Improving the wholesale performance of your vehicle inventory can be the key to whether or not your dealership thrives in today’s marketplace.
With a little bit of knowledge about your business, the local market and vehicle disposition and acquisition, you can turn your wholesale business into a consistent six-figure revenue generator for your dealership or dealer group.
However, before ever jumping into the wholesale market and you begin disposing and acquiring vehicles, you’ll need to thoroughly understand your dealership’s ability to sell particular vehicles, the local market’s interest in and need for specific vehicles and the dealership’s plan for acquiring and selling the most sought-after and profitable vehicles.
Here, in the first of two posts on wholesale profits, we offer a few tips on getting more eyes on your vehicles for achieving maximum profits for your dealership.
To start, you’ll need to work closely with your auction partner to review and compare past performances with industry and market data. This will help you identify areas that need improvement and to set realistic goals. When reviewing these reports provided by your auction partner, for example, you’ll need to look at several key performance indicators including:
Retention Percentage (95 or better)
Conversion Rates (80 or better)
Average Badge Count in Lane (1 to 1 ratio)
On-Line Attendance (4 to 1)
Unique Bidder (2.5 per)
Average Number of Bids (5 per)
Once you get into the auction lane, it is all about presenting the highest quality vehicles possible, positioning “absolute seller” vehicles strategically within your presentation line-up and not presenting any “Reruns” or previously shown vehicles.
In addition, to get more eyes on and generate interest in your vehicles, you’ll need to merchandise the vehicle online three to four days prior to the auction sale to give potential buyers at least 24-48 hours of pre-sale viewing. You’ll also need to present online a comprehensive condition report either from the auction provider, a third-party or yourself, as well as six-to-eight exterior and two-to-four interior pictures.
Finally, on disposition, you’ll need to take a 360 degree view of your inventory and the market to report on and analyze your sales and market data in order to capitalize on your inventory and market demand for the long-term. For example, reviewing Weekly Buyer Reports for your dealership and the local market in Sales Meetings is a must and will help you make adjustments to tactics for disposing of vehicles efficiently and profitably.
Please join us for the second part of our discussion on Wholesale Profits – the Vehicle Acquisition – here next week.