Strap a Rocket to Your Pre-Owned Profit Center! Getting Started!

Strap a Rocket to Your
Pre-Owned Profit Center!
Getting Started!
The Journey to Increased Used
Vehicle Sales and Profits in
2010 and Beyond
A DealersEdge® WebCast
with Steve Nickelsen
CEO of Nickelsen Partners LLC
Thursday, December 3rd
1 p.m. Eastern
Introduction by
Mr. Mike Bowers
Steve Nickelsen, CEO
Page 2
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
The 10
building
blocks in
this series
Page 3
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
In Today’s Webinar
The Strategy, the Inventory, and Finding Cars
∎ Selling more than you’d think possible:
a variety of strategies
∎ What should my inventory look like?
∎ Where do I find those vehicles?
Page 4
Selling More than You’d Think…
∎
∎
∎
∎
∎
Outside of Lansing,
Michigan
Woodhouse Auto Family
(Nebraska)
Finish Line Ford (Peoria,
Illinois)
Blue Knob Auto
(Duncansville, Pennsylvania)
TexasDirect (Stafford, Texas)
Page 5
Selling More than You’d Think…
What’s on the Internet
Single Point Domestic
Lansing, MI
■
■
■
■
■
882 used vehicles
65% priced $5,000 to $15,000
36% over 60 days old
94% average price to market
96 market days supply
Strategy and Ideas
■
■
■
Good people
Lots of inventory
Take “anything in on trade; birds, houses, boats, etc.
Page 6
Selling More than You’d Think…
What’s on the Internet
■
■
Woodhouse
Ford-Chrysler-Jeep-Dodge
Blair, NE
■
■
■
469 used vehicles
28% priced $5,000 to $15,000
18% over 60 days old
117% average price to market
93 market days supply
Strategy and Ideas
■
■
Sells 3-400 in remote Nebraska
Segment focus: 47% of inventory is large trucks (only 15% of market)
Page 7
Selling More than You’d Think…
What’s on the Internet
■
■
Finish Line Ford
Peoria, IL
■
■
■
522 used vehicles
29% priced $5,000 to $15,000
18% over 60 days old
91% average price to market
133 market days supply
Strategy and Ideas
■
■
■
■
■
Sells 300+ a month
Low pricing to maximize traffic and sales
Sales people paid salary with volume bonuses
Focus is on “processes”
Website has moving pictures and creative audio
Page 8
Selling More than You’d Think…
What’s on the Internet
■
■
Blue Knob Auto Sales
Duncansville, PA
■
■
■
849 used vehicles
34% priced $5,000 to $15,000
16% over 60 days old
87% average price to market
113 market days supply
Strategy and Ideas
■
■
■
■
■
Sells 600+ a month
Pure used cars – no new franchise
Huge selection, focus on recent models
One-price, very low prices, no-haggle selling
Good value outweighs lackluster service (3.5/5 stars for 74 reviews)
Page 9
Blue Knob Auto’s Strategy Is Internally
Consistent
∎
Mission Statement
(from their website)
– Blue Knob Auto Sales
goal is to provide quality
used vehicles at
affordable prices to our
customers.
– We strive to make the
sales experience as
professional and stress
free as possible.
– Our "one price" strategy
will maximize our sales
potential and enable
Blue Knob Auto Sales to
be an industry leader in
our marketplace.
Page 10
Selling More than You’d Think…
What’s on the Internet
■
■
Texas Direct
Stafford, TX
■
■
■
1,506 used vehicles
29% priced $5,000 to $15,000
33% over 60 days old
100% average price to market
83 market days supply
Strategy and Ideas
■
■
■
■
■
Aim to be 100% Internet and phone for entire sales process
World’s largest eBay Motors dealer
Independent; no new-vehicle franchise
Buy and sell worldwide from Texas location
Streamlined, unconventional approach to stocking, selling, operations
Page 11
What Would You See
at Texas Direct?
