The history of Inventory+ provides a glimpse into why it’s a profit-driven inventory management solution built for dealers.
By Merritt Critcher
Inventory+ is a pricing, merchandising, and syndication machine, but at its core Inventory+ is powered by the Ideal Inventory Model™, an algorithm that focuses on profit per day. It’s also the culmination of multiple tools and products that led it to become as powerful as it is today. Since its inception, it’s been a tool to help dealers manage their inventory from acquisition to disposition with a focus on increasing front-end profit for dealerships.
Inventory+ uses data-driven analytics to deliver quick answers about vehicles in your inventory and your market to help you make informed stocking and pricing decisions. And more importantly, its focus on your inventory — from acquisition to disposition — is designed to drive profits for your dealership.
It was the foundation of two inventory software platforms — AAX and eCarList — that formed Inventory+.
Simplifying Vehicle Listings
The founder of eCarList — who happens to be my brother, Len Critcher — had a dealership that sold vehicles entirely online. Though online sales were taking off, there was a dearth of efficient software tools to create vehicle listings. The task at the time was manual and quite tedious.
But Len was determined to simplify the process. Aided by a software developer, he crafted a listing tool that housed information vital to online vehicle sales, such as photos, descriptions, and prices. The tool would then load that information onto third-party vehicle-shopping sites.
Len’s online car sales took off, and he quickly recognized that his tool could be adapted for use by other dealerships. The software developer moved into some extra office space at the shipping company I part-owned in suburban Dallas, and eCarList, an automotive inventory and marketing software company, was born.
While eCarlist was getting going, I owned a shipping brokerage that handled the shipment needs for over 200 dealers. We realized we could include anoter essential tool for dealers within eCarList – transportation management. So, we added a feature that allowed dealers to notify their shipping company when a vehicle was sold and ready for transport.
The majority of the dealerships I did shipping for were among the first to sign up for eCarList. It got their cars posted online faster, and they were pretty excited that they could just click a button within the software, and we’d send an 18-wheeler to pick up their car.
As the software technology grew, I got out of the shipping business and joined my brother’s company in 2010. Shortly after, we debuted one of eCarList’s most popular enhancements, its TrueTarget™ mobile app that allowed users to appraise, price, and manage inventory on the go.
AAX + eCarList
Both eCarList and AAX came onto the scene in the early 2000s, when online retailing was in its infancy. Many of the features that appealed to dealers then appeal to them now, though those features have been enhanced and refined.
One of AAX’s major strengths was that it integrated with a store’s dealership management system to analyze past sales transactions to determine which vehicle makes, models, and trim levels sell fastest and for the most profit.
Those vehicles made up a dealership’s Ideal Inventory Model and still do.
Dealertrack Technologies integrated the products after acquiring AAX in 2009 and eCarList in 2011.
Using technology to enhance dealership profits isn’t a new notion for DealerSocket. So, in 2015, Inventory+ became part of DealerSocket’s suite of products.
Taking Inventory Management to the Next Level
Since then, and particularly in 2019 and 2020, we’ve released many new features and placed the software on a new platform. Inventory+ has a new look and feel. It’s nimble, intuitive, and easy to use, whether you’re working with inventory at a single rooftop or across hundreds of dealerships.
Users can set up and save workflows for daily tasks and thus reduce the time to complete those tasks from hours to minutes, something that couldn’t be done in previous versions of the tool.
One dealer group describes the user experience as “frictionless.”
Our enhanced pricing tool allows dealers to work faster and smarter. They’re able to apply pricing rules to their inventory in bulk based on actual incentives from automakers while keeping an eye on other factors such as market conditions, and how competitors advertised prices in relation to MSRP.
In fact, one dealer repriced his vehicles by exterior color as part of his Memorial Day promotion, discounting the prices of red, white, and blue vehicles in a matter of minutes.
Using the tool, he searched for and pulled up his red vehicles, hit “select all” and updated their prices simultaneously. He did the same thing with his white vehicles and his blue vehicles, all within five minutes.
Here are just some of the many Inventory+ enhancements made over the past year:
The Ideal Inventory Model is more accurate and shows in greater detail how your dealership performs with similar vehicles you are either appraising, holding in inventory, or considering acquiring at auction. Again, the goal is to show you vehicle profit potential.
Updated algorithms and data-cleansing technology enable us to give you better and more accurate snapshots of your dealership’s inventory, your sales history with that inventory, and which vehicles are profitable.
We have an amazing market graph, released earlier this year, making waves at our dealerships. Its analytics provide you greater visibility about price in your market by answering questions such as how a vehicle’s price in your market compares with its MSRP and how the price of a vehicle at your dealership compares with prices of similar vehicles at your competitors. The graph also details how many of a specific vehicle your competitors have for sale vs. the number of similar vehicles you have in stock.
Absolute Sourcing, also released this year, streamlines acquisitions by searching for and serving up ideal inventory matches missed during recent appraisals, available for trade at sister stores (if your dealership is part of a group), and available at auction.
Inventory+ is now participating in General Motors’ Dealer Vehicle Inventory Management (DVIM) program. That means GM dealerships using the inventory management tool can now syndicate inventory to GM-participating website providers and programs, including the automaker’s Shop-Click-Drive e-commerce tool.
Since the early 2000s, we’ve been creating software to drive profitability at dealerships. In the past two years, we’ve accelerated that innovation. Now, more than ever, dealers need to take a look at their vendors and ask: Are they helping me, or competing against me?
Merritt Critcher serves as director of product management for DealerSocket’s Inventory+ line, a role in which the 16-year industry veteran works closely with dealerships to develop software solutions that enhance their profitability and cash flow.
A new study reveals a potential starting point for dealers who are just now dipping their toes in the digital waters.
By Gregory Arroyo
I recall a conversation I had with an industry attorney during the early days of digital retailing. Technology vendors believed the Digital Age had arrived, while dealers were saying, “Not so fast.” My question to my attorney friend was, “What’s the holdup?”
He said the problem is dealers aren’t treating digital retailing as an experience — that customers should be rewarded for taking that path to purchase. He suggested that dealerships with separate facilities for fleet sales should consider directing digital buyers there vs. the showroom.
He then relayed his recent experience purchasing his second vehicle from the same dealership. He called the store, explained that he was a willing buyer who simply wanted to update to a newer model, and negotiated the deal over the phone. Expecting the red-carpet treatment for essentially being a rollover, he felt disappointed when he discovered he’d have to wait like the other customers in front of him.
The 2019 study, which included responses from 2,001 consumers, concluded that car buyers weren’t ready to ditch the dealership experience because they still want to kick the tires and take a test-drive. Respondents also said they still needed someone at the dealership to guide them through the process.
