Buy Wholesale, Think Retail

The Internet makes the used-car industry one big car lot, but it takes more than luck to successfully sell a pre-owned vehicle, remarketing experts say.

James Flammang

April 20, 2012

2 Min Read
Every used car unique says remarketing expert Chad Lemieux
Every used car unique, says remarketing expert Chad Lemieux.

Wholesale used-car buyers who rely on personal preferences to select cars could end up stocking retail lots with the wrong vehicles, remarketing experts say.

Wholesale buyers need to find out and keep in mind what dealership customers want. Buy right, and a profitable retail sale becomes almost certain. Stock wrong, and watch inventory linger and lose value.

Such advice is among best-practices tips industry experts offer at a recent CPO Forum on vehicle remarketing.

“Look outside your comfort zone,” says Len Crichter, vice president of data aggregator DealerTrack.

He recommends studying a dealership’s used-car selling history to see what’s worked before and using analytics to determine the best approaches now because, “We’re in the age of data.”

Analytics lets wholesale buyers identify “those vehicles that give us the highest probability of success,” says John Griffin, a senior vice president at vAuto, a provider of inventory-management software that determines used-car market demands by model.

Think retail desirability when buying wholesale, says David Nelson, general manager of First Look Systems, which also offers inventory-management systems that can determine local-market vehicle demand, from trim levels to colors.  

“We advise dealers to be retail-first,” he says. “Ask yourself, ‘Where does that car have the best fit?’”

In the past, dealers have wholesaled plenty of trade-ins. Now, with the used-car market hot, dealers tend to retail those vehicles.

Even if a trade-in lingers on the lot, Luther Westside Volkswagen will keep marketing the price down rather than dispatch it to a wholesale channel, says Steve Hendricks, general manager of the Minneapolis dealership.

Used-car marketing can’t begin too early, says Chad Lemieux, used-car director for CAR Group, a dealership-management firm.

Every used-car needs to be differentiated, he says: “What is it about this vehicle that makes it one of a kind? Every used car is unique, after all.”

Early marketing should include using a dealership website to post photos of used cars for sale, even before they are reconditioned, says Kevin Nachbar, vice president-sales and remarketing for McCarthy Auto Group in Shawnee Mission, KS.

He also suggests posting PDF files of repair orders showing vehicle-reconditioning work in order to reassure prospective buyers.

“Dealers who think they don’t have to supply information are on the way out,” he says. “It’s just being truthful and honest. Customers want real-time information and they want it now.”

The Internet makes the used-car market “one big car lot,” says George Nenni, vice president of Dominion Dealer Solutions.

Google searches will decline as more Internet users ask their Facebook friends for advice on what to buy, predicts Jacob Solotaroff, general manager of MAX Systems.

Many people in automotive retail have forgotten what it is like to buy a car, he says. “The key is speaking the language the consumer speaks.”

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