnover.
It’s never been easier or more efficient to acquire, appraise, and price inventory, all while tracking every vehicle that comes in and off the lot in real time. You’ll start acquiring the right vehicles for your market, pricing them appropriately and watching them practically drive themselves off the lot.
The most important automotive tools are not a socket wrench or tire jack. They are the ones used to acquire, appraise, merchandise and sell cars.
Below is just a sampling of the many automotive tools you’ll find at MAXDigital.
Does Your Dealership Make the Most of These Automotive Tools?
- Vehicle pricing tool. A vehicle that is priced based on assumptions and estimations is one that is likely priced incorrectly. A vehicle pricing tool uses actual data to help dealerships price inventory based on market research and sales data. Not only can this tool help you remain competitive, it can provide greater transparency for consumers.
- Appraisal tool. A trade-in is more than just a blue book value. It’s an opportunity to maximize gross profits. This tool leverages the power of comprehensive and accurate vehicle market data so dealerships know what to buy, how many of them to buy, and what price to pay for them.
- Vehicle display page. A vehicle display page (or VDP) is perhaps the most important tool in today’s information-centric marketplace. Online visibility is enhanced when all the requisite information such as fuel economy, options and upgrades is visible on a single page.
- Inventory management. An inventory management tool helps increase gross profits by reducing inventory turnover time and generates data about which cars are right for any given market location.
- Digital retailing. Easily create web pages, digital showrooms, and relevant ads by integrating this platform with your inventory management tool.
- Pricing proof points. Accurate data is used to generate reports that justify and explain why a car is priced a certain way. Not only does it protect your bottom line, but it cultivates trust and builds transparency for the consumer.
- Online reputation management. Defend your name and business against online attacks. Some 87 percent of car shoppers consulted online reviews when choosing a dealership to visit according to one recent survey. With consumers placing such a high level of trust in social media and online reviews, this tool is critical to reducing or eliminating negative reviews and restoring your reputation.
- Analytics. Tracking the actions and behaviors performed on your website allow you to customize marketing efforts accordingly.
Open Up The MAXDigital Toolbox
The key to the MAXDigital automotive toolbox is also the key to maximizing your marketing and sales strategies. Explore some of our other tools, or better yet — schedule a free demonstration to see these tools in action.
Automotive merchandising can begin like a bad joke, and, if done wrong, can end in a bad customer experience.
A man walks into a dealership. He tells a salesperson about a listing he saw online for a particular car. The salesperson leads the man to the car.
“But the car I saw online had more options and upgrades,” the man says.
“Well, yeah, but look — this one has an AM/FM radio,” the salesperson says enthusiastically.
“But the car I saw online was priced much lower than what this sticker shows,” the man says.
“Well, yeah, but that’s if you meet all the qualifying discounts and rebates,” the salesperson says. “But we have great financing!”
You know how this story ends: The man leaves the dealership disgusted and takes his business elsewhere.
The above is an example of poor automotive merchandising.
Automotive merchandising is the manner in which inventory is displayed. Effective automotive merchandising means complete transparency between both buyer and seller regarding pricing details, options and features, mileage, trims, colors, vehicle history, and more.
Effective Merchandising Equals Increased Sales
Some 88 percent of car shoppers use the internet during the buying process, where they conduct searches customized to their needs and sift through dozens of vehicles comparing prices, conditions and more.
With a wealth of information at their disposal, today’s car shoppers are more educated than ever. And if a vehicle is not effectively displayed, there’s a good possibility a shopper will pass it right on by for one that is.
With so much information now available to consumers, dealerships must work extra hard to gain their trust. And any inconsistency between the information a car shopper is getting online and the information they’re getting at the dealership can send them walking instead of driving off your lot.
Automotive Merchandising With MAXDigital
At MAXDigital, we know automotive merchandising. Our merchandising solution allows dealers to:
- Take pictures of inventory and instantly upload them using a simple smartphone app.
- Create and print customizable window stickers and buyers guides that make it easy to update pricing.
- Easily extract options and equipment packages to differentiate a vehicle straight from a desktop or mobile phone.
- Syndicate vehicle listings to over 300 websites including Autotrader.com and Cars.com.
- Create more engaging vehicle descriptions and highlights.
Schedule a free demonstration of our automotive merchandising solution to see how you can turn bad jokes into profitable sales and great customer experiences.
At MAXDigital, we have the highest confidence in our product and the real results we have helped dealerships achieve. We love to hear success stories from the people we work with, and we love the opportunity to share those stories with our readers.
With the help of MAXDigital, BMW of Freehold, New Jersey, is making serious progress. Dori Dado, general sales manager at BMW of Freehold, wasn’t sure what to expect from his relationship with MAXDigital — but now he knows he’s gotten even more than he hoped.
BMW Dealer Success With MAXDigital in Freehold, New Jersey
Dado was uncertain, or perhaps just unconvinced, about MAXDigital at first. After learning about MAX’s co-op partnership with BMW from a colleague, he changed his mind.
“I learned that MAX was the only company that was working with BMW corporately and had direct access to the BMW feed,” said Dado.
Once he made this discovery, BMW of Freehold signed on to use MAX’s Digital Showroom to pair each vehicle in it’s inventory with detailed descriptions on the website. Since Dado’s marketing goal is to direct as much traffic as possible to the dealership website, the uniformity and accuracy of MAX Digital Showroom has brought this dealership unanticipated success.
MAX led the BMW of Freehold sales staff in a “Stop the Drop” workshop in August. Since then, the staff has seen a cut of 63 percent in the average drop from initial selling price of used cars to final sales price.
MAX has also helped Dado achieve a second marketing goal — to increase the amount of time visitors spend on the dealership website. Since adopting MAX Digital Showroom, this time has increased by as much as 30 seconds a visit.
Dado said an additional benefit is how much more knowledgeable and confident the sales staff feels knowing they have MAX Digital Showroom on their side when facing a potential buyer who has clearly done their research.
Unbeatable Support When You Work With MAX Digital
As Dado mentions, MAX Digital gives each of our dealers the respect of our full attention when they need it most. Give us a call with any issues, so we can help you solve the problem quickly and efficiently.