I wrote about why I think that represents an opportunity for digital retailing in an April 2020 blog entry, “Digital Retailing’s True Test.” However, I’d like to share an even greater opportunity revealed in this year’s updated study.
See, while the report did show that a majority of consumers still believe buying a car is too big of an investment not to see (81%) or test-drive (79%), it did show that 67% would be more open to buying online if it was a brand or dealership with which they were already familiar.
Again, my convo with my attorney friend came to mind, but so did a discussion I had with a DealerSocket Strategic Growth Manager. He said the main reason some dealers fail to realize the full potential of data mining is because they don’t have a dedicated process. Well, based on that stat from Urban Science, maybe digital retailing represents a missing link.
Take those data-mining campaigns targeting customers approaching the end of their lease or who qualify for smart payment offers. The emails could contain links to a landing page that explains your offer and a link to a streamlined buying process powered by your digital retail tool.
Back in April, another DealerSocket Strategic Growth Manager told me about a Pennsylvania-based dealer group that was rewarded for having a service-drive sales process when the pandemic forced local officials to limit dealers there to appointment-only sales that concluded with service-drive deliveries.
Before the pandemic, the process delivered 100 units a month behind two dedicated salespeople, a sales manager, and an F&I manager, who actually has a dedicated desk (with enough privacy) in the service area. The reason for that is the group wanted that buying experience to feel different and free of pressure.
The group equips the sales team with its inventory management tool’s mobile app (Inventory+) to feed appraisers with scanned VINs and photos of every car that comes into service. The appraisers then prepare a package that includes a vehicle history report, documentation on the vehicle’s going price in the local market, its fair Kelley Blue Book value, a check voucher for an amount over that value, and the salesperson’s business card.
Signage in the service drive lets customers know they can get a free vehicle evaluation by texting a specific number or talking to their service advisor. All customers get an appraisal, but the hand-raisers represent high-value targets the sales team engages.
However, even customers who don’t bite get the appraisal package. They also get enrolled into a CRM-powered campaign that includes email and a phone call — the latter scheduled for the day after the customer’s service visit to ensure satisfaction and to revisit the offer sheet.
I can see three potential opportunities in that process for digital retailing to have an impact. Maybe it’s a kiosk in the service area loaded with a digital retail tool like DealerSocket’s PrecisePrice; perhaps it’s tablets. Whatever the case, digital retail should be a part of those follow-up efforts, whether it’s a link in an email or guiding customers through the process over the phone and emailing a link to their PrecisePrice deal.
And just maybe that buyer’s journey you create in the service drive serves as the entrance for sales opportunities your data-mining efforts generate.
While 93% of respondents to the Urban Science study expressed some concern with an entirely online purchase process, more than two-thirds said they were comfortable shopping online, signing paperwork digitally, and negotiating price and terms via email, chat, or phone.
Recently, the individual leading the digital drive for one of the largest privately-owned dealer groups in the United States addressed DealerSocket employees over a Zoom call. He talked about COVID-19’s impact, inventory shortages, the group’s efforts to build that clicks-to-bricks experience, and how consumers still need to be educated on what digital retailing is. What caught my attention was his response to whether he believed consumers still want the showroom experience.
“Absolutely … Only a small group of individuals want the Carvana model, and we’re going to be there,” he said. “But most customers want to step foot in a brick-and-mortar shop. If they want to get their payment, we’ll do that and meet them in the showroom.
“So, we believe a critical point in that process is that showroom experience,” he added. “You shouldn’t lose a customer who completed things online because you told them it would take 45 minutes, but it takes us three hours.”
It happens at every dealership. You’ve invested time and money reconditioning a vehicle that seemed perfect for your lot. Thirty days becomes 45, 45 days becomes 60, and, finally, it becomes clear this car has to go.
Do you sell the vehicle at auction and incur transportation costs, auction fees, and possibly wholesale losses? What if your frontline-ready car is purchased by a competitor and sold at a profit?
If your store is part of a dealership group, the best and most profitable solution is to give that aged or unwanted unit another run at a sister store’s lot. By trading within your dealership group — a process known as group trade — you’re able to reduce wholesale loss, save on auction fees, keep core inventory within your group, and drive additional overall group revenue. In this article, we’ll outline best practices for running group trade for operations of all sizes.
Select a Moderator
There are multiple ways to set up group trade. We recommend a model that organizes all your group’s used-car managers and general managers weekly. Having this regular cadence keeps your trade desks at one to two hours. We suggest scheduling them on Mondays at 9 a.m. or 10 a.m., so trading ends before the dealerships get busy.
We recommend you assign a nonbiased individual, such as the group’s used-car director, to manage and moderate the bidding. This person will also need the authority to make decisions, especially when it comes to settling disputes. Think of this individual as your group trade project manager, because you need someone to keep all your managers and GMs on track.
Trade Desk Preparation
Each week, managers must compile a list of vehicles they plan to make available during the trade desk. Every group has its standards, but we recommend sending any unit that’s been on the lot for 45 days or longer.
Vehicles listed should be reconditioned and priced correctly before the trade desk. Cosmetic and mechanical problems are often the reason frontline-ready vehicles go to auction. Requiring that vehicles listed for trade are in good condition also helps instill trust. We’ve seen it happen before: A vehicle traded to a sister store requires reconditioning that wasn’t disclosed. The point here is you need to set ground rules to which all participants are held accountable.
As for pricing, vehicles should be priced to current market conditions. That means vehicles that haven’t received a recent price update shouldn’t be offered for trade.
Also make sure vehicles listed for trade have clear, detailed interior and exterior photos, as well as full book-out information. Remember, transparency is key. Like customers, your fellow manager at a sister store won’t purchase a car without photos, as vehicle images often help identify problems or explain why a vehicle didn’t sell.
Knowing that aged vehicles will be offered to sister stores encourages used-car managers to be more vigilant during trade walks, and when monitoring and adjusting retail prices to market fluctuations, and making sure vehicles have been booked out accurately.
Make sure your moderator diligently manages the trade desk timeline. By Saturday night, all vehicle lists should be submitted to the moderator. By Sunday, have your moderator compile all vehicles available in trade desk. Managers can look at the list Sunday and prepare to bid by Monday’s call.
Used-car folks love to bargain. That’s why they’re in the business. Help managers understand they will get great vehicles if they give great vehicles — i.e., “You give me a break on this car, and I’ll give you a break on that car.” That’s a win-win for the group. Encourage managers to collaborate and cut deals, but make sure every deal goes through the group trade desk.
