Ben Gutwein, spokesperson for the Auction Broadcasting Xchange, lists capacity and overhead costs among the top challenges for used vehicle retailers, but notes that many dealers are still in a quandary about what to offer for fresh trades and which vehicles to stock.
When I spoke to Ben, he suggested that “Dealers must learn to differentiate between their core and their non-core inventory if they hope to generate high grosses. That knowledge makes it easier to make a wholesale versus auction decision on the inventory you take in on fresh trade just to get someone in a new vehicle.”
Stocking the right vehicles in limited space is also a serious concern. “If you’ve only got space for 50 used vehicles,” Ben observed, “then they better be the right ones”. His suggestion? “Install and embrace a comprehensive used vehicle management system that will enable your staff to buy and sell intelligently without relying on gut instinct.”
Fortunately, systems like this are now available to dealers, some with remarkable features that allow online alternatives to traditional brick and mortar auctions. When a fresh trade comes into the dealership, the dealer can either retail out of that car or use these new technologies to offer the vehicle to thousands of dealers across the US. There are even techniques that allow for private, “in group” offerings in addition to “out of group” sales. In this fashion, the traditional universe of buyers is increased, along with the opportunity for a greater return.
While brick and mortar auctions remain a viable method of reducing used vehicle inventory, smart dealers are taking steps to ensure that they trade for the right vehicles at the right price, optimizing their chances of a higher gross before this “last resort.” And when the auction option is in play, new technologies such as online alternatives are ensuring a larger audience of buyers, reduced transportation costs and ultimately, more money for the dealer.
Vol 2, Issue 6