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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.

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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
Business Development Retail Car Lot

Do Your Salespeople Know Their Inventory?

Have you ever had a customer leave your showroom without buying a car? Of course you have. It happens every day at dealerships all over the country. We know that not everyone shopping is ready to buy today and some customers can even wait months or even a year before they make their buying decision. While some of the reasons customers don’t buy are out of your control, some may have bumps on their credit, others owe more on their trade than it’s worth or maybe you just don’t have the car that fits their needs. Or do you?

If you have customers leaving over selection you may need to ask yourself, do the salespeople know the inventory? It may be time to start training on it and if you are asking how to get that done I would suggest running a used car bullpen. Getting your team in front of the cars they need to sell will help you pick up sales and stop customers from leaving over selection.

So what is a bullpen and how does it work. A bullpen is no more than taking your fresh trades, off lease or auction cars and showing them to your sales team in an organized meeting, before you offer them up for sale. Now that’s the short answer, so lets talk about what makes up a bullpen. Well, the first thing you are going to need are some cars. The next thing you need are your salespeople. This one can be tricky, some of the team, and you know who I mean will think it’s a waste of time. Others will show up just because you told them to and some will get engaged and participate in the exercise. You will have to show them why this is a best practice in todays industry and what it will do for them. Once you have buy in from your team its time to set up your bullpen.

Here are a few tips to pull off a great bullpen.

Start by running the bullpen first thing in the morning, and I would have them twice a week. You want to keep them somewhat short, maybe 4 to 5 minutes per car and depending on the size of your store anywhere from 5 to 10 cars per meeting.

Picking the cars you are going to talk about doesn’t have to be hard. The sales managers should be reviewing all the fresh cars everyday. Using an inventory stock sheet will help to weed out the cars that you can’t sell (Bad cars or junk cars) and whatever is left goes in to your bullpen.

After you have picked the cars for the bullpen put together as much information about each car that you can. If you use pricing software print out the market data and what you think you can sell them for. Make sure you have a history report about the cars and any service that has been done to the them. This is good if the vehicle was a trade or lease turn in. It’s always a good idea to have the salesperson that took the car in on trade to tell the team about it and the customer. Having a good story goes a long way when it comes to selling used cars.

Organizing and running the bullpen can be done by a few different people.  Having the used car manager or an inventory manager run the bullpen makes the most sense. However having anyone on the manager team will work. It is essential to have as much interaction from all the managers on the team to show how important the bullpen is. As well as having the veteran salespeople’s participation will help make the most out of the time. You may even want to invite your service manager to join in, this will give service an idea on how much work may be coming their way. Plus having a service opinion on the cars may help you from putting problem cars on your lot saving you money down the road.

Remember you can stock your lot with all types of cars, but if the salespeople don’t know what’s out there your inventory will sit like boat anchors.