Are you keeping meticulous track of every new and used vehicle on your lot? If not, you should be. Cars are among the most expensive purchases most people make — second only to real estate — and with such a wealth of options available in terms of color, features, make, and model, car buyers aren’t inclined to compromise when they make a buying decision. They want exactly what they want, and many of them arrive at the dealership with a specific year, make, and model in mind. You need to know whether you have that car in stock, and be ready to show it to them.
Proper inventory management can help you meet the needs of your market more efficiently, keep your overhead costs down, and bring in more profit per car. That’s increasingly important as dealership profit margins shrink. You need the latest automotive inventory management tools and software at your disposal. You also need to stay mindful of aging inventory, keep the right mix of cars on your lot, source your new inventory wisely and know exactly what you have on the lot at all times.
Use the Latest Technology
Aging, outdated inventory management systems and software can hold you back from managing your inventory successfully. You need the latest in automotive inventory management tools. Modern automotive inventory management solutions are more comprehensive than ever, offering integrative systems that can reduce your management workload by syncing with CRM systems and websites. Mobile compatibility for your inventory management system is also a must-have these days when more people are using mobile devices than desktop or laptop computers, and dealers and managers increasingly need to be able to manage their automotive inventory on the fly, from anywhere.
Always Know What You Have in the Lot
One good reason to update your auto inventory management tools, if you haven’t already, is so you can keep a closer eye on what you have on the lot and where it is. RFID-beacon-enabled inventory management tools let you know exactly where each car is on your lot, and what cars you have.
Regular analysis of your inventory will help you streamline your turn cycle to identify when it’s best to acquire a new vehicle, and what timeline you should set for selling it and getting it off the lot. Analyzing your inventory data can also help you nail down pricing within your market for different makes and models. All of this data will be much easier to clean and take advantage of when you have the right automotive inventory management tools.
Don’t Let Cars Stagnate on Your Lot
Cars depreciate with age, so the longer a car sits on your lot, the less valuable it becomes, and the more your profit margin on that vehicle shrinks. Dealers are already facing shrinking profit margins — the National Automobile Dealers Association (NADA) has reported that, between 2009 and 2014, the percentage of car sales prices representing gross profits declined 31 percent for new cars and 20 percent for used cars. Letting cars age on your lot is just throwing money away.
Automotive inventory management software can help you track factors like how often a car is test-driven or how many similar cars have been sold and for what price, so you can take the right steps to get aging vehicles off your lot and into the driveways and garages of customers. If you sell used cars, a strong strategy is to make those small fixes to correct issues that turn customers off. Got a broken door handle, a trunk that won’t pop, or a window that doesn’t roll down? Put in the time and investment to spruce up used cars a little to make them more appealing to buyers. You can raise the price of the car accordingly.
Source New Inventory Wisely
You need a solid strategy for sourcing new inventory, in order to maximize your dealership’s profitability. Your past sales metrics hold insights into what buyers in your market want, so start there. Develop a strategy for how often and where to buy new inventory, how much to pay for it, and how to make decisions regarding trade-ins and what to do with them. Trade-ins can be a great way to source new cars for your inventory, but you have to be sure that there’s a market demand for that car before you accept it. Even cars in good shape won’t sell if nobody wants them. And while auctions can be a great way to source new inventory, online auctions can be cheaper and easier than in-person sales.
The better you manage your automotive inventory, the more successful your dealership will be. These days, when profit margins for dealers are falling, it’s more important than ever to make your inventory work for you. Luckily, with today’s tools and technology at your disposal, managing your automotive inventory will be easier than you could imagine.