∎
∎
Company founders who came out of the software business and
didn’t know – or care – much about the car business when they
started
Most purchases completed on-line or on the phone
– Very few customers on-site
– An impressive phone bank to handle customer inquiries
∎
∎
A huge inventory, with many of those vehicles sold and being
prepared for delivery to customers
Streamlined processes aimed at getting vehicles bought, prepped,
sold, and delivered as quickly and cheaply as possible
– A sophisticated custom-built software system to handle the entire
operations and selling process
Page 12
Keys to Success
∎
Be fast
– “Aging inventory can kill you”
– “Most people hold their losers and sell their winners…. We try and do the
opposite.”
– “Rather than waiting two or three months not to lose $4,000 on a mistake that we
made, we’ll take that hit right away and try and make it up over the next two
months with more prudent purchases.”
– “Of the units we sell, maybe 10% of them are losers.”
∎
Always be buying
– “If you have a lot of inventory you can’t get rid of, dump it on the market and buy
something that you can sell and make money on.”
∎
Compound your assets
– Three main kinds of assets: real estate, cash, and inventory
– Roll the profits back into buying more assets that generate more profits
Source: Zero to Sixty Million and Beyond: Under the Hood of the World’s
Largest eBay Motors Dealership, Mike Welch and Rick Williams, pages 103-106.
Page 13
The Importance of Training
∎
“The first thing that happens
when we hire on a new porter
or other employee is show them
exactly how we want something
cleaned, how we want things
moved, how they should
approach their day, etc. We
also train all our vendors to use
our software….”
Source: Zero to Sixty Million and Beyond: Under the Hood of the World’s
Largest eBay Motors Dealership, Mike Welch and Rick Williams, page 136.
Page 14
Applying “Lean” Principles
∎
Lean = Toyota operating principles
– Eliminate waste of all types: waiting, inventory,
rework, unnecessary motion, etc.
∎
Examples at Texas Direct
– Checking cars in
◆ Used to just be dropped in any open spot
◆ Special parking zone for new arrivals that also
serves as cleaning queue
– Detailing cars
◆ Moved car from arrival spot to detailing area, no
clear priorities
◆ Flow is new-arrival zone to detailing to photo
booth to test-drive area, with each zone flowing
into the next and with clear priorities managed by
line leader
Source: Zero to Sixty Million and Beyond: Under the Hood of the World’s
Largest eBay Motors Dealership, Mike Welch and Rick Williams, pages 110-116.
Page 15
Summary: What’s Driving These New
Strategies?
New
Ideas
New
Tools
Changing
Market
Page 16
Summary: What’s Driving These New
Strategies?
New
Ideas
■
■
New
Tools
■
■
Changing
Market
■
■
■
More Internet research
More Internet shopping
Some Internet buying
Harder to get financing
More restrictions on
financing
Traditional marketing
becoming less effective
New channels for
buying and selling
Page 17
Summary: What’s Driving These New
Strategies?
■
■
■
■
■
AppraisalPRO
DealerTrack IO
FirstLook
vAuto
Others
New
Ideas
■
■
New
Tools
■
■
Changing
Market
■
■
■
More Internet research
More Internet shopping
Some Internet buying
Harder to get financing
More restrictions on
financing
Traditional marketing
becoming less effective
New channels for
buying and selling
Page 18
Summary: What’s Driving These New
Strategies?
■
■
■
■
■
■
■
AppraisalPRO
DealerTrack IO
FirstLook
vAuto
Others
New
Ideas
■
Focus on velocity, not just gross
New strategies and tactics
Changing compensation to drive
better behaviors; more affordable
■
■
New
Tools
■
■
Changing
Market
■
■
■
More Internet research
More Internet shopping
Some Internet buying
Harder to get financing
More restrictions on
financing
Traditional marketing
becoming less effective
New channels for
buying and selling
Page 19
So, What’s Possible at Your Store?
∎
The key is NOT to focus on what
you’ve done in the past.
– As you just saw, several stores are
selling above what you might think.
∎
Things to consider
– Practices and tools right now:
traditional, top 35%, or top 1%?
