Get Set for Selling Season

For the last 20 years, April through September represents top sales months for used vehicles. So let's do some simple analysis and look at a few basic processes that will put us in a position to capitalize on the pre-owned selling season. We first want to look at our inventory. Do we have enough? Is it the right mix? How do we know? Start your analysis by tallying the units you sold last year April-September

For the last 20 years, April through September represents top sales months for used vehicles.

So let's do some simple analysis and look at a few basic processes that will put us in a position to capitalize on the pre-owned selling season.

We first want to look at our inventory. Do we have enough? Is it the right mix? How do we know?

Start your analysis by tallying the units you sold last year April-September and running it through your dealer-management system.

Include vehicle year, make, miles, cost, gross profit and days to sale. Identify the highest-grossing, fastest-turning merchandise your store retailed. Compare the results to what you have on the ground right now. What are the differences?

Next, look at all the local market data you can obtain on what sells in your area. This could be R. L. Polk and Co. sales data or reports from an advertising vendor like AutoTrader.com.

If you use inventory management software from vAuto, AAX, First Look or DealerTrack, you have the ability to zero in on a given area and determine what is being sold, how it is priced and how long it is taking to retail within your market.

Again, compare the results to what you currently have on the ground. Do you need to buy some cars? Do you need to wholesale some units and put that money into fresh units that will sell? The data will give you a good idea of how much to stock by make, model and price.

Reconditioning used vehicles can be a serious bottleneck. Determine how long it takes on average to recondition a used vehicle in your shop. If you find that average to be in excess of three or four days, you need to examine your process and the communication level between used-car and service department managers.

Those two once a week should discuss how many vehicles you expect to retail, how many you expect will be coming in on trade and how many you are buying off site?

If you are tracking these items, you should have a good idea. The service manager is aware, based on the number of available technicians and the amount of paying customers, how many shop hours are available for used-vehicle reconditioning.

When you buy a unit at the auction or decide to retail a trade, what process do you have in place to get the vehicle in the shop? Who writes the repair order? Who follows up on the work?

If the vehicle needs parts ordered, where is the vehicle parked? When the parts come in, how is the technician notified and what is the time expectation for completing the work?

Asking these basic logistical questions will raise the awareness of our managers and shave time off this critical process so that inventory isn't needlessly aging while it waits too long for reconditioning.

Now that the units are ready for sale, how does your merchandising look? Our goal should be to have the best-looking inventory in the market. People and defined processes keep it that way.

Nowadays. we have another used-vehicle location to merchandise properly. The Internet. Pull up your inventory on your website and look at the photos. How many do you have? How do they look? Do you have descriptions? Is the inventory priced on the market?

Come up with an advertising plan and stick with it for the next 90 days. Try to create two used-vehicle specific promotions or events for the next six months.

Finally, determine if you have enough sales people to reach your objectives. How many units per month do your sales people sell on average? Will more training get you additional units or do you need to hire more? How long will it take to train a couple of new people?

Examine each point, fix what is broken and be ready for the next six months. History has shown that the business will be there. Will you be in a position to capitalize on the opportunity?

Tony Albertson is executive conference moderator for NCM Associates. He is at [email protected].

Questions or comments about this column? Send us an e-mail at [email protected].

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