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Car Auction Dealer Software Wholesale Lot

Wholesalers back in My Dealership? Dealer Auction Software

Wholesales in my dealership

Dealer Auction Software that helps save auction fees & avoid the major pitfalls of wholesaling.

Just because at times retail customers are disruptive and even bounce checks, would you shut down your dealership? Of course not, instead you would put controls in place to prevent future issues.

We kicked out wholesalersBut for some reason, dealer principles were advised at their 20 groups and at conferences to kick wholesalers out of their dealerships. Dealers were told that wholesalers were disruptive and were bribing our used car managers. That their checks bounced and that the only way to prevent all of this was to kick them out, once and for all.

While these issues did happen at times, it was the exception. Unfortunately we tend to remember the extremes. In my experience, the wholesalers and independents I have meant over they years, while sometimes rough around the edges, are solid hard working business people. They are the core behind what makes our industry tick.

It seems crazy to me that we have excluded them from our dealership, sort of like the proverbial, throwing the baby out with the bath water.

Think about it. If you found a way to control the check issue, the back room deals and the disruption. Your dealership could save hundreds of dollars per car in auction fees and transport fees. The best part is your manager isn’t away from your dealership, missing TO’s and coaching opportunities with your sales consultants.

Is a Dealer Held Auction the Answer?

In this article you will learn many of the basics of running your own dealer auction and welcoming profitable, fee free wholesale transactions back into your dealer group. You will learn how to prevent most of the pitfalls and above all how to stay organized using dealer auction software, so you can focus on profit.

The Dealer Auction Study

My partners and I conducted a one year study of dealer run auctions and private dealer bid sales. We visited dealer auctions that have achieved 95%+ sell rates on a weekly basis, even in the dead of winter. We have seen it all from complete “Red Light AS IS” auctions to dealers that recondition every car that goes through their lane. We learned quickly the advantages of using dealer auction software and running online versus physical and picked up some of the best practices along the way. The following is a small portion of that study.

Magic 10 steps? No such thing.

I am not trying to say that it as easy as just 10 steps, just like magic you can run your own dealer auction. Not at all, this is just a 10 step primer to help you understand what will be expected. I recommend that you speak with other dealers who are running their own auction or call companies like ours, who specialize in helping dealers run an accountable profitable and successful auction.

So what are the steps to starting your own dealer wholesale auction?

Retail lot or wholesale row sign1. Merchandise your wholesale cars as vigorously as your retail. For many dealerships there are two kinds of trades: Cars we’re going to keep and cars we are going to sell at auction. Traditionally we process them differently. What if you merchandise wholesale cars as expertly as you do your retail cars, then offer them to your local and national wholesalers and independent dealers online. Do you think you could sell a bunch of those cars before you have to take them to auction? Of course, and because you don’t pay fees or transportation you avoid expenses and above all make more on profit.


2. Process your wholesale car using the same tools your inventory team are already using.
No need to reinvent the wheel here, just have your IM’s (inventory managers) use the same tool they use to process retail trades. This way they are not overwhelmed with too much change. Companies such as vAuto, Red Bumper, DealerTrack and Vin-solutions already have a special category for wholesale where you can add photos and descriptions. Then you can feed the inventory to your wholesale website or to a wholesale marketplace like Auction Simplified

Wholesale Photos focus on flaws3. Focus on the flaws not the cheese. Wholesalers are very different from retail buyers. All they want is the basics of the car and photos of the flaws and a well thought out condition report. So merchandising for wholesale can be quite a bit easier. You don’t have to take 40-60 photos or write a Shakespearean level description, instead keep it to the basics.
My partner Dave Kaiser, explains it like this:

“Take 10-15 ‘Get to know me’ photos then take photos of the rust spots or missing items. If there is a special feature such as AWD or Navigation that is not normally on that vehicle, go ahead and photo it as well.”

In most cases 15-20 photos and a condition report will get the job done. Some dealers write out a condition report and scan it as a photo of the car or use the free condition report built into Auction Simplified. It only takes 5-7 minutes per car to complete. As Dave says over and over again. “Point out the issues on the car so the bidder can make a serious bidding decision.”