– Population within 20-30 minutes?
– Knowledgeable competition?
– Available capital?
– Internet marketing vs. asphalt?
Page 20
Forecast and Plan Your Financial Results
∎
A good financial
pro forma will help
you determine if it
is “worth it”.
Page 21
Forecast and Plan Your Financial Results
∎
A good financial
pro forma will help
you determine if it
is “worth it”.
Page 22
Here Are the Kinds of Things You’ll Need to
Think About in Building That Pro Forma
∎
∎
How many unit sales are we targeting?
What kinds of grosses can we achieve?
– Front-end
– F&I
– Parts, Service, and Body Shop for reconditioning
∎
What kind of inventory will we need to support
those sales?
– Units and dollars
∎
What kind of staffing will we need to support those
sales?
– Sales
– Buyers, planners, and other support
– Management
∎
What will we need to spend on software or other
resources?
Page 23
So, What’s Possible at Your
Dealership?
∎
∎
∎
∎
Capital and inventory size
Organization and staffing
Processes and tools
Level of commitment
Page 24
Capital and Inventory:
How Much Can You Afford to Sell?
∎
∎
You can’t sell what you don’t stock.
Your average investment cost per unit?
– $1 million buys 67 units at $15,000 each.
– The same capital buys 100 units at $10,000 each.
∎
How fast can you turn the inventory?
– 100 units in inventory can support 50 units/month
with a 60-day turn.
– The same inventory can support 100 units/month
with a 30-day turn.
– The same inventory can support 150 units/month
with a 20-day turn.
∎
So, $1 million of inventory can support
between 34 and 150 units/month. That’s a
range of more than 4:1.
Page 25
Organization and Staffing:
What Are You Staffed to Sell?
∎
∎
You have to have a sales force of sufficient
size and skills.
How many average sales per salesperson
per month?
– 10 salespeople can sell 100 units/month at an
average of 10/person.
– It takes 12 people if they average only 8 units.
∎
∎
∎
What is your target for unit sales, new plus
used?
How many salespeople do you have?
If you divide your unit sales target by your
number of salespeople, what is the average
target sales per person?
– Do you have enough staff to sell everything you
want to?
Page 26
Organization and Staffing:
What Are You Staffed to Sell?
∎
∎
Are you able to attract a sales force?
Crestmont Used Car Superstore
–
–
–
–
–
Started from scratch
Advertised on Craigslist
85 applied to the ad
The GM called all of them
Ran 26 through an on-line personality
assessment
– Offered 7 jobs
– Six accepted
– Two are in the top 20% of ALL
Crestmont salespeople in their first 3
weeks; competing with 15+ year
veterans
Page 27
Crestmont’s Ad for Used-Vehicle Salespeople
Crestmont Automotive Group has been growing and due to our increased
business levels, we need more people to join our team. We are looking for our
3rd class of Relationship Specialists to start with us on November 23, 2009.
Openings are at Crestmont Hyundai in Brunswick, Crestmont Cadillac, and the
Crestmont Pre-Owned Superstore in Beachwood.
Successful candidates will be positive, outgoing, customer oriented, and wear a
smile all day long. The most important thing is that you have to be great at
following a process and making friends with people you’ve never met before.
We are NOT looking for people who “typical sellers” or “fast talkers”.
Please do not apply if you have experience at another automobile dealership.
Salary of $2,000 a month with upper income potential of $45,000 per year with
benefits available.
If you want to learn more please email your resume and a note on “why you” to
_____ . EOE
Page 28
Processes and Tools:
Do You Have the Capability to Execute?
∎
∎
How good are your processes today?
Do you have the tools you need to
execute those processes?
– Effectiveness: Doing the right things and
getting the right results
– Consistency: Doing things the same way
every time
– Efficiency: Doing things in ways that don’t
require too much staff, or money, or time
∎
Your growth opportunity depends on
the gap between your processes today
and what they could be.
Page 29
Building the Work Plan
∎
Develop your financial pro forma and key
assumptions
– Staffing
– Inventory
– Upfront actions and investment
∎
Do a “gap” analysis: What actions do we
need to take?
