Group Trade is one of the newest features on the CarOffer platform. We met with Nick Gerlach, VP of Dealer Relations to hear why this solution is so powerful.
First thing’s first. What is Group Trade?
NG: Group Trade is our latest solution that allows dealers to move vehicles within a multi-store group that are underperforming. By underperforming, that could mean they are just not the right vehicle for that particular market and would do well elsewhere. And by multi-store group, that could be a traditional dealer franchise with several rooftops, or a group of unaffiliated stores that benefit from private trading on a closed platform.
Group Trade uses a data-driven approach to identify the stores where vehicles are most likely to turn the fastest and generate the most profit, and keep that inventory flowing on the private trading platform.
How does Group Trade work?
NG: First, dealers identify the vehicles they want to move within the group. Then CarOffer analyzes the group's historical sales history and identifies the store(s) where the vehicle is likely to turn the fastest and generate the most profit. Dealers work with our Trade Advisors to set their buy and sell preferences on the platform and as offers come in, they simply accept the deals they want. Once dealers finalize a transaction, CarOffer streamlines the rest. From automatically notifying accounting departments to managing titles and inspections to arranging the transportation to deliver the vehicles, CarOffer keeps it simple and efficient.
What is the heart of the challenge facing dealers when it comes to inventory management?
NG: Group Trade enables dealers to use real, actionable data to determine where a vehicle is likely to perform best and put that information to work. Every car is a good fit somewhere, and most of the time that vehicle is just not located in the right market or on the right lot. When cars show up as trade-ins a dealer can end up “stuck” with cars that don’t fit the needs of the market. Because time is of the essence in this industry, the window of opportunity to make a profit on a used vehicle is tight, so the longer that unwanted trade-in sits on the lot the worse it is for the dealership. Success is rooted in keeping inventory flowing seamlessly.
How does Group Trade help solve this challenge?
NG: Every dealer has a vehicle acquisition strategy. Most dealers have a mark-down strategy where they systematically lower prices until a car is sold. Some dealers have a strict aging policy to make sure underperformers don't linger too long, end up in losses, and tie up capital that could be better deployed on a core unit. The most successful dealers, though, stop an aged unit at its infancy by moving "retail-able" trade-ins upon arrival to the store where it will turn the fastest and generate the most profit. When a vehicle does age, they quickly move it to the store where it is statistically likely to perform the best. Group Trade brings optimization and efficiency to the inventory management process at a group level, supporting multi-store vehicle acquisition strategies and maximizing buying power.
What has the feedback been from dealers?
NG: The feedback has been phenomenal. For the dealers that have implemented this, it has quickly become a critical part of their inventory management strategy. It provides a level of control over inventory that they haven't had previously. We are thrilled that Asbury Automotive, one of the largest auto retail and service companies in the U.S., relied on us to deliver this solution. They said it best: Group Trade “allows our dealerships to keep inventory flowing seamlessly without raising their hand to bid on a vehicle or taking focus away from servicing our guests” ‘nuff said!
To learn more about our new Group Trade feature schedule a 15 minute demo with one of our experts.