Ahead of next week’s NADA Show 2023 in Dallas, vAuto is introducing enhancements to its flagship inventory management solution, ProfitTime GPS, which can help dealers achieve “superior” profitability.
Cox Automotive highlighted through a news release that vAuto now incorporates an all-new Variable Inventory Management strategy.
Enhancements include an alignment tool designed to help multi-rooftop organizations identify and improve subpar pricing performance across individual stores, as well as new integrations that make it easier for dealers to source vehicles more effectively from consumers.
“Between inventory challenges and fast-changing market dynamics, dealers are going to need to do more than dust off the old playbook to succeed,” said Derek Hansen, vice president of operations for vAuto.
“Today’s market requires dealers to reach across more sources than ever before to find the right vehicles, and they need real-time data to manage their inventory profitably. That’s exactly what ProfitTime GPS helps them do,” Hansen continued in a news release.
At its core, ProfitTime GPS is designed around the all-new used vehicle strategy called Variable Inventory Management. Evolving beyond the Velocity Method, which encouraged turning all inventory as quickly as possible, Variable Inventory Management tries to deliver a new direction for used vehicle management — one focused on giving dealers a tailored approach that helps them understand and act on each individual vehicle’s profit potential.
Cox Automotive explained ProfitTime GPS puts this philosophy in action by providing dealers with recommended price ranges on every vehicle, every day. It can show which vehicles are “turners,” or ones that should be priced to move quickly because they’re in low demand and high supply, and which vehicles are “earners,” or ones that dealers can hold out for more profit on because they are in high demand and low supply.
“vAuto understands the complex realities of the new market, as well the fact that what made dealers successful in the past will likely not be what makes them successful in the future,” said Dale Pollak, vAuto founder and Cox Automotive executive vice president. “We’ve seen firsthand how dealers who use ProfitTime GPS to execute a variable inventory strategy do a much better job of capitalizing on opportunities in today’s market than dealers who are solely focused on turn.”
A new pricing alignment tool inside ProfitTime GPS’ Enterprise Dashboard, which is specifically geared toward multi-rooftop organizations, can give insights into which stores within the group price their vehicles in an inefficient and suboptimal manner.
The alignment tool can group stores into three different categories based on their pricing performance, which can help them take action to improve profitability.
Furthermore, vAuto also is delivering new integrations within the ProfitTime GPS Global Acquisition Dashboard that can help dealers acquire more vehicles, from more channels, for more of the right money, including:
• Service drive: Dealers who have ProfitTime GPS, Kelley Blue Book Instant Cash Offer and Xtime or VinSolutions can now more easily acquire vehicles directly from their own service drives. With one click on the Global Acquisition Dashboard, dealers can analyze service appointments to identify vehicles that will be profitable in their markets and then send invites to consumers with upcoming appointments to generate their own Kelley Blue Book Instant Cash Offer. For vehicles already in the service drive, dealers can quickly create the offer to share in person.
• Lease returns: Lease returns are another great source of inventory, but more consumers have been buying out their leased vehicles. Now, the connection between ProfitTime GPS and VinSolutions can give dealers with both solutions clear visibility into the pipeline of must have off-lease vehicles. They can now see which vehicles are up for return, understand how those vehicles fit into their overall strategy and decide which ones they want to bring into their dealership’s inventory. That way, dealers can implement a proactive sales process to entice clients into an upgrade before they decide to simply purchase the car at lease end.
• Private-party listings: More dealers have tapped into the world of private-party listings to find inventory over the last couple of years, and they can now easily access even more of those listings to see how the vehicles fit into the dealership’s strategy, thanks to a new connection between ProfitTime GPS and the Vehicle Acquisition Network (VAN), a leading private party solution.
Dealers interested in learning more about ProfitTime GPS and how the Variable Inventory Management strategy can move their businesses forward should stop by the vAuto booth at NADA Show 2023 in Dallas or reach out to their vAuto representative.
Dealers who use vAuto now can take advantage of a new integration involving Stockwave and Ready Logistics.
According to a news release from Cox Automotive, this integration enables Stockwave clients to see shipping costs and delivery times for vehicles at Manheim more easily, so they can take these critical factors into account and make more confident decisions about which vehicles to buy.
“This is another great example of how Cox Automotive is working across brands to make it easier for dealers to find and buy the inventory they need,” said Derek Hansen, vice president of operations at vAuto.