The following are other trade desk strategies you can implement:
To keep all managers engaged until the sale ends, sell vehicles based on age, not by store. That disburses each dealership’s vehicles throughout the sale, making it easier to keep managers engaged as they wait to bid on or sell a vehicle.
Make faster decisions about a vehicle’s fate; they don’t get better with age.
Used-car managers should be prepared to talk up their vehicles — via conference call — when they are featured.
The bidding should be done in increments of $250 and limited to one minute per vehicle.
Keep things moving and discourage managers from getting attached to off-brand vehicles. That’s especially important if the vehicle is valued at $10,000 or more, or a sister store of the same franchise brand can sell it as a certified or noncertified pre-owned vehicle.
A vehicle should only be traded once within the group. A vehicle that sits 60 days at one dealership and another 60 days at a sister store needs to go.
Urge managers to be proactive and search for group trade desk opportunities. For example, take notice whenever a sister store appraises a trade. DealerSocket’s Inventory+ software has a feature called Group Trade, which will notify you by email or text whenever a store within the group takes in a trade. If that vehicle fits your core inventory profile, monitor it. If it hits the 45-day mark, let the store’s used-car manager know you’d like to have it. Conversely, if you have a car that isn’t right for your store, contact a sister store’s used-car manager to see if he or she is interested.
Group Trade enables dealerships to run weekly reports that show data such as the trade desk’s closing ratio, pending appraisals, preliminary photos taken, book outs, and percentage of core vehicles in inventory. It can also track the age of units in inventory.
Above the obvious benefits, group trade promotes camaraderie among colleagues who work for the same company but may not know one another. Our team has seen group trade foster brainstorming, collaboration, and increased morale, and decreased turnover.
New data from DealerSocket’s Inventory+ team reveals that dealers are betting on a high degree of pent-up demand when markets open up.
By Gregory Arroyo
Field reports from DealerSocket’s team of Strategic Growth Managers reveal that dealers haven’t pushed the panic button just yet. Their focus is on the high degree of pent-up demand they believe rests on the other side of the industry’s recovery from the COVID-19 pandemic, and the chance to pick up market share when markets begin to open up.
A Strategic Growth Manager operating in the Sacramento, Calif., area noted that dealers benefited from the way things came to a halt quickly vs. a slow drip. That allowed them to make inventory and staffing decisions through March, as well as seek expense relief from their floorplan finance sources and technology vendors.
For dealers with closed showrooms or stores operating with limited staff due to strict social distancing guidelines, there was little time to delve into emerging sales trends they had not experimented with before the pandemic. In a lot of cases, management teams handled appointments and sales in the absence of sales staff.
DealerSocket’s Strategic Growth Managers report many learnings and process refinements at dealerships, especially for operations that had tested remote sales and digital retailing.
By the Numbers (National):
Total appraisals fall 34.4% from the first week of March to the first week of April.
Total appraisals register steepest week-over-week dip the week of March 16 (-20%), with Trade (involving consumer trade-ins) and Purchase (involving auction/wholesale vehicles) appraisals falling 26% and 35%, respectively.
Appraisals initiated by consumers through online forms hold steady through the period after inching down 2% the week of March 16.
Purchase appraisals record a 182% week-over-week spike the week of April 20, three days after auto sales deemed essential by the U.S. Department of Homeland Security.
Trade appraisals show a 34.3% increase over a three-week span ending the week of April 20.
In terms of pre-owned inventory, Strategic Growth Managers operating in the Northeast report that some dealer groups were able to squeeze in trade desks just before stay-at-home orders took effect. Multi-state dealers on the East Coast were also able to reshuffle inventory out of areas with strict sales guidelines.
Beyond that, there’s wasn’t much to do with respect to managing inventory, aside from updating vehicle listing and other merchandising activities.
Virtual auctions reported strong attendance in March. The problem was, dealers weren’t buying, with KAR Auction Services reporting an 84% decline in volume for virtual sales nationwide. And with the physical auctions closed and big dealer groups not buying, the firm reported a 12% decline in wholesale values — 15% if adjusted for fewer lower-priced trade-ins.
“We have heard repeatedly from dealers … about their hesitancy to put a value on a trade-in that is not part of their core inventory,” Black Book stated in a recent report, adding that dealers are hesitant to get stuck with vehicles they don’t traditionally stock in a depreciating market.
Data from DealerSocket’s Inventory+ team shows a 20% week-over-week decline in total appraisals the week of March 16, when most stay-at-home orders took effect. Trade appraisals, or appraisals that occur on a customer’s trade-in, were down 26% during the same period, while “Purchase Appraisals” on wholesale and auction units plunged by 35%, according to the data.
Overall, appraisals were down 34.4% from the first week of March to the first week of April. However, activity has trended up since.
Markets In Recovery
As of the week of April 19, according to J.D. Power, nearly all markets are in recovery or exhibiting growth, as dealers adapt and selling regulations are clarified.
DealerSocket data also reveals a pick-up in activity, with appraisals spiking the Monday following April 17. That’s when the U.S. Department of Homeland Security deemed auto sales an essential service. Much of that lift, however, was from dealers appraising wholesale and auction vehicles, which increased 182% from the week prior.
DealerSocket’s data also revealed an uptick in consumer activity, with appraisals on consumer trade-ins increasing 34.3% during the first three weeks of April. Even more compelling is appraisals initiated by consumers through online lead forms remained steady throughout the period after inching down 2% on a week-over-week basis the week of March 16.
A snapshot of website traffic by DealerSocket’s DealerFire team also reveals a normalization of online consumer behavior, with organic traffic climbing 15% to 20% over the 10-day period ending on April 24. Dealerships located in states that allowed showrooms to remain open saw a sharper overall rebound. In contrast, dealers in states with a high number of COVID-19 cases continued to experience significant declines in site traffic.
However, those dealers are now starting to see increases, with consumers returning to more normal browsing behavior. “In both cases, traffic has rebounded in the past week,” read DealerFire’s April 24 Digital Marketing blog. “But in Texas, the traffic has already come back to very near pre-COVID numbers.”
Leads have also been trending upward, with DealerFire data revealing that dealers in areas less affected by COVID-19 are now seeing numbers equal or within striking distance of pre-COVID-19 trends. Even dealers in heavily impacted areas are seeing an uptick in lead submissions.
Late Models a Concern
On the retail side, dealers continue to hold the line in terms of their asking price for the Top 50 makes and models, which inched down 3% from the week of Feb. 16-29 to the week of April 14-20, according to DealerSocket data. However, there is evidence dealers are willing to meet customer demands, with the data revealing some front-end gross erosion. Still, dealers have lowered their selling price just 1% during the period. Days’ supply, however, was up 718%.