–
–
–
–
∎
Add, train, replace staff?
Select, implement, and train on new software?
Design, implement, and refine new processes?
Invest in new office capabilities, facility
refinements, or capabilities (e.g., photo booth,
sourcing work area)?
Build the work plan to close those gaps
– Tasks, people responsible, due dates
– Monitor actions against that plan
Page 30
Getting from Here to There
∎
Sales may have to ramp up, not jump up.
– It takes time to implement new approaches.
– Cleaning out old inventory can take time.
– Building up capital to support bigger
inventories can take time.
– If you need to add staff, that recruiting and
training takes time.
– Increasing velocity without accepting too
high wholesale losses takes time.
∎
As you change, you won’t get everything
exactly right the first time. The learning
and improving process should go on
forever.
Page 31
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
Planning Your Inventory
∎
∎
∎
∎
∎
∎
∎
∎
Four approaches
The right amount
The right mix
The right price
Considering past ROI
Sets
As-is vehicles
Don’t buy without an exit strategy
Page 32
Approaches to Managing Used-Vehicle Inventory
Traditional
Stick to my brand and the vehicles I
know, and buy what looks good at
auction; use rules of thumb
Page 33
Approaches to Managing Used-Vehicle Inventory
Traditional
Classic Sets
Stick to my brand and the vehicles I
know, and buy what looks good at
auction; use rules of thumb
Choose a few “focus” models to
stock in depth, with a clear “price
walk” up from the advertised price
leader to nicer and higher-priced
similar vehicles
Page 34
Approaches to Managing Used-Vehicle Inventory
Traditional
Classic Sets
Stick to my brand and the vehicles I
know, and buy what looks good at
auction; use rules of thumb
Choose a few “focus” models to
stock in depth, with a clear “price
walk” up from the advertised price
leader to nicer and higher-priced
similar vehicles
Pure DealerTrack/AAX
Focus on “core inventory” vehicles
that dealer has sold in the past with
high grosses and good turns (or that
nearby dealers have done well with)
Page 35
Approaches to Managing Used-Vehicle Inventory
Traditional
Classic Sets
Stick to my brand and the vehicles I
know, and buy what looks good at
auction; use rules of thumb
Choose a few “focus” models to
stock in depth, with a clear “price
walk” up from the advertised price
leader to nicer and higher-priced
similar vehicles
Pure DealerTrack/AAX
Pure vAuto
Focus on “core inventory” vehicles
that dealer has sold in the past with
high grosses and good turns (or that
nearby dealers have done well with)
Every unit stands alone on market
days’ supply and cost to market, with
the market measured by Internet
advertising and pricing
Page 36
The Right Amount
Units
Needed?
Dollar
Investment
Average
$/Unit
Page 37
The Right Amount
■
Units
Needed?
■
■
Dollar
Investment
What is your sales target?
What turns can you expect
to achieve?
How many units does that
mean that you need?
Average
$/Unit
Page 38
The Right Amount
■
Units
Needed?
■
■
Dollar
Investment
■
What is your sales target?
What turns can you expect
to achieve?
How many units does that
mean that you need?
Average
$/Unit
What can you afford to stock?
Page 39
The Right Amount
■
Units
Needed?
■
■
Dollar
Investment
■
What can you afford to stock?
What is your sales target?
What turns can you expect
to achieve?
How many units does that
mean that you need?
Average
$/Unit
■
■
What price points best suit your
market?
What cost/unit best matches your
dollar budget and unit target?
Page 40
The Right “Mix” - What Should Your Target
Inventory Be?
∎
Vehicles people want
– In your target market geography
– Adjusted to reflect your target
customers (luxury vs. mainstream)
– Adjusted to reflect nearby
competitors
– Adjusted to reflect intended
specialization (e.g., large trucks)
∎
∎
Bought so you can retail them in
today's "efficient market” and still
make an acceptable gross profit
Reconditioning that makes sense
– Determine your “rules”
Page 41
Planning the Right Mix
Phased
timing
Page 42
Planning the Right Mix
Phased
timing
How
many?