4. Put your wholesale cars ONLINE the as soon as possible.

Cars have 48 hours to be onlineApplying the Dale Pollak, Velocity retail approach to wholesale, makes the most sense. If you can get a list of your wholesale cars in front of hundreds of buyers the day they arrive. Then list them on your wholesale marketplace for hundreds of used car dealers to see. And get all of this accomplished On Day One or within 48 hours at the latest, you should turn your inventory faster than if you wait for the next auction especially if you are waiting for decent lane numbers. Again this is just one more tool in your digital marketing plan. Not every car will sell this way. That is why I still think off site auctions are useful as a secondary strategy to your successful dealer run auction.

One extra benefit of having your cars on an auction platform, is your dealer auction will be listed by other wholesale tools such as Autoniq .

5. Hold an inspection period. SOLUTION TO AUCTION PITFALL #1

To avoid wholesalers showing up at random times, hold a regularly scheduled inspection time. This will allow buyers to visit in a controlled area at a specific time. Have a mature lot attendant there with keys and to offer help and allow them to drive the cars if they like (on their dealer plate of course.) This builds value and improves wholesaler relationships over time. You will find that the wholesalers will pay more when they can trust the dealer and will sometimes buy from start to finish online. Not every wholesaler will buy online. Some feel they still need to touch and feel the car, that is why I recommend a viewing or inspection period.

Auction Inspection Day

Hold your inspection period at a time that is convenient to the buyers in your area, for example, don’t have it at the same time as other auctions in your market. This way more buyers will be available to view your cars.

6. Certified Checks or Floor Plan only. SOLUTION TO AUCTION PITFALL #2

certified-used-carsAt first, it is critical to establish your auction rules. We recommend that you only accept certified checks unless you have an established relationship with the wholesaler. At minimum hold the title paperwork until their check clears.

You might think that buyers would be upset with this but in my experience they are usually so glad to be back in the dealership and avoiding huge auction fees that they understand the reasoning and will work with you at first.

As your auction takes off, you will be able to invite in floor plan companies as well. This way the money is EFT directly into your wholesale account with reduced risk. CFO’s love EFT from floor plan companies.

7. No one should know your bidders until the end, including the manager. SOLUTION TO AUCTION PITFALL #3

Use software that hides the bidders until the end. True accountability and tracking is a key security measure to prevent bribes and backroom deals. Software like Auction Simplified are great for this because they allow buyers to bid completely online. It has one truly unique feature, no one knows who the bidder is until they win. All bids are truly anonymous. This way there is no risk of those back room kick backs, because know one knows who bid. I admit it, that was a shameless plug for the company I co-founded, but it solves the biggest issue with wholesaling direct; accountability.

back room deals with wholesalers

TIP: If you are aware of a trouble buyer or you don’t want a buyer at your auction, you can block them from seeing your cars online.

This works especially well with competitors. Lets face it you don’t want them seeing your trades. Again not something easily done if you take the car to off site auctions.

8. Merchandise to your wholesalers.

bdcIf you spend a little effort on making your wholesalers feel welcome, by providing donuts and coffee or pizza and wraps at lunch time, they will come back each week and make your viewing day part of their schedule.

I recommend that your BDC includes 25-50 calls per week in their action plan to invite wholesalers to your weekly events.

Sending form letter invitations and post cards periodically to remind independents and wholesalers about your online marketplace is also recommended.. Many successful dealers run specialty sales when they have a glut of similar trades, like trucks. The call would sound like this:

“You’re invited to our wholesale lot for a very unique truck auction this Thursday at 9am-3pm, final bids by 4pm online. Lunch is noon, we hope you can join us.”

9. Staff Appropriately

It is not terribly expensive to staff your auction appropriately and it is money well spent. Be organized on your inspection day, have an extra lot attendant managing the car keys so you can focus on the important things. When your auction ends have appropriate billing staff and cashiers ready to bill the transactions. Try to have everything billed for pickup the next day and be ready for a rush billing for non local dealers.

1Titles to trades0. Priority Cashiering.