“With the power of Ready Logistics’ data, Stockwave gives dealers even more information at their fingertips to simplify the acquisition process and help them make informed purchase decisions,” Hansen continued in a news release.
With this new integration, Cox Automotive indicated dealers can see a real-time estimate of transportation costs and delivery times for vehicles at Manheim right from their Stockwave Glance, as well as get a detailed snapshot of what their transport details would be. The company pointed out the delivery window is especially important for dealers who are purchasing from a Manheim location they’ve never bought from before, as they can now instantly get an estimate of how long it will take the car to arrive—without having to invest time on the phone.
Additionally, Cox Automotive said this new information can help dealers more precisely understand a vehicle’s acquisition cost, so they can align their business plans with their transportation needs.
Stockwave can give dealers access to vehicles from more than 300 marketplaces, alongside a set of wholesale and retail data, so dealers can find the vehicles their customers want and make more informed purchase decisions.
According to the 2022 Stockwave Purchase Motivation Study, users said they feel their overall capability to source used vehicles is better than other dealers within their market, and users also claim to have seen a notable increase in the number of used vehicles they have in stock after they started using the product. They also claim that their time to research inventory has decreased since they started using Stockwave.
As a provider of full-service transportation logistics solutions, Ready Logistics tries to simplify the supply chain for dealers and make it easy to move vehicles from point A to point B.
Clients who ship with Ready Logistics can benefit from a fully vetted carrier network, advanced technology that provides transparency and analytics on vehicles in transit.
It is a well-known philosophy for any business, but especially in retail, that what gets measured gets improved. However, due to the fast-paced nature of our business, a mistake that I see far too many used car sales operators make is not measuring enough.
Often, this dynamic leads to a situation whereby the store is managing the person, rather than the person managing the store. The most successful used car operators measure everything. This includes inventory statistics such as the number of days it takes to get a car through their shop, average front-end and back-end profits, and reconditioning expense per vehicle.
On the sales side, it includes measurements such as showroom walk-ins, test drives, number presentations, appraisals, manager introductions, closing percentages, and much more.
These dealers measure the customer’s journey from the moment they step on the parking lot and shake their hand, to the moment they drive off the lot in a vehicle — not a single step on the road to the sale is missed. It’s not just a matter of measurement for the store itself.
For best results, it is important to have a well-defined process and measure down to the individual contributor level when able. Have an ideal vision of what the customer experience should look like from the moment the customer is greeted on the lot to the moment they drive off in a new vehicle. Have all the points to the sale clearly defined, set high expectations for each stakeholder and measure execution. Keep it fun! Don’t hesitate to foster competition and make sure to keep score! In this highly competitive environment, these are some of the things that are sure to make your store stand apart from others.
Inventory: Get it presented fast
A used car’s profit window, assuming the vehicle was bought correctly, closes rapidly. The last year aside, if you leave a car unsold for too long, chances are you won't be happy with the result. Every day that a used vehicle stays in your inventory is crucial. The goal is to get the vehicle made ready for sale as quickly as possible and presented in a way that makes it stand out, both on your lot and online — and not necessarily in that order!
Ideally, the vehicle should be listed online before it is even put in the shop. If you have photos that you could use, great! If the car isn't ready for public exposure, no problem. Get that car listed online nonetheless so you can start attracting consumer eyeballs, taking inquiries, and collecting leads.
Consider offering a complimentary, basic inspection report to prospective buyers early in the process and allowing the customer to tell you what reconditioning they would be interested in and what they will pass on. This enables you to negotiate the car price and service work separately. It also allows the consumer to pay for what they value and save money on what they don't! If you take my advice, I suspect you will be pleasantly surprised by the number of people that will come in to see the vehicle in its current condition and drive it away before it has even made its way through your shop. It is a used car, after all, and your customer knows that!
Best-case scenario aside, you still need to get the vehicle reconditioned as soon as possible. Once the vehicle has gone through the shop and is fully reconditioned, you can replace the photos to make sure you are putting your best foot forward.
Key measurement metrics should include:
—How many people are viewing your inventory
—How long it takes to get a vehicle listed online
—How long it takes to get the vehicle into the shop
—Once a car makes it into the shop, how long does it take to recondition the vehicle?
—What is your average reconditioning expense?
—How long does it take to get a vehicle onto your front line?
Measure the performance of your vendors as well. To get your vehicles presented quickly, your vendors must flawlessly execute their part of the process. Analyze everything and everyone! How long does it take Joe the windshield guy to put in the windshield? How fast is the bumper spray guy? How about your technicians – are some faster than others? Do certain technicians tend to overprocess inventory? Or do they under process? Measure every little step, understanding that the goal is to get the vehicle listed online and presented as quickly and favorably as possible.
