There are very few dealers out there who can retail 100% of the cars they acquire. However, there will always be an exception to rule #1: retail first. It’s how you deal with this exception that will drive the success of buying more cars from consumers.
I learned a long time ago that those in the car business look at time as a precious commodity. What confuses me about those same people is that when it comes to the disposal of what I like to call immediate wholesale, they seem to drag their feet. Experienced dealers know when a vehicle will not meet retail needs the minute it is traded. Still, a quick run through the shop to ensure the safety of the unit and to confirm your suspicions is fine. But these units that do not meet retail standards should be turned back into cash as soon as possible.
Think about it like this. When a customer gives you a check, the first thing you do is take it to the bank and deposit the money. It’s the only way to claim it as your own. Immediate wholesale needs to be thought of in the same way. The urgency at which you send your checks to the bank is how you need to deal with your immediate wholesale. The process should be clearly defined and consistent.
That does not mean you call your favorite wholesaler for a buy bid and take that offer as the gospel. The only way to ensure optimal profit and turn is by having as many dealers as possible bidding on your vehicle at once. The cool thing about an auction is that it is the only place a dealer can receive an offer to buy their car for more than they thought it was worth.
Yes, the same thing can happen on the other side of that point, but a consistent offering, sales environment, vehicle disclosures, and steady sale rate will yield tremendous results. It has been proven by both CarMax and Carvana, both of whom run very strong LIVE/ONLINE auctions where they quickly dispose of their â€˜Immediate’ wholesale units.
For more information on how to set up a consistent auction for your immediate wholesale, reach out to me directly or be sure to come by the booth at NADA and learn more about our product offerings.