Pick a location for the wholesalers to cash out, it can be a managers desk but it works better if it is a cashiers window. With a little training and rule setting, cashiers become terrific gatekeepers for auction transactions. As your auction takes off consider having a special cashier just for wholesale transactions, sort of a priority window, so the wholesalers feel important. Because in my view they are.

In conclusion. If you gain trust, show concern and respect and make wholesalers and indy’s feel welcome they will pay more for your wholesale cars. If you don’t have to ship your car, pay auction fees or have to send a manager off site for the day, you’ll make more money wholesaling cars.

If you can turn a $500 car into a $700 car that’s a 40% profit. It is next to impossible to make 40% on most of your retail used cars.

Digital marketing for wholesale cars is long over due.

Resources

If you are ready to start your own dealer auction and wholesale marketplace, call our team or myself directly at 877-877-4511 or visit dealersimplified.com for more information and strategy guides.

Categories
Business Development Car Auction Dealer Software Wholesale Lot

It’s Time for Digital Marketing for Wholesales Cars

If your dealership survived the recession of 2007-08, you understand the value of Digital Marketing for Retail and the importance of getting your cars online fast.

You probably have all the latest and greatest tools for selling cars to the retail public, the best pricing tools, beautiful SEO efficient websites and the latest apps.

You insure your retail inventory is online by day 3 at the latest. We have all become, what I call, “Online Dealers with Local Delivery”

This leads me to the following questions:

  • Wholesale Cars online Day 1Isn’t time to do the same for wholesale?
  • Why is it OK to wait a week or two before selling our trades at auction but we require our managers to have our retails on-line in three days?
  • Why do we not digitally marketing our wholesale inventory to our wholesalers on day one?
  • Why did we kick the wholesalers and independent buyers out of our stores? (Don’t jump to conclusions on this one, really think about it, because it is the root cause of some wholesale loss.)
  • Why do we send our prime wholesale money makers to off site auctions only to give up profits to fees, transportation and travel time.?
  • Why do we pay those sellers fees at all, even negotiated fees still add up?
  • Why is it ok to pay for shipping? And if it is free, who is actually paying?
  • Why don’t we run our own wholesale auction?
  • Why not digitally market your Wholesale Inventory?

Take a 22 minute meeting with us and we will show you how!

Call me now 716-818-4444 (my cell phone) or 877-877-4511 touch 1 for sales.
You have nothing to lose, its free to sellers (no fees, no software expense whatsoever.)  One dealer we spoke to said he “averaged $312 more per car at his private bid sale” Is it time you took a hard look at that profit center

Kevin Leigh
Co-Founder
Dealer Simplified, LLC

Categories
Car Auction Wholesale Lot

How to Spot Ghost Bidders and What Can Be Done About Them?

Maybe you have not heard of the term Ghost bidders before. It is a phantom bidder that unscrupulous auctioneers use to bid against you at a used car auction. Learn how to spot them and how to take advantage of the ghost bidder problem.

Fake, AKA. Ghost bidding is not condoned by any auction association because it is a shady way to increase bids, but it does happen from time to time. Sometimes even the person rep-ing the car is the person tricking the auctioneer into thinking there is a bidder.

In this short video I explain the problem and have a few suggestions as to how to deal with it.

 

Categories
Car Auction Retail Car Lot Wholesale Lot

10 Sites You Shouldn’t Ignore when Sourcing Used Cars

Used Car DealerIf you have been in the car business for any length of time you have faced the dilemma of how to buy used cars. Do I go to auctions? Do I visit private dealers? At Auction Simplified we think you need to be always looking for cars and visiting every venue.

 

hemmings

10. Hemmings

This site is often overlooked by car dealers because they cater mostly to Collectors. But sometimes there are gems hidden in the listings from people that consider their cars to be collectable. Used Mustangs for example or even that oddity you need to fill a customer order. Additionally, if you need old parts, Hemmings is the place to start. To buy used cars from Hemmings, go to www.hemmings.com

bring a trailer

9. Bring a Trailer

If you’re looking for something cool and old, from a rusty Pinto project cars to perfectly restored Camaro, Bring a Trailer is where you want to go. To quote their site; “There is no need to keep sifting through hundreds of hopeless projects or overpriced dealer inventories to find that one car you’ve been looking for. We pick the winners and save you the trouble… the best bargains, the best dream cars, and the best rarities.” To buy used cars from Bring a Trailer, go to bringatrailer.com

