Have you been paying attention? I’m sure you know what’s going on. But I’m asking if you’ve really dug into what’s happening in our industry and how it impacts all of us. Dealerships are seeing record grosses, but experiencing dwindling inventory. Times are good. And the sun is bright. But a dark cloud is looming in the distance. As a result, you need to prepare now for what could be coming tomorrow. I don’t mean this to come off all doom and gloom. But the fact remains that you need to acquire inventory now by any means necessary.
I was speaking with a dealer partner the other week about what exact kind of inventory he should be getting for his lot. I told him plain and simple: Everything. That’s right. Everything. There is no wrong piece of inventory to grab. This partner came back to me a few days ago to share a story about how a consumer brought in a vehicle to sell without a trade, and his initial gut reaction was to say, “Thank you, but no thank you.”
My first response was to cringe at the thought of him rejecting a valuable piece of inventory. But as the partner continued to tell his tale, he added that my advice was valuable, so he heeded what I had said and bought the vehicle at a fair price. Now, when he did, he was uncertain as to what to do next. I’m sure this is a position that a lot of you have found yourselves in. What’s the value in a piece of inventory that you don’t think is right for your lot?
Well, I’m here to tell you that on this particular transaction, after buying and moving to auction, it resulted in a net gross of a few thousand dollars. So I ask again…are you paying attention? The inventory is out there, but are you prepared to capture it?
There is literally a bevy of vehicles available at your fingertips. But it is up to you to go outside your comfort zone to get them. It’s time to move beyond the auction-first mentality and start acquiring from consumers that aren’t shopping your inventory. Are you already doing this? Do you have a strategy to stock your lot? If not, it’s time to have a heart-to-heart discussion with yourself about changing your dealership model.
Look. I get it. There is fear in putting a price on a car sight unseen. But now isn’t the time to sit by and panic. Take control of your dealership and drive into the future by creating a roadmap for acquiring more inventory from non-shoppers. It’s about adapting to the modern market. Be bold, be confident, be you. Your brand is unique. So make your approach to sourcing inventory stand out against the competition.
A big portion of accomplishing this teeters on how you advertise that your dealership is accepting vehicles from non-customers. Do you have a landing page with a widget on it to entice sellers? Create a model that instills a sense of urgency and motivates them to participate in the process. And customize it from there. Everything you do should be representative of your brand. Provide sellers with an experience they won’t soon forget by easing friction points.
Now, back to my original point, you probably already know that some of the industry’s biggest disruptors have encountered their own challenges. This is a learning opportunity for the automotive retail industry. Getting creative in acquiring inventory is important. But you must continue to evolve the processes for how you manage and sell vehicles from your lot (or even digital properties).
The model of acquiring inventory from the general public isn’t broken. When the rest of your processes are ironed out, you’ll see a valuable path emerge. The roads aren’t paved with gold, but the fact remains that getting creative in how you source will result in more opportunities, more inventory, and ultimately more money.
I know grosses are good. But now is the time to get aggressive. We’ve seen the market shift in the past, so there is no reason to expect the good times to continue to roll. When things correct, you’ll want to have put in the effort and adopted the technologies that will help your dealership be successful today and tomorrow. Start to think about wholesale as a profit center. For too long, dealers always wanted to see a wash in wholesale. Today, if you are acquiring more units from the public than you need to stock your lot, these should be reconditioned and sold through auctions (ACV Auction) for a profit. Don’t think about profit in wholesale as a bad thing.
It’s important that you know you aren’t in this alone. The automotive retail industry is a place where we can all learn and grow together. There are lessons to be learned, advancements to be made, and experiences to be had. I encourage you to ask yourself the difficult questions. Be serious with yourself and honest in your response. There are answers out there to help you be the best dealership possible. I am happy to help get you on the right path. MAX Digital operates in an ecosystem that can help you source, manage, and sell. Reach out to me any time and let’s chat!