The immediate concern is aging, especially if the expected feeding frenzy never materializes. If it does, throw aging out the window, said on Strategic Growth Manager in the Northeast, as dealers will be able to demand higher gross profits. There are exceptions, however.
Current model-year and one-year-old pre-owned vehicles could be problematic, as automakers continue throwing big rebates, deferred payment programs, and other incentives on the hoods of new models. So far, according to J.D. Power, incentives remained at a record level of $4,700 per unit during the week of April 19, which could be enough to pull pre-owned buyers to new-vehicle lots.
Lease extensions permitted in March could also hamper the values of late-model units, with many of those off-lease vehicles expected to hit the market by the end of April.
As for profit drivers, the belief is the potential lies in three-, four-, and five-year-old vehicles, especially with the deadline for filing federal income taxes extended to July 15 and the IRS drowning in unopened tax refund requests.
That’s why dealers are holding onto inventory, as they know availability will be critical. The big question is just how quickly things will come back, especially given that the used-car guides typically take 14 to 30 days to adjust.
The good news is many of the challenges dealers experienced during the Great Recession have yet to materialize. For instance, the national average for a gallon of gas, according to the latest data from AAA, has dropped 48 cents in the last month to $1.883 — the cheapest in more than four years. During the height of the Great Recession, the national average peaked at $4.10 a gallon.
That might explain why trucks and SUVs dominate DealerSocket’s Top 10 pre-owned sales lists for all regions except the South (See Charts). In fact, J.D. Power called the pickup segment the most resilient in the industry in a recent report. Recovery in the SUV segments is also gaining steam.
Also absent is the credit tightening seen during the last recession, with J.D. Power noting that finance sources have greeted record transaction prices — the average reaching a new high of $35,800 during the week of April 15 — by approving higher loan-to-value ratios across the full spectrum.
“Consumers in all credit categories are purchasing and financing more expensive vehicles,” the firm stated in its report, adding that a higher percentage of buyers are also financing “more than the value of their vehicles relative to historical levels.”
There are looming signs on the horizon, however. As reported by Automotive News, Ally Financial Inc. told investors during a recent call that 15% of its auto-loan customers have asked for payment deferrals. And of the 1.1 million borrowers who requested forbearance, 70% had never had a late payment.
Automotive News also reported on April 21 that Credit Acceptance Corp., which specializes in financing credit-challenged buyers, warned of a sharp drop in payments. The firm was among the first to report an uptick in delinquencies, the publication noted.
In terms of most-likely and worst-case scenarios, Black Book projects a 25% drop in new-vehicle sales if unemployment jumps to 10%, as well as a 17% drop in wholesale values compared to pre-COVID projections, with some recovery in the fall. The firm’s worst-case scenario has new-vehicle sales and wholesale values falling by 40% and 25%, respectively.
Consumer confidence and unemployment filings will be critical indicators in the weeks and months ahead, with KAR Chief Economist Tom Kontos noting that values should improve once new filings dip from the millions to pre-pandemic averages of about 250,000 claims per week. While he doesn’t expect wholesale values to fall 20% below seasonal averages, he warns it could be close.
J.D. Power put 2020 retail sales at between 11.3 and 12.5 million and total sales at between 12.7 and 14.5 million vs. its baseline of 16.8 million. The firm also projects that the virus could eliminate between one million and 1.7 million sales between March and July.
As for dealers, the big unknown is pricing, which means transactional data will be a critical guide as they navigate the recovery. Their physical inventory should be their No. 1 priority, as well as their virtual showrooms. Vehicles need to be cleaned, and merchandising activities need to be kicked into high gear. That means updating photos and vehicle descriptions, as well as refining their digital marketing and data mining strategies to get eyes on their inventory.
We continue to think about all of you, our customers and partners, during this difficult time. This pandemic has caused deep challenges across our industry and for all of us, and I hope you know that DealerSocket continues to be here for our dealers. Our goal has been to strike the right balance between being prepared for our dealers and the market when our industry recovers and offering discounts to help our dealers as much as possible during this difficult time.
We will get through this, and we will get through this together. We are committed to fighting through this with you. We are beginning to see the first signs of positive trends as we climb out of the depths of the COVID-19 pandemic, and this has us all hopeful for the future.
In April, we heavily discounted our software for our dealers. In addition to our discounts in April, we have decided to offer the following DealerSocket billing reductions for May for all of our dealers:
25% off DealerSocket CRM
25% off RevenueRadar, our data and equity mining tool (see note below)
50% off Car Wars
25% off Inventory+
25% off DealerFire websites and PrecisePrice digital retail (see note below)
15% off IDMS
15% off Auto/Mate DMS
We have already sent out our May invoices, so next week you will receive a credit memo for the above discounts. With that said, similar to our discount package last month, there are some basic qualifying terms listed below.
In addition to these discounts in April and May, DealerSocket continues to offer our customers several promotions and free months of certain software products to help you navigate this crisis. Our offers include promotions for:
Precise Price digital retailing
Inventory+ Absolute Sourcing and New Car functionality
Delivery Test Drive Scheduler
Digital Credit Application
Auto/Mate Remote eDeal
Since we are adding promotions and various resources for dealers often, please view DealerSocket’s latest information by clicking here, and, as always, please feel free to reach out to your Customer Success Manager with any questions or if we can help in any way:
If you are not yet an Auto/Mate DMS customer, I hope you know that we can reduce your DMS bill significantly during these challenging times as well as into the future by switching to Auto/Mate DMS. We have several bundled packages that include our Auto/Mate DMS product combined with other DealerSocket products to support you.
Thank you for partnering with DealerSocket. I hope you know how much we value and appreciate your loyalty, partnership, and your business.
I wish you, your families, and your team members health in these unprecedented times.
CEO and President
Details regarding our COVID-19 relief package:
The fee reductions above represent discounts to the monthly subscription amounts by DealerSocket and not third-party products and fees such as DMS integration fees, books fees, and other transactional fees.The discounts above apply to customers that are current with their DealerSocket account.
Note: OEM programs for websites, equity mining, and digital retailing offerings will be subject to working through OEM partners.
With threat actors working overtime, DealerSocket’s head of information security offers three tips to keep your dealership’s and your customers’ data protected.
By Gregory Arroyo
Greg Tatum has a warning for dealerships everywhere: Cyber threat actors are working overtime. Noting a definite uptick in suspicious activity since COVID-19 hit Europe in late February, he adds:
“Threat actors are actively searching for new targets through a number of different mediums. Things like social media platforms are a very popular target for information gathering that can be used in an attack.”