autotrader logo8 AutoTrader.com

One thing that is great about AutoTrader is that you can search the nation in a second. So if you are looking for that hard to find specific car, AT is your best bet. Links to Carfax and Kelly Blue Book straight from the site are all plusses. Not everyone likes AutoTrader because of its heavy advertising and because their listings tend to attract people who severely overvalue their cars. However, AutoTrader does have an excellent search function, letting you make searches for things like “manual transmission + two wheel drive + four cylinder engine” and gives you a variety of similar cars across different years and makes.  To buy used cars from AutoTrader go to www.autotrader.com

auto tempest7. AutoTempest

It’s great because it allows you to shop all the major used car sites at once. It’s like those cross-shopping flight search sites, but for cars. To buy used cars from AutoTempest go to AutoTempest.com

carfax logo6. Carfax

Most buyers don’t realize that Carfax has a rather robust used car listing filled with great inventory, much of it wholesale. This is because many dealers have opted to pay flat rate for Carfax and they allow the cars to show up as an additional service. You get the added bonus of a free Carfax report, cool huh? To buy used cars from Carfax, go to www.carfax.com/cars-for-sale

kijiji5. (Canada Only) kijiji.ca

Even if you live in the US there are ways to get cars across the border, so I threw this one in for our US dealers. Canadian dealers have been using Kijiji.ca for years. Great cars for sale and a good user interface makes it like Craigslist but better. It’s also owned by eBay. By the way Kijiji means “village” in Swahili. To buy used cars from KiJiJi go to www.kijiji.ca

4. Auction Simplified

I also recommend our own wholesale marketplace, Auction Simplified (shameless plug) because it is free for sellers to use and the buy fee is so small. It offers a turnkey “Make and Offer” style buy center that feeds from their existing inventory software. More and more dealers are using the platform to buy and sell used cars.  Go to AuctionSimplified.com and register.

Cars.com-Logo3. Cars.com

Similar to Autotrader but with less of the commercialism, cars.com is great especially on their mobile app. Cars.com has a clear user interface and  a great search function. Because of their lower cost as compared to AT they attract more independent car dealers and small used car lots, so they will often have almost all the cars in a particular town listed. They also allow for national search which is really helpful when looking for a bargain if you are not afraid to travel. To buy used cars from Cars go to www.cars.com

eBay-Motors-Logo-no-border2. Ebay motors

It harder to find a great deal yourself because of the national exposure, but eBay Motors is generally more reliable and easier to deal with than Craigslist. It’s also good when you already know what you want, and if you’re looking for something very specific. To buy used cars from eBay, go to www.eBaymotors.com

Use a robot bidding tool like bidnapper.com as it can really make a difference in winning the bid because it bids hyper fast on your behalf at the end.
Kevin Leigh, Dealer Simplified
Kevin Leigh

craigslist-logo-transparent1. CraigsList

You get some weird crap thrown in, so be careful not to surf craigslist while kids are around, but nothing can beat Craigslist when it comes to local listings. The search function is not the most specific, alright it actually stinks, but their are mobile apps that make things a lot easier. To buy used cars from Craigs List, go to www.craigslist.com

The trick with CL is to looks a lot further down the page, because you may not realize that it is actually a chronological list and sometimes the honey is at the bottom of the pot.
Kevin Leigh, Dealer Simplified
Kevin Leigh

UPDATE 8.12.14:

Dealer Auction SoftwareNow that Auction Simplified has launched, we also recommend our software (shameless plug) for Dealers to find, buy or sell wholesale cars. Go to AuctionSimplified.com and register.

Categories
Car Auction

Title Attached – Why it costs you money.

Profit loss missing titlesQuick Answer:

We Think You Should AVOID  Selling a Vehicle “Title Attached”.

A third less buyers and the remaining buyers pay less.

Lets use an example of a $8000 car. If you sell it at auction “Title Attached” 33% less buyers will consider the car, and the average bid will be $250 to $700 less. So net proceeds will be approximately $7300-$7750.

