With 2021 behind us, dealers and consumers alike are hoping 2022 offers stability and calmness following a topsy-turvy year. In reality, we can expect many of the trends we saw emerge in 2021 to carry over into the new year, which means dealerships will need to continue to think outside the box when it comes to maximizing revenue.
Luckily, most car dealerships have grown accustomed to today's automotive landscape and have implemented market-conscious strategies that take into account a global pandemic, microchip shortages, and high consumer demand.
Still, turning a profit on used vehicles can be a challenge for dealerships that are struggling to source the right inventory at the right time. Let’s consider some of the ways your business can maximize car dealership revenue in the coming year – and beyond.
Lean on Wholesale
You’ve looked at the market data, utilized the latest resources, and incentivized your staff, but sometimes, aged inventory simply won’t sell. When you’re having trouble retailing your used vehicles, wholesaling can be a viable option to help you boost car dealership revenue.
In the past, dealerships relied heavily on selling directly to consumers. The idea of turning a profit from their wholesale business was more of an afterthought. But given inventory shortages coupled with high consumer demand, dealerships have to think about alternative sources of car dealership revenue if they want to remain competitive.
Wholesaling used vehicles can help you move aged inventory off your lot while minimizing sunken costs. And with the advent of digital platforms that streamline the wholesaling process, you can now move vehicles off your lot quickly and cost-efficiently.
Avoid having funds tied up in aged inventory and open up the channel of
Develop a Smart Reconditioning Process
Put yourself in the shoes of the consumer — if you’re looking to buy a ten-year-old used vehicle, would you expect it to look brand new? Probably not. Getting your cars ready for sale and pricing them properly is a critical step in the inventory management process. Still, dealers often pour more time and effort into reconditioning older vehicles than they need to.
Work to develop a smarter reconditioning process that considers the make, model, year, mileage, and market price of the vehicles you’re touching up. Customers shopping for older cars are likely looking for something reliable and safe. They know what they’re buying, which means you can prioritize the work to be done on each vehicle and streamline tasks and time.
Always make sure that the work you put into reconditioning used vehicles will be worthwhile. It makes sense to put more effort into identifying the work to be done and keeping technicians on task. The result is a lot of time and money savings.
Look to Your Dealership’s Inventory Data
It’s never been more important for dealerships to be in touch with the direction of their markets. Analyzing the value of cars on your lot in coordination with emerging market trends positions your dealership for long-term growth and success. For this reason, you should look to your dealership’s inventory data to get a better sense of where you can boost profits.
The tools you have at your disposal will play a big part in your ability to use inventory data to your advantage. For example, some dealers use appraisal tools to help them determine the value of certain vehicles and what they can expect to sell them for. But certain appraisal tools will only look at market data from the past month, meaning it lags the market and doesn’t truly enable a dealership to make forward-thinking decisions.
Equipped with the right data, your dealership will know how to buy the right inventory at the right time, and for the right price. Boosting car dealership revenue is made that much easier when you can price your vehicles competitively based on insightful data that takes the guesswork out of inventory management.
Utilize a Digital Platform
Buying, selling, and trading in today’s market has become increasingly difficult for dealers. And with no indication that today's challenges will subside anytime soon, dealerships must find ways to simplify their inventory management processes without sacrificing profit margins. Luckily, the above-mentioned strategies can be effectively executed when you have a digital automotive trade platform to streamline your inventory management efforts.
Digital automotive trade platforms can help you reclaim valuable time and money by automating buy orders and expanding your reach to target customers outside of your geographical bubble. They can also provide you with that all-important inventory data that can be used to determine which vehicles you should be bidding on — and which ones you should avoid.
Enabling your business to maximize revenue — both today and in the future — starts with embracing innovative technologies that streamline internal procedures and allow you to make smarter inventory decisions. A digital automotive trade platform helps you do just that.
Give CarOffer a Test Drive
If you’re ready to leave the traditional ways of managing used inventory in the past, CarOffer is here to help. Our dedicated support staff coupled with our advanced technologies ensures we get you the exact cars you need at the right price, and at the right time.
Additionally, we can help you make sense of your core inventory and ensure you’re able to move aged or stale inventory off your lot quickly. Together, we’ll work to bring back valuable time and resources to your business and, in turn, increase car dealership revenue and position you well for long-term success.
Contact us today to request a demo or learn more about our inventory solutions.