Tatum serves as DealerSocket’s head of information security. He joined DealerSocket nearly four years ago from a security services firm that works with companies in much more sensitive environments than automotive. I’m talking about healthcare and government contractors, sectors that see billions of attacks each year. So, yeah, we have the right guy on the job.
“DealerSocket spends a considerable amount of effort protecting our customers’ data,” he notes. “It’s part of what we do just to make sure our customers’ customers’ data is protected.”
Tatum isn’t the only one sounding the alarm. The FBI issued its own warning on March 20, noting that scammers are leveraging the COVID-19 pandemic to steal money, personal information, or both.
Just last week, the National Automobile Dealers Association reported that attackers are now putting up COVID-19-related websites that prompt visitors to download an application to receive COVID-19 updates. But you don’t need to download the app, as the site installs a malicious binary file as you contemplate whether you should.
The attack method uses AZORult, software that originated in Russia approximately four years ago to steal data and infect the breached computer with malware.
Tatum also alerted me to a new phishing campaign that pretends to be from a local hospital notifying recipients that they have been exposed to the Coronavirus and they need to be tested.
But it’s not just phishing and ransomware attacks. Business email compromise, or BEC, is also on the rise. That’s when a cyberthief breaks into a legitimate corporate email account and impersonates an employee to get the business, its partners, or other employees to send money or sensitive data to the attacker.
“In this climate we live in today, this is part of business,” Tatum says. “This is part of what we have to deal with as consumers of technology.”
Tatum, by the way, is available to help. He advises DealerSocket customers to contact their Customer Success Managers to get connected. In the meantime, he offers the following four tips to safeguard your organization and your customers’ data:
1. Stay Committed to General Security Awareness
The following is general security etiquette your teams should employ:
Use strong, unique passwords for every account.
Update software and enable automatic updates where available
Think before you click
Remain skeptical of all requests for sensitive information
Use a VPN connection whenever possible to ensure secure data transmissions
Shred or destroy confidential documents before discarding
2. Separate Work and Personal Data
Use company-issued computers and mobile devices for work purposes only. If you don’t have a company-issued device, be sure to check your company’s policies about using personal devices to access your organization’s data or networks.
Additionally, consider creating separate user accounts. Never use your work email for personal reasons or vice-versa. This segregation helps the company maintain the confidentiality of the data it collects and helps you maintain your privacy.
3. Secure Your Home Network
Update your router’s username and password immediately and use a strong, unique password. And never use the same password for your network and your router. Note that most routers ship with default login credentials that are public knowledge.
4. Don’t Forget About Physical Security
The comfort of your own home is no reason to forget about physical security. Simple acts like keeping doors locked and not leaving mobile devices unattended in a vehicle are non-technical ways to improve security.
Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at email@example.com.
In times like today, winning and doing more appraisals is critically important. Industry veteran lays out a four-step process for doing just that.
By Frank Scott
Trade-in appraisals are a boon to both new- and used-vehicle sales and a great way to acquire core used-car inventory without paying auction and transportation fees. And all it takes is saying the following to every customer who drives onto your lot:
“Hey, I see you drove up in that Dodge Charger (or whatever). We’re looking for used cars. Do you mind if we do an appraisal?”
Some salespeople might shy away from making that statement because they feel it adds yet another layer to negotiations, but they shouldn’t. Here are four steps to help you craft a comprehensive appraisal strategy and trade-in mindset that will yield positive results at your dealership.
Step 1: Create the Process
Make it part of your dealership’s culture to ask every sales and service customer whether you can appraise their vehicle. And make sure to record those interactions in your CRM. Additionally, make sure your customers accompany your appraisers as they inspect their vehicles. Here’s why:
Customers are super honest about their cars and will tell your appraiser things that can help him or her make informed decisions about a vehicle’s value. For instance, a vehicle history report may show an “accident.” Was is a fender-bender or a major collision? Let your customer give you those details.
Appraising a vehicle represents a great time to explain the process and factors that affect a vehicle’s value, such as accidents, mileage, the condition, the existence of a transferrable service contract, or even a missing set of keys.
While you’re at it, share how you calculate appraisal values and whether you use guidebooks such as Kelley Blue Book or NADA Guides. Explain that you take into account the dealership’s transaction history with vehicles of a similar make, model, and condition. Also mention that you can solicit bids from your dealership network or wholesalers.
Step 2: Determine the Value
The first question your appraisers need to answer is whether the vehicle they’re evaluating is a retail or wholesale piece. If it’s wholesale, get the car’s book value — Manheim Market Report, Black Book, or Kelly Blue Book — and add or subtract from that value based on the vehicle’s history, condition, and other things that affect its price.
If it’s a retail piece, the following to-do list can help calculate its appraisal value:
Gather transaction data to determine how much similar cars sold for at your dealership, in your group, and in your market over the prior 90 days. Inventory+, DealerSocket’s inventory management tool, can help by serving up actual vehicle transaction prices — even by vehicle trim level — and profit margins. The advantage of using Inventory+ is that it uses predictive algorithms based on real transaction data, not online prices.
Check out the prices of similar cars listed for sale in your market area, which is typically within 100 miles of your dealership. Again, DealerSocket can help. Inventory+’s TrueTarget tool aggregates listing data from third-party websites like Cars.com, et cetera. Then DealerSocket’s TrueScore system, another feature within Inventory+, assigns individual vehicles a score based on that vehicle make’s sales performance at your dealership or in your market.
Use book values, but make sure you’re on the same page as your customer. Chances are, your customer has already consulted KBB.com or NADA.com to figure out what the trade is worth. Make sure they tell you which source they used, so your appraisal is neither too low nor too high from the values they viewed. In other words, idiot-proof yourself.
Combine all of the above, and you should have enough information to determine the car’s appraisal price.
Step 3: Justify Your Price
You’ve settled on an amount. Now you have to convince your customer it’s a reasonable price. Here’s what you need to show your customer:
List items (tires, accidents, smoke odor, et cetera) that need to be replaced, repaired, serviced, or addressed — along with the dollar value of each item — to make the vehicle retail-ready.
Print out the book value and listings of similar vehicles from the internet.
Having backed out reconditioning costs, make out a check to the customer in the amount of the appraised price.
There’s no guarantee your customers will agree with your appraisal, but they may be more understanding if you say something like: “We love your car, but we are in the business to make a little bit of money, and this is the best we can do on your car.” That statement may even get them to say, “Yeah, I do need tires; I see where you’re coming from.” The key is to justify your appraisal.