If you waited the 10 days until the lien release or title showed up, you would pay 10 days of extra floor plan.

Lets say your floor plan rate is 10% or .000273785 per $ per day. So in other words $8000 time .000273785 or $2.19 per day in floor plan

Which would you prefer?

$250-700 in loss at auction. OR $21.90 in floor plan and pick up the true value of the car.

 

Detailed Answer:

Title Attached/Missing/Lien Definition

What is the difference between “Title attached”, “Title Missing”, “Lien Release Missing”

 

Title Attached. New dealers/wholesalers are often confused about what “Title Attached” means.  It actually means that the title is NOT present at the time of the sale. This means the selling dealer has the title but it is not on hand at the time of the auction, usually at another dealership billing location.

 

Title missing. The dealer does not have a title in their possession. Usually they are still waiting for the customer to bring it in or they ordered a duplicate title from the DMV and are waiting for the title.

Lien Release Missing. The dealer has paid off the lien and is waiting for the bank to send the release.

Do I Get Less Bidders If The Title is Missing?

Yes. According to a study we conducted in August of 2014, dealers and wholesaler said that about 33% of dealers will avoid bidding on title attached cars because “It is a pain to deal with”.

Some dealers said they are working on fast turn around of inventory, because of this, title attached is not allowed by their owners. “We follow the vAuto philosophy of more turns per year (roughly 13-14 per annum), so title attached is a pain because you never know how long its going to take to get your title.”

One dealer told us that the “Big boys never buy title attached, because they have unlimited funds so they wait for the right cars.” Another said, “When we started only sending cars to auction with full title, we saw a 20% decrease in No Sales and a  higher average wholesale profit.”

Will I lose Profit if Title is not ready at Time of Auction?

Yes. Most bidders will pay less for a vehicle if the title is attached. One large dealer buyer told us that he pays between $250 to $700 less for “Title Attached” vehicles depending on the price. “The more money I am floating because of missing titles the more it costs. So I adjust my bid accordingly.” The only exception to this rule is for junk cars under $500.

The second reason you profit less on title attached units is because you have less bidders as mentioned above. Less shots on goal = less chance of a winning high bidder.

Can I Sell My Car if The Title is Missing.

We are not attorney’s, so we called our local NYS DMV and the person on the other end laughed when we asked the question. Her response was an  emphatic “NO.”

“You must have complete legal ownership of the vehicle before you have the right to sell it. The only exception is vehicles older than 1972 where titles did not exist for the most part. We know dealers sell vehicles with missing paperwork all the time but they shouldn’t because they technically don’t own the vehicle until they have a clear signed title with no liens on it and a signed mileage statement. ”

Is the Seller still Liable if The Title is Not in their possession?

There are many vicarious liability cases that have been won against selling dealers who did not complete their paperwork correctly or did not secure full ownership of the vehicle before they sold it. Again check with your attorney and or DMV before you consider selling a car without full ownership.

Recap:

The original intent of “Title Attached” at traditional auctions was to allow dealers to still sell cars at auction if they forgot to bring the titles with them. In most cases they needed to have the title the next day or the deal would be cancelled. It should not be used as a way to float money if you don’t have legal possession of the vehicle.

 

Categories
Car Auction Retail Car Lot

With VDP’s A Photo is worth a 1,000 words.

photo-nophoto
Your Car is Dead in the Water if you don’t have photos

Your Dealer Website is a Photo Visual Experience

When it comes to selling cars online, quality photos are the highest return actively I can think of. Would you use a dating website if there were no photos, I think not? Think about it, a web site by its nature is a visual experience, so if you have no visuals of the car, you are quite literally dead in the water.

How Many Photo’s is too Many?

Today customers expect photos and lots of them. Now you can see some dealers adding 50 or 60 photos to their online showroom. While that may seam like a lot and it is, some cars need that many pics to off show all the options. Your customers may not look at all of them but for the few extra minutes it will take you why not have them there.  At a bare minimum, I recommend 15  as this will allow you to show off most features but if you want to truly represent the car you will need 24-30 because it will give your customer a good virtual tour of the car.