Page 43
Planning the Right Mix
Phased
timing
How
many?
Target
average
cost
Page 44
Planning the Right Mix
Phased
timing
How
many?
Target
average
cost
Brand
mix – not
just your
own
franchise
any
more!
Page 45
Phased
timing
Planning the Right Mix
How
many?
Target
average
cost
Brand
mix – not
just your
own
franchise
any
more!
Those trades we
used to wholesale
Page 46
Planning the Right Mix – and Growth
Page 47
The Right Price
∎
∎
Determine your
strategy
Turn vs. gross profit –
or both
– Where is the gross?
◆ New vs. aged units
– Faster does not
ALWAYS mean no gross
Page 48
Sophisticated Tools Can Help You Drill Down
from the Inventory Matrix to More Specifics
∎
This example
is from vAuto.
Market vs.
Inventory Mix
by Vehicle
Segment
Market vs.
Inventory Mix
by Brand or
Price
Determining the Price Metrics
∎
Here is how vAuto gives you market data…
Page 50
Determining the Model Mix
∎
Here is how vAuto gives you market data…
Page 51
Another Approach Focuses on Past ROI When
Selecting Vehicles to Buy
∎
∎
This information most
easily comes from a tool
like DealerTrack/AAX.
Alternatively, you can also
get the data from your
DMS.
Page 52
What About “Sets”?
∎
Groups of similar vehicles bought and
merchandised together, with a price
“walk” from low to high
– Same model
– Similar vehicles
– No more than 20% of inventory
∎
Benefits
– Low-priced “lead” vehicles to advertise
and show
– Customers can find the right price-value
match for them
– Potential for easier selling and higher
gross profits
Page 53
How Do Sets Work?
∎
Create a “lead” car
– Low cost
– Not nice
– Won’t sell
∎
∎
∎
∎
Have “step up” vehicles next to it
Have higher gross profit vehicles
close
Vehicles must be similar
Sale consultants must to trained in
the “set” selling process
Page 54
How Do Sets Work?
∎
∎
∎
Todd Stephens did sets at a
Chevrolet store in Evansville –
by accident.
He bought a Hummer for
$5,000 behind the average
selling price, only to find out
that it had a stick shift.
The rest is “success”.
Page 55
What About the “As-Is” Segment?
∎
Much lower price point (under
$5,000!)
– So lower inventory risk and higher GP
% of sales
∎
∎
Different competition (independent
dealers, not franchised dealers)
Different rules
– Clear distinction between regular and
as-is vehicles
– Extra care to avoid misrepresentation
– Different vision of the “right” product
∎
Financing challenges
Page 56
An “As-Is Corral” Can Separate Vehicles
Clear Signage for the As-Is Corral Helps Avoid
Misunderstandings
Altered Sales Consultant Approach for As-Is
∎
Training for selling As-Is vehicles
– Vehicles are not inspected
– No warranty expressed or implied
– Encouraged customers to have the
vehicles inspected off the premises
∎
Pay plan
– Flat compensation based upon
vehicle selling price
◆ >$ 1,000 = $100
◆ >$ 2,500 = $150
Re-Engineered Paperwork for As-Is Vehicles
∎
∎
Different colored stock folder
Scaled down inspection – not shown to
the customer
– Road test
◆ Engine performance
◆ Transmission operation
◆ Transmission shift indicator
◆ Brake operation
Setting Standards for
Inventory Purchases and Aging Management
∎
These metrics were developed with one of our clients who uses vAuto to
help them better buy and manage their inventory.
Be lowest
Page 61
Don’t Buy Without an Exit Strategy
∎
∎
∎
∎
∎
How will we price and merchandise this
vehicle?
If it doesn’t sell in two weeks, what will we do?
If it is still on the lot in 30 days, what will we
do?
What happens after 45 days if it hasn’t sold?
What about after 60 days?
Nearly every car can and should be retailed.
