All the underperforming used car dealers I speak to have one thing in common: they don’t know they are actually running a casino.
If you have cars sitting on your lot too long, or worse, you are turning over your inventory, but your profit isn’t reflecting the amount of work it takes to do so, it’s time to start running your lot like the casino it is.
It all starts with recognizing the car you sell isn’t as valuable as the spot it is parked. A casino manager doesn’t just fill the floor with slot machines, they recognize the value of each chair and make sure the machine in front of it is as profitable as possible. Likewise, as a dealer, the long-term health of your business depends on your ability to identify which vehicles are most profitable to you.
At DealerSocket, we don’t simply look at the speed and frequency of inventory turnover, we track profit per day – the profit made on each car sold, divided by the number of days it took to sell. Knowing profit per day allows dealers to build better processes for aging and pricing strategy.
For example, a car that sells for $2,000 in 20 days and a car that sells for $1,000 in 10 days have the same profit per day, but the second car gives us two more at-bats in finance, and potentially two more at-bats with trade-in.
To learn more about profit per day and inventory strategy from a DealerSocket professional, request a demo below. We would love to connect with you.