Price and Speed Become Vital

Getting pre-owned inventory to market fast and first is a goal of dealerships across the nation.

Two examples are Nereson Chevrolet-Cadillac, Detroit Lakes, MN, and Rudy Luther Toyota-Scion, Minneapolis.

Every morning, Nereson Internet Sales Manager Jason Tyge and Rudy Luther Internet Marketing Coordinator Jenna Kostelecky grab special cameras and start creating images of the 15 to 20 pre-owned units taken in trade or arriving from auction and other sources.

The cameras and the systems they link to allow the dealerships to do so-called VIN explosions that automatically transfer vehicle descriptions rather than someone individually and manually entering information such as options, features and trim lines.

That allows Tyge and Kostelecky to include more compelling and distinct descriptions of cars posted online. Their pre-owned managers next set vehicle prices.

Using AutoUpLinkUSA software, the images and data subsequently are bulk uploaded, posted and marketed on the dealerships' and third-party websites.

Tyge and Kostelecky are able to create visually compelling and description-rich online walkaround presentations of the vehicles — and get them into the online marketplace fast.

The advantage of getting inventory to the virtual market first is enhanced when it is priced right, too, says remarketing expert Dale Pollak.

He is founder and chairman of vAuto, a provider of an inventory-management system that allows dealers to order and price inventory based on local market demands.

“We used to price with room to negotiate, but that puts those units, especially those marketed online, at a distinct price disadvantage, because shoppers online can so easily compare prices from unit to unit and dealer to dealer,” he says.

“We can no longer hold margin pricing like that,” Pollak says. “We must price to get the customer into the store. Our price has to be competitive, and we then manage margin not by negotiating but by documenting.”

Documentation includes price-comparison reports and vehicle histories. That can help show buyers why a car may be a better deal, even if priced slightly higher than a similar vehicle elsewhere.

The digital-marketing software used at Nereson Chevrolet-Cadillac and Rudy Luther Toyota-Scion feature an integrated price-comparison tool that enables pre-owned managers to compare their inventory against that being marketed by local competitors, as well as those across town or state.

So when the customer is ready to talk, sales people don't negotiate, but substantiate, showing pricing-tool documents that compare a particular vehicle to others like it that are on the market.

Using such documentation, the salesperson explains why the vehicle is priced as it is and builds value. The dealership still can come off a price, but documentation helps shore up margin erosion.

The problem is not so much customers showing up and saying they want a good deal, but sales people believing they must negotiate to sell, Pollak says.

“Use the pricing tool in every sales meeting and compare two or three of your units against others online,” he says. “This will demonstrate to sales the sophistication you use to set prices.”

The do-it-yourself inventory-listing software is valuable for remarketing, Kostelecky says. “It gives us total control over how we present each vehicle, what we say about them and how we market it online. And we can compare and change prices on the fly.”

Tyge processes, uploads and has his inventory marketed online in about 20 minutes per unit. With a click, he sends the listings to various online shopping sites.

Dealers recognizing the reality of today's market “have to conclude that the only thing they can do to overcome margin compression is to turn the inventory more often,” Pollak says.

Once dealers realize that, “the next logical factor” is playing against the clock, he says. “Getting cars to the market in a very fast, efficient manner is critical.”