Page 62
Don’t Buy Without an Exit Strategy
Page 63
Don’t Buy Without an Exit Strategy
Page 64
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
Finding Vehicles
■
■
Evolution in finding vehicles
Lots of sources
–
–
–
–
–
–
■
Overview
“We Buy Cars”
Service lane
Other dealers
Private owners
Your database
Modernizing and centralizing sourcing
Page 65
Expanding Your Thinking on Vehicle Sources
Page 66
Expanding Your Thinking on Vehicle Sources
Page 67
Finding Used Cars Is Evolving
Traditional
■
Rely on auctions and
trades only
■
Used-car manager
plus outside buyers
■
Every store for itself
■
Very loose
processes around
buy lists
– “That’s too
expensive”
– “I can’t go home
empty-handed”
Page 68
Finding Used Cars Is Evolving
Traditional
■
Rely on auctions and
trades only
■
Used-car manager
plus outside buyers
■
Every store for itself
■
Very loose
processes around
buy lists
– “That’s too
expensive”
– “I can’t go home
empty-handed”
Today’s Top 35%
■
Rely on auctions and
trades, plus maybe
some “we buy cars”
■
Used-car manager
plus outside buyers
■
Every store for itself
■
Stronger processes
– Buy lists that are
mostly data-driven
– Pretty good
compliance with buy
lists
Page 69
Finding Used Cars Is Evolving
Traditional
■
Rely on auctions and
trades only
■
Used-car manager
plus outside buyers
■
Every store for itself
■
Very loose
processes around
buy lists
– “That’s too
expensive”
– “I can’t go home
empty-handed”
Today’s Top 35%
■
■
Rely on auctions and
trades, plus maybe
some “we buy cars”
Used-car manager
plus outside buyers
■
Every store for itself
■
Stronger processes
– Buy lists that are
mostly data-driven
– Pretty good
compliance with buy
lists
Today’s Top 1%
■
Auctions and trades, plus
supplemental sources
■
Centralized sourcing and
appraisal
■
Data person creates buy
lists with the GM and the
UCM and finds many
vehicles on-line
■
Buyers go to auction
■
Heavily data-driven
processes with very tight
compliance
Page 70
Lots of Sources for Used Vehicles
∎
∎
∎
∎
∎
∎
∎
∎
Auctions – lots of vehicles, but
often highest cost relative to
market
Trades – good high-volume
option, but dependent on
strength of new-vehicle sales
“We Buy Cars”
Service lane
Other dealers
Private owners
Your database
Large dealer group auctions
Page 71
Lots of Sources for Used Vehicles: Auctions
∎
Lots of vehicles, but often
highest cost relative to market
–
–
–
–
–
–
–
–
∎
Smart Auction
Manheim
Adesa
Columbus Auto Fair
Montpelier
Erie – under $10k
OVE
Others
Sometimes the “buy it now”
price in the morning is less than
the than the 2:30 buying flurry.
Page 72
Lots of Sources for Used Vehicles: Trades
∎
Good high-volume option, but
dependent on strength of newvehicle sales
– Watch your “look to book”
◆ Do you pay more at auctions that you
do for trade-ins?
– Wholesale loss is not the ONLY
measurement
◆ Think about “throughput” profit:
Future service, parts, body shop,
market share, and another apostle!
∎
Driving the trade with the prospect
will increase your “buy” percentages
Page 73
Lots of Sources for Used Vehicles:
“We Buy Cars”
∎
∎
∎
∎
∎
CarMax
Kelley Automotive Group
Sam Swope Auto Group
Mike Patton Auto Family
Crestmont Auto Group
Page 74
“We Buy Cars” – CarMax Car Buying Center
Page 75
“We Buy Cars” – CarMax Car Buying Center
Page 76
Publicizing “We Buy Cars”
Page 77
Publicizing “We Buy Cars”
∎
These examples are from Mike Patton Auto Family (Lagrange, GA).
Page 78
This Campaign Qualified as a Public Service
Announcement!