Use a Photo Template for Your Photographers.

Along with the number of photos you take,  having a consistent look is important. Start by putting together a templet showing how you want the layout to flow. First photo, second photo, third photo… It’s all most like building a burger at a fast food restaurant, step one is… step two is… and so on.

Don’t Skimp on the Camera.

Now that you have picked the layout the next thing to do is get a good digital camera. There are hundreds of cameras to choose from, make sure you get one that lets you change the pixels, a common size is 1024×768. While you don’t need a $3000 Nikon -, I would tell you to get a better than average one. Remember you are going to take a lot of pictures with it and you don’t want to be buying a cheap camera every month. Plus the photos that come from a good camera look a whole lot nicer. We use a Nikon COOLPIX L810 16.1 MP Digital Camera with 26x Zoom , at the $170 price point, has all the features and durability without a huge learning curve.

Shop Your Site as if You are a Customer.

As you can see from looking at other dealers websites everyone has found some kind of flow or process to add photos to their cars. A best practice is to have someone in the dealership look at the website each day just like the customers do. Remember this is your digital showroom and it needs to stand tall. Bad photos, dirty cars, crumpled up white paper mats, other dealers plate frames are all little things that can drive customers away. You would never put cars like that inside the building where 20 people a day will see it, why would you want them online where 20,000 will see them.

Best Practice, a Photo Booth.

Taking good photos of the cars you intend to sell will increase your leads and keep customers coming back to your website. Keep your photo area or booth clean and free from clutter, set up good lighting and use a proper camera. Remember the car is the star, have it fill the frame and take your time.

Categories
Car Auction Retail Car Lot Wholesale Lot

Where Can Dealers Find Cars for under $10,000

Find the Best Cars at $10,000 or less

Buying cars under 10000One of the hardest tasks for car dealers is the stock quality used cars for under $10,000. If you have ever been given this assignment by your owner or GM you understand the pain this can cause you. I wish I had any easy solution for this but I guess if it was easy everyone would do it. The good news is that cars under $10,000 are often searched 100 times more than any other priced car. That means if you can nail this you will open the floodgates to new leads.

So where do you start looking for cars under $10,000. The most common answer is “head to the auction”. Although going to the auction to stock your used car lot is a necessary evil it can’t be your only go to move. This is where we separate the people that make things happen from the ones that watch things happen and even more from the ones that say “what just happened”.

Finding new avenues like your service drive can pay big dividends when you are sourcing for cars under $10,000. The best way to work the service department is to add a sales team right in the service lane. However if you don’t have the right staff for that or if you’re just not ready to make that commitment you need to get some help from your service department. Once you get service on board that having a customer trade their car over repairing it makes more sense, since they will most likely do the repairs anyway everyone wins.

Another way to obtain less expensive used cars for your retail lot is from private sellers. What is interesting about this approach is it can be used for both obtaining inventory and generating new leads, if someone is selling their car they may be looking to replace it. Similar to using your service drive this works best if you have staff dedicated to contacting these customers.

This process can be very time consuming, you may have to comb through lot’s of cars before you find one that fits your used car stocking profile. Even with all the work that needs to go into buying from a private seller, getting two or three of these cars a week could be a big win for some dealers.

If you don’t think you will have the time or staffing to consistently source for these cars, you may want to enlist the help of some local wholesalers buying and selling cars in your market. Most of them will have a steady stream of less expensive cars they buy from new car dealers. It only takes a few good car buyers (wholesalers) to help you get your lots full of those hard to find under $10,000 cars.

 

Categories
Car Auction Retail Car Lot Wholesale Lot

Used Car Profit Hacks

When it comes to used car profit, dealers constantly consider the resale value of their inventory. Having a profitable, well maintained inventory can make a huge difference when it comes the speed in which you turn your used car lot.
Here are some simple tips on how to increase the value of your Used Car Inventory.

Wash Your CarsCleanliness Matters

Keeping your cars clean isn’t just for cosmetic appeal, it can seriously affect your cars value. As a percentage of profit improvement, a clean car has the most impact on value for the least amount of expense.
All plastic should be treated with a quality cleaner and protectant, and the carpets should be vacuumed to the point where you can actually see the lines the vacuum made. Get your detail shop a carpet rake, to really make the carpets look awesome.

