When you own or manage a car dealership, whether selling new or used vehicles, one of the most important factors in the company's success is having the right inventory and managing it effectively. Failing to control inventory is why many dealerships go broke and have to be sold or closed down.
To give yourself the best chance of business success, follow these various tips to stay on track and keep product moving.
Know the Market
To keep inventory stores low, you need to know the market. Get to know who the prime target customer is for each kind of vehicle you sell and understand what consumers are looking for in each type of car, whether sedan, convertible, SUV, sports car or other. Learn, too, what's popular when it comes to things like car colors, trims, and upgrades.
Check out online reports, keyword analysis, and other data to educate yourself. Stay up to date on all the latest trends, too. Plus, become knowledgeable about price points. Customers have a huge amount of information at their fingertips and do their own research online and in magazines etc. They know the value of the vehicles they're interested in, and won't fall for overpriced extras or supposed deals that would rip them off.
Using the market data you compile will help you write effective listings for your vehicles. Once you understand what consumers are looking for, you can include all the relevant details in vehicle descriptions and capture buyer attention ASAP. Don't skimp on the details. Many people like to know all the ins and outs of a vehicle's statistics before they bother going to look at it in person.
Update listings if the price changes or if you decide to add free upgrades or alter the vehicle in any way. Also, ensure descriptions are easy to understand. Write clearly, leave enough white space that ads don't look cluttered, and have someone else proofread the advertisements for errors. Be transparent in your pricing, too. Don't put misleading numbers on listings just to get people in the door, as doing so will backfire in the end.
You must also include quality photographs of your vehicles. Use more than one. Showcase the cars from many angles on the outside, and also include at least one or two pictures of the inside of the vehicle to give shoppers a clear indication of its state.
Be Clear on Your Buying Strategies
Another tip is to create some clear buying strategies for your dealership. Know the types of vehicles you concentrate on stocking, which you know you have a market for. It pays to create a niche so you can target certain types of customers and cater to their needs, rather than trying to please everyone but impressing no one. For instance, you might be a dealer who only sells new vehicles from a particular few manufacturers, or you could specialize in selling second-hand sports cars or cars suited to families.
Sourcing the right vehicles at the right price is also key. Have a clear strategy in mind when buying inventory, so you maximize profitability. Set rules for yourself about things like how often and where you will acquire new stock, what types of trade-ins you'll take or if you'll buy at auction, and the minimum condition or number of miles on vehicles you'll accept. Create a checklist that you and colleagues can follow to ensure adherence to these standards and strategies. Doing this will help ensure you don't end up with too many bad buys that you can't offload at a decent profit.
Thankfully, dealers have a helping hand in inventory management now due to the availability of affordable technology software. The latest dealership management systems, such as the offering from Zurich Connected Cars, can do things such as sync with inventory tools, company websites, and customer relationship management systems.
Helpful software ensures you always know what inventory you have, its location at any given time, the price you paid and the current list price, where it's advertised for sale, who has it out for a test drive, and so much more. Programs come with customizable tools and support inventory, admin, sales, and marketing processes, resulting in faster vehicle turnaround times.
Many tech tools also come with mobile compatibility, meaning you can access information from anywhere. They reduce workload and make it easier for various team members to manage different aspects of inventory.
Running a car dealership provides many opportunities for success, but there are also many challenges to overcome. Inventory management is a prime one, so follow the steps listed above to help you and your team keep moving stock quickly and at adequate profit levels.