There are many different strategies for just about everything we do in the auto industry, from the front of the building to the back. With so many industry experts in the consulting world with so much tenure in dealership management teams and countless technology companies on the market, one thing always holds true: your DNA (Dealership’s Natural Ability) is more important today than ever before. There’s some great technology out there, each with its own special sauce, but no other solution pulls everything together like DealerSocket’s Inventory+.
So let’s discuss why DNA is so important and why our dealer partners using Inventory+ hold a key advantage over those who don’t. Each store, regardless of the manufacturer it represents, has its own “natural ability” to outperform the market with certain pre-owned vehicles. They sell a particular vehicle faster, in volume, and for more gross profit than their competitors. Unfortunately in some cases, their competitors outperform them with certain vehicles regardless of the technology they use.
Inventory+ provides dealers with the transactional data from each vehicle they sold and from the market, building their ideal inventory model. You no longer have to guess how you’ve performed on gross profit and turn times. And you don’t have to rely solely on internet listings and market day supply.
Our competitors just don’t provide that same data. They tell dealers that the sales history straight from their DMS is not important! Instead, they provide links to the Manheim Market Reports and wholesale book data. But those are transactional data too. If someone tells you transactional data isn’t important, it just means they don’t have it.
Now let’s examine the danger of managing inventory without transactional data as we move into a market that will soon be overstocked with vehicles. Take the parts department and how a stock order is completed. Without getting too detailed, I’ll tell you how it’s not done. A parts manager doesn’t just guess what he needs to order. He doesn’t walk the dark aisles looking for empty shelves, ordering what he needs to fill those spots. He has a system that tells him what’s in stock, how fast he sells that stock, the ROI that stock provides when sold, and the amount of stock to order to keep up with the sales cycle. It’s not guesswork; it’s all about the DNA.
Why should you treat the pre-owned department any different? Now, I’m not suggesting that you stock only what your DNA suggests. We do provide dealers the opportunity to understand exactly what’s hot in the market and what’s not, so they can grow their business. Without transactional data from the market, it’s just a guessing game.
Ask your current provider if it supplies your specific DMS transactional data. Ask if it can provide transactional data from the market. Stop guessing and start leveraging!
K.C. Loughlin is sales director for Inventory+, the industry’s most comprehensive inventory management solution. With an automotive industry career spanning more than 30 years, he’s gone from parts, service, F&I, and front-end sales to used car inventory management and working the auto auction circuit for his own franchise import store. Over the last eight years, he has specialized in inventory management solutions and best practices, and has been a featured speaker at state association roundtables and conferences across the country.