Hidden garbage under the seats or in map pockets can cost you a sale. Make sure your detailers are looking everywhere and even vacuuming under the seats, trunk and map pockets.

Clean door jams make a real difference as well, have them wiped down and silicone the hinges.

Detail the engine and trunk, clean out their jams as well and be sure there are no signs of oil leaks whenever possible.

Freshen your Inventory often

cars with hoods openOne of the biggest mistakes dealers make is they don’t freshen their inventory weekly. I make it the lot person’s (porter/inventory managers) daily job. They should be flagging 2-5 cars a day to refresh.

Minor Modifications

Sometimes the smallest little details make your cars look so much better and in many cases add profit at a 2:1 ratio. When I was younger I made a living buying cheep cars with rips in the seats and dash boards. I would add seat covers and a minor patch kit for the cracks, then turn around and re-auction the car at a tremendous profit.
Simple things like spray painting the wheel wells black or silvering the end of an exhaust have amazing impact on curb appeal.

Adding Accessories

Some dealers like to add accessories, such as alarms. In my opinion the return is only equal to the value of the added item and in some cases lowers your SRP’s because it sometimes raises the price pass your competitors. Another side effect of adding the accessory in advance is you tend to give it away, instead of selling them at a profit

Minor Bodywork

Mobile paint technician’s are a used car manager’s best friend. These companies will come to your used car lot and can remove scratches and small dents without the hassle of taking your car to a repairer or body shop. They can also treat your car with an extra clear coat, giving the paint a new lease on life and providing added protection against chips and scratches.

When you have your own body shop you can fall into the trap of wanting to paint every minor dent. Dent removal without painting is the better way to go. Again its cost to profit ratio is as much a 4:1
Kevin Leigh, Dealer Simplified
Kevin Leigh

Story Book

One of the most important things you can do to increase the value of your cars is to keep a “story book” which includes such items as:

  • Printed Carfax
  • List of Work Already Preformed on the Car
  • Printed List of Reviews on the Car from Edmunds or Cars.com
  • Printed List of Standard and Added Options
  • Original Mileage statement
  • Warranties Available

Salespeople that show the storybook upfront are far more likely to get top dollar than salespeople that wait until the customer asks for the Carfax.

Categories
Car Auction Retail Car Lot Wholesale Lot

How to Stock Used Cars Customers Want to Buy.

& How to Stock Used Cars Salespeople Will Sell!

Buying Used Cars For Your Lot is Easy:

Buying used cars is easy
Lots of Rental Cars Out There

Stocking your used car lot is easy, Right? You can load up on as many cars your lot will hold, fill every spot and you could have it done today. The auctions are loaded with all kinds of cars. Sounds pretty good right but only if you like silver, white or tan x-rentals. Just because something is easy doesn’t mean you should do it. Putting cars on your lot just to fill it up can cost you thousands of dollars. Most of us have been in this spot once or twice. So how do you stock up on cars customers want to buy and that salespeople want to sell.

The good news is that with a little hard work and a little smart work you can find the cars you need and keep them rolling in. Much like looking for cars under $10,000 you are going to need some help from your team. Now don’t get me wrong some of these cars are going to have to come from the auction. Whether you buy online or at the local sale, just make sure you look for cars you need. And don’t over pay for them at the sale, if you are going to step up for a car make sure you buy it from a customer in your showroom.

Wholesale-Used-CarsUnderstand Your Used Car Market:

Once you understand your market and the stores history you can start to build a profile of what cars you need. You never want to just go off your history, this will cause you to miss out on selling the customer what they want. If you have never sold a 2008 Toyota Camry in the past, but every customer in your market is searching for one and you follow your history how many 2008 Camry’s are you going to sell? Thats right, ZERO. History is good but you need to watch the market and look for cars customers want to buy. Again its easy to buy the cars you can buy, but that doesn’t mean the customer wants to buy them from you. Its why they are still available at the sale.