Step 4: Check the Metrics
So you’ve improved your appraisal numbers, but are you winning enough appraisals? And what should your appraisal closing ratio be? Here are a couple of stats most dealerships monitor to get those answers:
The number of appraisals you do should equal 150% of your new- and used-car sales. In other words, for every 100 new and used cars you sell, you should do 150 appraisals. If you’re way below that, you’re not conducting enough appraisals.
A solid appraisal closing ratio is in the low 40% range.
During Times Like Today
With car sales expected to plunge during the COVID-19 pandemic, dealers undoubtedly can use all the help they can get. One major advantage of using Inventory+ to assist with appraisals is that its vehicle price data are based on real transaction data, not internet listings.
Remember, it’s dangerous to base your prices on just what the market listings are saying. That’s because some dealers could panic, drop their online price, and then send that car to auction. And you won’t know whether the price you see online represents a car sold at retail or one sent to auction. Following internet prices can be misleading and cause other dealers to panic as well, so don’t be part of the problem.
Frank Scott has been in the automotive industry for over 17 years and currently serves as a Senior Customer Success Manager at DealerSocket.
In all great moments of history when everything seemed bleak and that the bad times would never end, they did. The question is, will you be prepared?
By Patrick Mendoza
I’m not going to sugarcoat this: The current situation is bad, and it’s going to get worse.
You’ve heard this a hundred times the past couple of weeks, but these truly are unprecedented times. I’ve never seen such a drop in both the stock market and consumer purchasing, and such a rise in unemployment and concern.
That’s bad. But you know what, this won’t last forever.
In all great moments of history when everything seemed bleak and that the bad times would never end, they did. The title of this post is “Hard Times Come Again No More,” which is the name of a sad song the soldiers used to march to in the Civil War. Think about how bad everything seemed then: brother vs. brother, the United States ripped apart with no hope of reconciliation. But guess what, we did, and we were stronger than ever.
It’s dark now, and, as King George VI said on the eve of World War II, “There may be dark days ahead,” but the industry will be back, and I think it will be back quickly.
Before long, customers will be back. Showrooms will turn their lights on again, and sales will rise.
The question is, will you be ready?
The downtime is your time to make sure you have everything in place for when the good times return. Do you have all of your customers and prospects in your CRM? Are you using a useful data mining tool to help you attract your customers back to your store? After all, it’s cheaper to retain an existing customer than attract a new one. What about your inventory? Are you stocking the most profitable vehicles for your lot?
Now, more than ever, it is your opportunity to be ready for when the people come back.
If you haven’t, or if you’re not sure, operators are standing by. It never hurts to call us and see if you’re ready. We’d love to help you.
Patrick Mendoza serves as director of corp. communications for DealerSocket, Inc. Email him at firstname.lastname@example.org.
The Kansas City dealer group is hoping the digital steps it’s taken through the years will sustain demand through the COVID-19 pandemic.
By Gregory Arroyo
Pictured is the showroom of Soave Automotive Group’s Mercedes-Benz of Kansas City, Mo.
Soave Automotive Group, a multi-rooftop operation serving the greater Kansas City area, was off to a solid year, with sales and service profitability outpacing 2019 through February and no sign of that momentum wavering. That was before local health officials delivered two COVID-19-related orders within a period of six days.
The first, which ordered the closure of all social venues like bars and restaurants on March 17, left Kristopher Nielsen unfazed. As Soave’s eCommerce and customer experience manager, he was on the line that day with DealerFire’s design team to get the group’s response to the Coronavirus pandemic online and out to its markets.
“We have no plans to scale back our ad budget,” Nielsen said. “We’re not going to have a knee-jerk reaction. I think there are real opportunities to gain market share in this difficult situation.”
Ready for Anything
The forward-thinking steps the group has taken over the years to button up its operations and virtual presence was the reason for Nielsen’s optimism. He felt especially positive about the integration between the group’s DealerFire websites and DealerSocket’s CRM.
The connection allows him to see how many website visitors a campaign generates, which vehicles they look at, time on site, and then alerts his teams when those customers return — critical capabilities in the weeks ahead.
Nielsen also feels good about the group’s online service scheduling and fully online purchase process, which had generated robust engagement in the 90 days prior to his call with DealerFire. The newest addition to Soave’s websites is DealerFire’s test-drive delivery scheduler, which Nielsen added as part of the provider’s 100-day free use offer.
All three shopper experiences would get calls to action on the landing pages he wanted DealerFire to build to house the group’s COVID-19 response. The main message was that Soave Automotive’s dealerships were open and ready to help.
Promoting those landing pages would be an email campaign, press release, announcement bars on the group’s homepages, and the same SEO content strategy Soave had perfected since partnering with DealerFire in 2010. “The biggest thing for us is checking in on customers and orders coming in,” Nielsen said. “We’re contacting customers reaching the end of their leases. They’re going to need a car regardless of what’s going on in the world.”
Stay the Course
Soave was closing out a lighter than usual but still productive weekend when the second health order was issued. This time, all non-essential businesses were ordered to close on March 24 to stem the spread of the virus, which has infected more than 700 people in the Kansas City area. Dealership service departments could remain open, but sales were limited to appointment-only.
Nielsen said the shoppers who visited his group’s showroom that weekend were especially motivated to buy. Online traffic remained relatively stable, but lead and contact volume declined. Service capacity also declined, as customers opted against non-critical repairs.
Pictured is one of the COVID-19 landing pages DealerFire created for Soave Automotive.
“We’re actually still on track with last year, but January and February were very strong,” Nielsen said. “We’re now going to give back some of those gains.”
As for inventory, Nielsen said the group is keeping in touch with manufacturers as production shuts down. The group wasn’t concerned about being oversupplied, Nielsen noting that Soave has enough vehicles on the ground to get through April.
“A rising tide lifts all boats. Only when the tide goes out do you discover who’s been swimming naked,” Nielsen said. “We recognize that all we can control is how we react. So we’re trying to stay positive and plan as best as we can for where things may go.”
The business has navigated unprecedented hardships before, and DealerSocket’s First Pencil blog believes there’s no reason it won’t do it again.
By Gregory Arroyo
Remember the period between late 2007 and 2009, when the housing crash that caused the credit crisis led to the Great Recession? The market was tough to read, and the used-car guides were all over the map.
Dealers that bulked up on big trucks and SUVs were stuck with a lot full of them, as gas prices reached $4 a gallon and finance sources tightened up. Any car buyer with below-prime credit couldn’t get approved, as banks weren’t sure where car buyers — particularly those with investment properties — would land and finance companies were dead in the water.
The good news right now is we’re not experiencing any of those market dynamics. But news surrounding COVID-19 (a.k.a. the Coronavirus) has certainly heated up in recent days.
