Welcome to 2024! The beginning of each year in the automotive business brings new energy, goals, and enthusiasm. Does that mean we bring new strategies? Too often, we move into the New Year doing the same things and expecting different results. We all know what that means, right? That is the definition of insanity.
When studying dealers, I often see the lack of a defined strategy for acquiring used inventory. Can the old-age method of “I just know what does well in my market” work in today’s climate? I think there is some truth to that, but what happens when some of those units don’t sell and we lose money to get rid of them? Does simply having a healthy stock of your core product equate to success?
What about units that are bought for the sub-prime credit customer? These units are often overpaid for, sit longer, and are priced higher than “normal” inventory. Does our marketing strategy match this inventory? I believe we cannot simply buy these units just to have one in HOPES that a customer falls into our lap and it’s close enough to what they need/want.
Lotpop uses YOUR sales data to help you understand and guide you through these questions. The market data that is out there can be useful when buying, but does it really help you understand your previous performance and velocity on those units?
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In the chart above, this dealer sells their inventory at an average of 101% PTM. BUT… In the past two weeks, sales for intermediate SUVs have sold at 99%. This may not seem like a lot, but what would a 2% change to your bottom line look like? Knowing this info does not mean we don’t buy. It simply is an awareness not to overpay just to have the vehicle. In my humble opinion, cost-to-market management will be a hot topic in 2024 and needs to be discussed more.
-Jeremy Zarfos
Performance Engineer
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