So searching for cars the customer wants to buy is half the job. The other half of stocking your lots with the right cars is pleasing your salespeople. Remember they are the ones that have to sell them. If you can’t get the salespeople on board with the cars you are putting on the lot you might as well burn your money. Some salespeople will sell any car you give them, but not everyone is that comfortable with selling used cars. Most of them will walk right around a used car if they don’t feel good about it and can sell a new one instead. You have to get them in front of every used car, this will lift their confidence and sell you more used cars.

The morning bullpen

Bull Pen Cars Lined Up
Used Car Lot Bull Pen Meeting

Now if you’re asking your self how do I get that done, you may want to try bull penning. Running a morning bullpen isn’t that hard but you can’t half-ass it. The last thing you want to do is waist the teams time with nonsense. Its best to have all the work for your bullpen done the night before. You want to have the cars you are going to show lined up, you don’t want to spend time walking the lot. Also you are going to have to do some homework on the cars, start with a list (year, make, model, miles…). If any of the cars are trades have the salesperson that worked the deal talk about the car. It’s a good idea to get them involved. This is a good time to talk about your go-to market price and to find out if the team has any interest in selling these cars.

Now you can’t let the inmates run the prison but you do need their buy in if you want to move some medal. Do your best to have good information about each car, things like service history, carfax, market data and pricing. Let the team help you weed out the bad cars and you will fill your used car lot with cars people want to buy and ones your salespeople want to sell.

Categories
Car Auction Retail Car Lot Wholesale Lot

Should Dealer Groups Have a Centralized Buying Center? 

Centralized Buy Center

Why Centralize your Purchasing?

If you’re serious about reducing the amount of time you spend at the car auction consider a centralized buying center. Central buying or central purchasing, is the practice of relocating the authority and responsibility of a small purchasing team for individualized stores to one location for a whole group. The consolidation of the purchasing function by a large, multi-site organization into a central authority increases efficiency, inventory control, and purchasing power. Central buying is commonly used by multisite automotive retailers, to buy centrally for individual locations. This can be highly effective in controlling inventory levels and improving profitability.

Benefits of a Centralized Buying Center

Centralized buying has the benefits of consolidated purchasing power, standardization of purchases, enhanced professional purchasing skills and easier management of the buying function.

The major responsibilities of a buying center or a trade desk are;

  • Sourcing used cars for purchase both at live physical auctions as well as online.
  • Locating cars to buy from non-auction sites (craigslist, news paper, off the street…).
  • Answering trade calls from sales managers as they work deals.
  • Working with store managers to keep used inventory levels steady.
  • Working with the wholesale manager to move cars to the right locations or to the right auction.

Less Emotional Decision Making = Better Acquisition

Setting up a centralized buying center or a trade desk can make your used car departments run more efficiently. When the emotion is removed from the purchase or trade evaluation it allows the used car manager to focus on the customer, which results in more sales and a higher profit. When you are working a deal, it is easy to become wrapped up in the heat of the moment and push a trade number past the actual cash value (ACV). If the number is delivered from a trade desk or wholesale manager it is more difficult for the consumer to disagree. The same urgency to buy can arrive at the auction. If you are buying cars that you are responsible to retail, somehow you convince yourself it is okay if you pay too much. This is a bad plan if you are trying to make money. This is where the wholesale buyer or trade desk works best. They are given a cap on how much to pay per car and can quickly call back to the store if a new game plan is needed.

This practice of a centralized buying center has been working well for dealers all over the country. Most stand alone dealers will have a buyer or wholesale manager to handle their used car inventory, which does not scale well for larger groups. If you are a multi-franchise dealer group you may want to consider having at least one representative for your different brands (Ford, Chrysler, Imports, GM and High-line).

Staffing a Buy Center:

Staffing the trade desk with two or three individuals that each work with a set of stores or with a specific brand is most beneficial. This gives the buyer better product knowledge and a greater understanding of each market. The team should work together with sales managers as a part of the trade evaluation process, sharing their opinion on what every trade is worth.

Having a solid trade process and a consistent buying plan will keep your lots full of the right cars and improve the bottom line. Remember the more used cars you trade, the less time you will spend at the auction, and the more time you have to sell.