Hearing about Tom Hanks was disconcerting. So was hearing about the National Basketball Association’s decision to suspend the season, after Utah Jazz center Rudy Gobert became the first major professional athlete to test positive for the virus. Now his teammate, star Donovan Mitchell, has tested positive.
As of March 10, there have been at least 116,000 coronavirus cases worldwide. About 64,000 people have recovered, and 4,000 have died. Here in the United States, multiple states are under a state of emergency.
With all that said, the one thing I love about this business is how opposed it is to doom-and-gloom talk. In fact, just yesterday, the founder of a car dealer Facebook group I belong to urged all admins not to allow panic to take over the group.
“I don’t want negative talk about this affecting us,” he wrote.
It made me think of this great line from the first Avengers movie: “Until such time as the world ends, we will act as though it intends to spin on.”
Hey, consumers who need a new car (or used) today will still need it tomorrow. Still, it’s not business as usual, so preparation is vital.
So, if you’ve loaded up with inventory the past couple of months to take advantage of tax season, monitoring aging will be key. And if you’re part of a group that engages in group trading, it’s time to dig into your inventory management systems to ensure vehicles are on the right lots. It’s not time to panic, but you should have exit plans in place.
I recall a story told to me back in 2009. A dealer in the Northeast took on a bulk of pickups in trades just before things got bad. Having dumped $5,000 to $7,000 into the vehicles, he refused to take a loss at auction when things did — even though he was losing money each day those vehicles sat on his lot. His patience was rewarded, however, as he ended up grossing $2,000 to $5,000 by waiting out the storm for a couple of months. Americans do love their trucks and SUVs.
You also need to fire up that CRM. Hey, you know you have customers reaching the end of their finance, lease, or warranty term. Vehicles also need to be serviced. Maybe it’s an excellent time to offer free service pickup and return.
And if you’re a dealer that dipped your toe in the digital retail waters — or maybe offer test-drive deliveries — today’s uncertainty represents an opportunity to really test those strategies.
So, start promoting those customer conveniences, and make sure your digital retail button stands out. In other words, remove any conflicting calls to action on your vehicle details and dedicated landing pages. Banner promotions on your search results pages and VDPs are a must.
Now, when it comes to your employees, I suggest not sticking your head in the sand. Management teams need to get educated on this virus, and communication will be critical. Care also needs to be taken when it comes to the cleanliness of your showroom, employee offices, and common areas.
With all that said, here’s what I do know in all this uncertainty: Every time this business faces a severe hardship, it always seems to come out the other side a better industry. I’m sure that will be the case once again.
Gregory Arroyo is the former editor of “F&I and Showroom” and “Auto Dealer Today” magazines. He now serves as senior manager of strategic content for DealerSocket. Email him at email@example.com.
Two industry veterans share their five-point plan for pricing pre-owned inventory to attract more eyeballs and achieve your sales and profit goals.
It takes skill, technology, and a keen eye focused on sales and prices at your dealership and in your market to yield desired profit margins when pricing pre-owned inventory, say Winston Harrell and Nick Oakley.
As two dealership veterans who now serve as strategic-growth managers for inventory at DealerSocket, they combine their expertise to present strategies, practices, and tips to help calculate prices for your online inventory that will attract eyeballs and foot traffic to meet your dealership’s sales and profit goals.
Tip No. 1: Price at the Point of Acquisition
Have a pricing strategy at the point of acquisition; in other words, know how a vehicle fits into your dealership’s marketing plan and your market, and know the vehicle’s best price, Harrell says.
Post the vehicle for sale online four or five days after it is acquired as a trade-in but before its reconditioned. An inventory management tool, such as DealerSocket’s Inventory+ mobile app, puts the power to do just that in the hands of appraisers.
Using the tool, you can scan a vehicle identification number to verify a vehicle’s equipment, obtains its invoice price, and ensures it is properly stocked. Inventory+’s mobile app can also be used to take preliminary photos.
Certification — which calls for reconditioning, a warranty, and a retail price premium when comparing noncertified vehicles of similar make, model, and mileage — matters. “If I don’t have the margin for it, I may not certify that vehicle,” Oakley says. “I wouldn’t price a non-CPO vehicle against a CPO vehicle. Those are the things we look at when pricing vehicles.”
Tip No. 2: Price Similar Vehicles in “Brackets”
That means vehicles of a similar make and model should be further categorized and priced to compete based on attributes such as trim level, optional equipment, or whether it’s certified, Oakley says.
Take a late-model midsize sedan of a specific brand. Many of those vehicles in the market are mid- or upper-midtrim-level vehicles missing certain optional equipment, such as sunroofs and navigation systems.
“I’ll know those vehicles typically come from a rental company,” Oakley says, “and the market is flooded with them, which typically drives the price down. “When looking at those cars that have specific features that rental-car companies usually don’t buy — navigation, sunroofs — I bracket that as nonrental. I know that vehicle is more valuable, so I will price it differently.”
A vehicle priced lower than other vehicles of like make, model, and mileage doesn’t necessarily sell faster or better than its peers. Neither does one that is priced significantly higher, Harrell and Oakley note. “Vehicles need to be priced accurately, so a customer doesn’t think there’s something wrong with it,” Oakley says.
Still, shoppers are going to look for price first, Harrell adds. So having some attention-grabbing product with less content and a lower price that also fits the dealership’s business model “is always a very good strategy to have,” he says.
Tip No. 3: Know Thy Market, its Radius, and What Affects It
Know your dealership’s marketing radius and your nearest competitors. For example, dealerships in rural areas might have customers who are willing to drive three hours to buy a car, but consumers in major metropolitan areas won’t travel more than 30 minutes to a dealership.
Inventory+ by DealerSocket can set a market radius unique to each vehicle. A Ford dealer located in a metropolitan area that sets a market radius for a mainstream F-150 XLT for, say, 25 miles could set the radius for a high-performance, low-availability F-150 Raptor at, say, 100 miles, because “people are willing to travel that distance for that vehicle,” Harrell says.
“Seasonal” vehicles should be priced to sell at certain times. For example, in the northwestern part of the country, convertibles don’t sell well in winter versus summer, when drivers want to drop the top. Therefore, I wouldn’t keep as many convertibles in stock from October to April as they are unlikely to sell. It would be ideal to price this vehicle to sell as fast as possible if October is approaching, Oakley says.
Price your vehicles to appear on the first page of a search engine. “I don’t need to be No. 1 in those engines because 90% of the time, customers don’t just look at a top car,” Oakley says. “They’ll look at the first page or page and a half before they move on.”