∎
∎
TV promotion for
Swope’s “We Buy Cars”
campaign
Local TV talent
interviewed Cary
Donovan, Director of
Used Vehicle Operations,
for a Public Service
Announcement
Page 79
Lots of Sources for Used Vehicles: Service Lane
∎
Salesperson saying “hi” in the
service lane
– Beford Ford (Southpoint, OH)
∎
Letters for free appraisals
attached to repair orders
– Kelley Auto Group buys 10+
units/month this way (Fort Wayne,
IN).
– The first 20 letters got 3 interviews
at Crestmont Cadillac (Beachwood,
OH).
∎
Alternative to offer when price
estimates for repairs are high
– Every RO has an offer to buy.
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Schedule Specific Salespeople to Be in Service in
the Morning
Page 81
You Can Find Great Vehicles
in Your Service Drive
∎
∎
∎
Offer free appraisals to Service
customers
Focus on desirable used
vehicles, or any customer who
might be a good prospect
Have salespeople follow up
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Lots of Sources for Used Vehicles
∎
Where cars
that you
want are
located…
Page 83
Lots of Sources for Used Vehicles: Other Dealers
∎
∎
∎
∎
∎
Location and contact
information
Days on the Internet
Odometer
VIN
CarFax or AutoCheck
Page 84
Buying from Other Dealers:
One Successful Technique
∎
∎
Start by developing the strategic buy list
Create Excel spreadsheet for each vehicle
– Target vehicles at dealers who do not sell that
brand of new vehicles
– Target vehicles that have been in stock at the
other dealer for between 45 and 160 days
∎
Call dealers and ask if they would consider
selling the vehicle
– Avoid referring to this as “wholesale”
∎
∎
Also use proxy bids in OVE
Negotiate purchase price
Page 85
Lots of Sources for Used Vehicles
∎
Other dealers and
private owners
– Here’s the
AutoTrader listings
within 25 miles of
Akron, Ohio
– 373 UNDER $10,000
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Lots of Sources for Used Vehicles
∎
Other dealers and
private owners
– Here’s the Cars.com
listings within 30
miles of Akron, Ohio
– 98 UNDER $10,000
Page 87
Craigslist.com Can Be a Source of Vehicles
Page 88
Use Your Database to Find Vehicles and
Prospects
∎
∎
∎
Salespeople
can contact
people in your
database who
are driving
vehicles you
would like to
own.
Prospecting
should be “a
part of the
job”.
Monitor daily
and coach the
gaps.
Page 89
Lease Expirations Are Low-Hanging Fruit
Page 90
Lots of Sources for Used Vehicles
∎
∎
∎
∎
∎
∎
∎
∎
Auctions – lots of vehicles, but often
highest cost relative to market
Trades – good high-volume option,
but dependent on strength of newvehicle sales
“We Buy Cars”
Service lane
Other dealers
Private sellers
Your database
Large dealer groups
Page 91
Cutting-Edge Dealer Groups Are Modernizing
and Centralizing Used-Vehicle Sourcing
∎
∎
∎
∎
∎
∎
Sourcing
Transportation
Reconditioning tracking
Reconditioning
Vehicle “folder”
preparation
∎
∎
∎
Skilled, focused
resources
Economies of scale
Avoiding bidding against
same-group stores for
vehicles
Getting vehicles to the
“right” store in the
group if they aren’t
selling
Page 92
One Group’s
Centralized Sourcing
Department
Page 93
Doing Research From Successful Dealers Can
Save Time And Money
Page 94
1.
Strategy
2.
Inventory
3.
Finding Cars
4.
Buying
5.
Tracking
6.
Service
7.
Pricing
8.
Marketing
9.
Selling
10.
Disposal
The 10 building blocks in this
series
In the next webinar, we’ll cover
- Buying
- Tracking
- Service
Page 95
Thanks for listening, and
congratulations on your desire to
learn!
For any additional questions, please email me at:
[email protected]
or my cell is 330.665.9469
Steve Nickelsen, CEO
www.nickelsenpartners.com
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