Here's How to Sell More
How can I sell more pre-owned vehicles? This question comes up at hundreds of NCM Associates 20-Group meetings throughout the country. I'm listing the best solutions that have been shared by thousands of dealers. Develop an inventory model that includes: Make, model, trim, mileage and year. Retail price range or price point. Average turn in days. Optimum stocking levels. Aging policy by category.
April 1, 2009
How can I sell more pre-owned vehicles? This question comes up at hundreds of NCM Associates 20-Group meetings throughout the country.
I'm listing the best solutions that have been shared by thousands of dealers.
Develop an inventory model that includes:
Make, model, trim, mileage and year.
Retail price range or price point.
Average turn in days.
Optimum stocking levels.
Aging policy by category.
Carry no less than 30, but no more than 40, dollar days' supply:
Every segment of your profile should be tracked by days' supply.
Ideal is 30 days' supply plus average cycle time for reconditioning.
Purchase only what you need. Buy what turns. Don't shy away because “they are too high this week.”
Higher marketplace-volatility vehicles should have a lower days' supply.
Have a written buy plan for auctions.
Establish a strategic aging policy ? one policy may not fit all segments:
Strive for an average inventory age that is below 30 days old. Measure it daily.
High-volatility vehicles (factory auctions) need to go fast; 28 days or out.
Older or hard to find models can be kept longer (stable wholesale values).
Have a price strategy for each segment:
Determine the transaction price (not the starting price) for every segment and price accordingly.
Establish price adjustment strategies based on days in stock and vehicle activity.
Track all demo and write-up activity on every vehicle. Adjust accordingly.
Inspect vehicles every 15th day in stock. Determine an exit strategy.
Use the Internet to help determine price points.
Have an ad and marketing strategy that focuses on pre-owned vehicles:
Create your own branding strategy.
Establish funds tat drive shoppers to your website.
Determine your two best Internet lead provider sources and grow them.
Do at least three “Pre-Owned Vehicle Events” a year.
Find your niche in your pre-owned market and become the best at it.
Maximize your Internet sales presence:
Be sure your vehicle presentation is the best in class on your website.
Us a great backdrop for vehicle photos and use it every time.
Make web browsing easy. Inventory should be a click away.
Have a daily trade walk with key managers:
Evaluate every trade daily to determine retail/wholesale disposition.
Estimate reconditioning costs before reconditioning starts.
Chose “best of the worst” and create a “transportation special” segment.
Manage reconditioning and track cycle time with a goal of 4-days average:
Track every repair order.
Track work being done by sublet vendors by having everything on a RO.
Instill urgency in service department.
Try to have one “go-to person” for your pre-owned vehicle manager to rely on for all reconditioning RO's.
Hold service responsible for quality and comebacks.
Track your appraisal-to-purchase ratio with a goal of at least 60%:
Track daily, weekly and monthly the number of appraised vehicles against deals made with a trade.
Track each manager's appraisal-to-trade ratio and post it.
Track your success ratio in trading off-brand vehicles vs. brand vehicles.
Insist that your sales force does an active appraisal on every vehicle.
Assign accountability for consistently missed appraisal values.
Have a clearly defined disposal strategy:
Develop a sealed-bid sale process for non-retail trades.
Determine your disposal strategy for retail off-brand products.
Have a ‘Last Chance” section.
Can you “E-tail” on eBay?
This is a compressed list. Look it over, sit down with your staff and use it as a starting point to sell more pre-owned vehicles.
Tony Albertson is executive conference moderator for NCM Associates. He is at [email protected].
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