There are a lot of things you need to do to be successful when it comes to buying cars from the consumer. There may be some things you can get away with cutting corners or not doing at all and still buy cars. But, if you are interested in building a long-term, sustainable, profitable business, you must do this one thing.
Retail!
If the customer has made it to your offer, it’s likely you are not their only consideration. To be able to give the most for a customer's car, you will need to be able to retail it. Gone are the days when you can rely on a wholesaler or the auction (HOLD THAT THOUGHT), and expect to close the majority of consumers' buy attempts. In order to close more customer offers, you will not only need to be competitive, but you will need validation. Your desire to pick and choose which cars you do and do not want to make an offer on will only take you so far. Word will get out about your process.
Next, if you are like most dealers, your motivation to source more inventory from consumers is more than the desire to acquire more inventory. I suspect the desire for more gross profit is a motivating factor here.
The best way to drive profitability for the entire dealership is to “attempt” to retail every car. A retail first mentality allows you to do the following:
- Provide the strongest offer and close more deals.
- Produce revenue in the dealership in ALL departments.
- Generate sales and transaction data, as well as drive the journey to be more accurate and genuine in your experience with the customer.
I will be covering this topic in-depth at this year’s NADA. Be sure to join me at the show. Check out my session, then drop by the booth to see all the cool things we have in store. You can schedule time now.
