A college professor rejected a student’s business plan for a company that would provide reliable, overnight delivery service. Fred Smith founded Federal Express anyway. Western Union scoffed at the notion of a telephone and passed on an opportunity to invest in what would later become AT&T. And both Atari and H-P declined to invest in Apple. Their shortsightedness made Steve Jobs a gazillionaire.
So the inclination of some auto dealers to take a “wait and see” attitude on technology is not only understandable, it has precedent! But the news is not all bad.
According to the New Orleans Times-Picayune, a study by the National Automobile Dealers Association reports that 94 percent of all franchise dealers have Web sites. This would seem to indicate a fairly decisive response from dealers to new consumer habits.
Paul Taylor, chief economist for the National Automobile Dealers Association, said in a recent Wall Street Journal article that “The car buying public understands the bottom line of what they are getting with all the deals they are being offered. If they don't get their price, they'll go somewhere else, or they'll stay home until next month, when something better comes along.”
Because consumers are now researching their purchases and have more product awareness, dealers must take steps to enhance their ability to deal with these customers. But while technology now exists to help dealers more effectively appraise, acquire, liquidate and price inventory, not all dealers have embraced it. A recent study conducted by American Auto Exchange suggests that the vast majority of dealers are not utilizing any kind of inventory management tools to maximize revenues and that many dealers are unsure what will work best for them.
With the advent of new technological developments, dealerships have the capacity to become more competitive, especially with trade-in values. Dealerships using inventory management tools are less likely to lose sales to a competitor because they did not offer enough on trade-in value. The consumer is likely to get more for their trade-in at a dealership using an advanced inventory management system than at other dealerships.
In fact, dealerships embracing this new “automotive science” are realizing an estimated increase of $40,000 per month to their bottom line. That’s one finding of the study which recently examined the effectiveness of appraisal tools in over 500 dealerships.
A hundred years from now, people may look back on the early 21st century and laugh at the actions of contemporaries who acted just like Charles Duell, the myopic US Patents Director. Or they may look back at the adventurers, pioneers, and dreamers who succeeded despite the predictions of naysayers. How will history remember you? Wouldn’t it be nice to be thought of as someone who kept an open mind, and looked at the possibilities instead of the limitations? Someone who said “What if?” and “Why not?” and “Let’s try it” as much as they said “No”! Even if you’re not looking for your place in history, would simply making more money interest you? Consider this an invitation to get out and see how technology can improve your bottom line. And let us never forget the words of Bill Gates who said in 1981, “$640,000 ought to be enough for anybody.”
I wonder if he’s changed his mind.
Vol 2, Issue 5