Efficiency and profitability go hand-in-hand, which is why stock turn is critical to dealers. Many within the industry consider around 45 days an acceptable average turnover, but averages mean there are businesses that beat it and those that don’t. Time really is money, so the faster you sell cars, the more you make, and our five top tips will help you sell your vehicles that much sooner.
Cut your prep times
The longer it takes to prepare a car, the lower your chances of selling it quickly and for the best price. The most profitable operations get the ball rolling at the earliest opportunity; they pre-book workshop slots for vehicles in need of bodywork repairs so they get underway as soon as the cars arrive – which is far better than having them sitting around for several days.
The same applies to cleaning: businesses that systematically keep track of what’s coming in when are in a position to get the cars shipshape and ready for sale immediately, dramatically reducing the time to sale. A good form of best practice is to benchmark a maximum number of days between the time the car arrives on site and when it is fully prepared, such as no more than five days for cars with minor bodywork issues and three for those without.
The price is right—or is it?
If you have a vehicle that’s proving difficult to shift, it could simply be too expensive, so it’s a good idea to review asking prices at least every fortnight. There is no shortage of data sources to assist with setting values, but, ultimately, a used vehicle is only ever worth what someone will pay for it, and there will come a point at which it is necessary to reduce the price.
Of course, you don’t want to give it away for a lower price than you can realistically achieve, but the longer you wait, the less it will be worth, so it’s better to generate a small profit or break even than to stubbornly lapse into a big loss.
Fastidiously keeping track of exactly how long your stock has been on the books is, in itself, a good guide for price setting. It’s also a fine indicator of the desirability of similar models, which should naturally inform your future buying habits.
Keep the forecourt fresh
It doesn’t take long for a car to develop signs of sitting dormant, and the longer you leave it, the worse it’ll get. Dust, rain marks and bird droppings are just some of the hallmarks of a vehicle that’s been standing–none of which are likely to reel in buyers–and if you keep the same model in the same place in the showroom, the business will quickly become known as ‘the one with that car in the window.’
Successful dealers regularly shuffle their stock around the dealership to keep the display looking current. It’s also a good opportunity to check for cleanliness, that elements such as price stickers and paper mats are tidy, and wheels and wipers are straight. It certainly doesn’t do the cars any harm to be fired up every now and again, either.
Have a cutoff and stick to it
There comes a point when you need to cut your losses, so introduce a strict disposal policy. Terms of 60 or 90 days before you hand the vehicle over to an auction company are common, but you know your stock and customers well enough to set your own realistic figure.
The most important thing is to be regimented and not to deviate from the cut-off period. Once a car reaches that stage, it has to go, otherwise, it’s going to cost you even more than it already has, and drag out your stock turn average for the worse.
Discipline is key
None of the above methods could be described as rocket science, but they’re all things that easily fall by the wayside in the day-to-day running of a dealership. Implementing such procedures will improve stock turn, but if they’re not enforced and those charged with executing them simply don’t bother, then you’ll still be wondering why your stock is stagnating. A diligent and disciplined approach is always best.