Tip No. 4: Employ an Inventory Management Tool that Provides Historical Transactional Data
Know what you can sell and when you can sell it for the most profit. If you lack historical pricing and sales information in your inventory tool, you’d have to do it yourself by extracting data from your dealership management system, “and it’s not really set up for that,” Harrell says.
Inventory+ offers a pricing report that can help, filtering sales by make, model, age, and more. It also serves up historical data such as:
The number of vehicles of a particular make and model in a market;
The prices of those vehicles;
A dealership’s sales and price performance with specific vehicles and the vehicles’ market values at the times they were sold;
The vehicles’ book values; and
The number of those vehicles the dealership wholesaled, the wholesale prices and whether a loss was incurred on those units.
“So I have those factors I need to make an intelligent decision,” Harrell says.
Tip No. 5: Have a Pricing Strategy for Aging Inventory
Some dealerships engage in aged pricing — also known as turn pricing — meaning that an unsold vehicle’s price is reduced at set intervals as it ages.
Set standards for how long you will keep a vehicle before reducing its price, Oakley says. “I price a newly acquired vehicle a little higher than I normally would to maximize my profitability on that unit,” he explains. “But after 60 days or 45 days, I’ve held onto that vehicle for a really long time, and maybe I want to get rid of it by day 90. Then I need to start lowering its price, so when people search online and see it, they say, ‘Hey, this is a great deal.’ ”
Pay attention to book values when reducing the price of aged inventory. “If I’m not taking into consideration what the market is doing and changes in book value, I may reduce the price by, say, 2%, but that book value may have changed by 3%,” Harrell says. “Now, I’m in the position of, yes, somebody wants to buy the car, but I can’t get it financed at that amount.”
Nine times out of 10, a core vehicle will sell for a higher price than its going market price. Two industry veterans provide a three-step process for stocking your lot with core inventory.
By Robert Cowan and Sandy Davis
We know that turning and burning through inventory won’t get you to your profit goals, because successfully managing inventory requires a delicate balance between cost of goods, profitability, and, yes, how quickly you can sell it. We call it the Ideal Inventory Model™, an approach designed to help you stock core inventory — or vehicles that deliver above-average grosses in below-average turn times.
There are many ways to determine your dealership’s inventory, and there are plenty of software tools that can help. In this article, we’ll walk through a proven process for stocking core vehicles.
Step 1: Determine Your Core
The reason you need to identify your dealership’s core inventory is, nine times out of 10, a core vehicle will sell for a higher price than what it’s going for in the market. Nonluxury dealerships, both import and domestic, generally operate best when core vehicles account for 45% to 55% of their preowned inventory.
The Ideal Inventory Model (IIM) is the backbone of Inventory+ and how we determine core at DealerSocket. It looks at your sales history to determine if a vehicle would be a profit driver at your unique dealership, and not just a market performer. Each vehicle will receive a score, or TrueScore, on how it performs at your dealership or in your market. If you’ve never sold a car similar to that, predictive algorithms will pull similar vehicle transactions to help you make a data-driven decision.
It’s important to not rely solely on live market data because other dealers in the same region are getting the same recommendations, which increases wholesale costs for the same vehicle. That often leads to those profit-squeezing, race-to-the-bottom pricing wars. The advantage to using Inventory+ is its algorithms are constantly updating as transaction data flows in daily. That allows the tool to look for areas of improvement when developing your store’s customizable buy/sell list, which the system links to matching available vehicles (such as missed appraisals, in group trades, or auctions).
To determine your core, we focus on profit per day – or vehicles that drive you profit while turning within your desired time frame. It’s important to be able to identify if a vehicle is core or not to your dealership at all stages within a vehicle lifecycle: acquisition to disposition.
Step 2: Acquire Profit Drivers
When acquiring a car, Inventory+ will let you know right away if it’s a profit driver for your lot with TrueScore. Each car on your lot has two TrueScore metrics: one for how the vehicle will perform at your dealership, and one for how that vehicle performs in the market. Both scores are measured on a five-point scale.
Your dealership score is based on your store’s transactional history, while your market score indicates how well the vehicle performs in your local market. The reason why that’s important is some vehicles may perform differently at your store than in your local market, while others might not be profit drivers at your dealership but are high market performers. Your market score is also important when you have no transactional history on a particular unit.
Now, an average car will have a score of about 2.5, while a high-performer will have a score of three or higher. TrueScore also provides the vehicle’s profit per day, average turn time, how it ranks against similar vehicles your dealership sold in the last 30 days, average sales price compared to the market, and much more.
We recommend sourcing vehicles from trade ins, missed appraisals that slipped through the cracks, in group trades, or auctions. While acquiring cars from these sources, you’ll want to make sure your dealership’s TrueScore is at least a 2.5.
When working an appraisal, simply plug in the vehicle identification number into Inventory+’s Single Page Appraisal. The system will immediately extract transaction data from the DMS to provide stocking and pricing recommendations, or the vehicle’s TrueScore. Based on this score, you’ll immediately know if the car will be a profit driver, or loss to your dealership.
As you look to buy cars, refer to your buy/sell list. The stocking recommendations are the result of our Ideal Inventory Model, so you’ll see exactly which cars you need to stock to drive profit per day. You can filter by how many vehicles you already have in stock, filter by your dealership score, market score, cost, profit opportunity, and more. Once you know which cars to purchase, you can source those vehicles directly through Inventory+.
Step 3: Know Your Exit Strategy
You should determine your exit strategy in two places: as soon as a car is in the appraisal process and during reviews of existing inventory (every 10 or so days) to determine any vehicles that have yet to turn.
Remember, as you’re appraising a car, if it’s TrueScore is under 2.5, it’s probably best to get rid of that car before trying your hand at selling it. If a trade in will not be profitable at your dealership, make sure to be transparent and manage a customers expectations. On an ongoing basis, you should use your inventory manager tool to review how your existing inventory is performing. It’s a good idea to pull up the vehicle’s market data every 10 days after it has been traded to see how it differs from the data used at the time of the appraisal. This step will tell you if you need to adjust your pricing up or down.
Your buy/sell will also recommend vehicles to sell, based on unique dealerships performance. If you determine a vehicle needs to be disposed, you can easily trade within your group or launch it to auction from Inventory+.
Finding inventory core to your unique dealership is important. It will allow you to sell vehicles profitably, while maintaining turn. We recommend finding a solution that helps you aggregate your dealerships performance so you’re not relying solely on instinct or market performers to stock your lot.
Robert Cowan serves as a Senior Customer Success Manager for DealerSocket and has been in the automotive industry for 42 years and consulting with Inventory+ for 14 years. Sandy Davis has been in the automotive industry for 22 years and serves as one of the company’s Strategic Growth Managers.