OAK BROOK, Ill. -

A couple weeks ago, used-vehicle manager Betty Ballantyne started thinking about the “wheel of fortune” at Irwin Automotive Group’s Ford and Toyota stores in Laconia, N.H.

Ballantyne says, “We sold four trades against what could have been a mini new vehicle deal. It was unusual that we had that many. It triggered a thought — I wonder what the true impact of the original deal looks like?’”

In my next book, Velocity Overdrive: The Road To Reinvention, I make the case that dealers should fixate less on average front-end gross and focus more on the totality of the business their used vehicle departments generate. As they do so, dealers begin to reap the “wheel of fortune” benefits used-vehicle deals create in their F&I, parts and service departments.

To their credit, Ballantyne and the Irwin team came to this “wheel of fortune” understanding on their own. The following is a closer look at the series of deals that led Ballantyne to track down how a single vehicle sale and trade can set the “wheel of fortune” in motion and boost the dealership’s overall profitability:

 Date  Vehicle Sold  Trade-in  Front/Back Profit  Shop
 March 14  2012 Tacoma  2009 Tacoma  $4,737  $286
 April 28  2009 Tacoma  2004 Tacoma  $7,336  $534
 May 17  2004 Tacoma  2007 Tacoma  $2,502  $677
 July 10  2007 Tacoma  2010 Mazda 6  $3,861  $949
 Aug. 22  2010 Mazda 6  1998 Saab 900  $2,568  $1,217
 Totals      $21,004  $3,663

Note: The dealership wholesaled the ’98 Saab, given it had 136,000 miles and multiple New Hampshire winters.

“It just so happens that everything we took on trade, except for the ’98 Saab, was a nice retail unit,” Ballantyne said. “More often than not, the trail ends after two or three cars.”

She shared the results with the dealership’s sales team to help them understand the “wheel of fortune” that can result from a single car deal — even if it’s what they’d consider a “mini.”

To me, this is the stuff it takes to be successful retailers in today’s environment. In the past, dealers would refuse today’s low-gross deal in the hope that something better might come tomorrow. Velocity dealers like Ballantyne recognize it’s much better to maintain the velocity of your inventory turn to put the “wheel of fortune” in motion.

A final point — I asked Ballantyne about the range of reconditioning costs she noted in her analysis. Some of the lower figures owe to a cost control effort that brings more work in-house. She’s now questioning whether every car needs the degree of reconditioning work the dealership customarily offers.

“It’s another door that’s opened up for me,” Ballantyne said. “I’m going to track this. Some of the vehicles that had less reconditioning work were good sellers.”

Kudos to Ballantyne and the Irwin team for sharing their findings and helping other dealers recognize how the “wheel of fortune” gains momentum and keeps giving.

Dale Pollak is the founder of vAuto.