Know your inventory position
Always be aware of what your inventory is worth today. Some great tools in the market can help you see what the wholesale value of your inventory is compared to what you own the vehicles for. You can even take it a step further and see its value in your retail market. If you own inventory that costs more than what you can wholesale the vehicles for, you are underwater, which is a problem in the event you need to liquidate your inventory quickly. Likewise, if you own inventory for more than its worth in your retail market, then your store's chances at turning a profit are really at risk. It is important to stay on top of the market and your portfolio of investments (inventory) by evaluating how quickly things are selling and for what price. Not every vehicle you purchase will be a profitable investment. The key is to have the tools on hand so you KNOW and can act quickly and appropriately when an asset isn't performing.
If your inventory sells on average in thirty days, but those Corollas you have in stock sell on average in 60 days, you are either:
1. Over-supplied in that vehicle
2. Overpriced
3. There are too many similar vehicles in your market right now
4. It is just not a vehicle you sell well in your store. Either way, knowledge of market and store dynamics will help you make better inventory decisions to ensure you have the right vehicles on your lot.
The best way to make sure you maintain a favorable position in your inventory is to make sure your vehicle appraisers and buyers are dialed in. If you don’t already, I highly recommend you start measuring:
—Your number of appraisals by manager
—Appraisal closing ratio by manager
—Average front-end profit by appraiser
—Average front-end profit by used car buyer (non-trades)
—Return on investment by buyer
—Average turn rate by buyer
You may be surprised to learn that, while the cars that Bob buys generate strong profits, Tom’s purchases have a higher return on investment on average because he uses less of your cash by buying less expensive inventory that performs well. Similarly, you may learn that Joe is burning through appraisals with a low closing ratio, costing you precious trade-in opportunities, new car sales, front-end, and back-end profits, and most importantly, growth!
Sales measurement: What gets measured gets improved
Use technology to hold you and your team accountable and to bring real-time awareness. There are several platforms on the market that help you to measure all these aspects of the business.
Some of the things that should be measured, down to the individual contributor, include:
—How many customers are walking into your showroom?
—How many do a test drive?
—After the test drive, how many people get a quick tour of the dealership?
—Of those, how many get a numbers presentation?
—How many customers meet a manager?
—What percentage had a trade-in that you appraised?
—What is your sales team’s overall closing ratio?
—What is your team’s closing ratio by producer?
—How many inbound phone calls are you taking?
—What percentage of inbound calls convert to leads, and sales, by producer?
—How many outbound phone calls are made? Are salespeople actively hunting for sales?
—What percentage of outbound calls convert to leads, and sales, by producer?
—How many leads does a particular vehicle have?
Technology is your friend
Your competition is extremely clever about using technology to up their game. For example, the largest retailers, such as CarMax, use strategically placed laser beams to count the number of people that break the beam to do appraisals, enter the showroom, and more. It is important to know just how detail-oriented the competition you are up against is. There is a real need to take a data-driven approach to win this game.
Managing a used car department is an incredibly busy job. There are so many things competing for your limited attention and so much to handle at any given time. It is easy to end up in a situation whereby the store is managing you rather than you are managing the store. To be successful it is important to measure everything, delegate the right tasks to the right people, use technology to help better manage those tasks that can be automated and have the right people in the right seats. To your success!
Nick Gerlach, one of Auto Remarketing’s “40 Under 40: Industry” honorees for 2022, is the executive vice president of operations and product strategy at CarOffer. In his role, Gerlach is responsible for transaction and revenue growth and oversees account management, vehicle fulfillment, buying matrix operations, inspection coordination, and the vehicle remarketing team. Prior to joining CarOffer, he held previous roles as director of sales and director of finance for Sewell Automotive Companies, where he oversaw sales operations, inventory acquisition/management and revenue growth for the automotive retail operation.
Rapid Recon is looking to help dealers showcase the high-value features of vehicles currently in their inventory via its latest tool.
On Monday, the originator of reconditioning time-to-line software for dealerships announced the immediate availability of OEM MSRP window stickers powered by iPacket for Rapid Recon users through its Recon Connect interface with dealers’ inventory tools.
By partnering with iPacket, Rapid Recon said it can bring dealers OEM window sticker/vehicle build sheet automation that integrates with most every vehicle manufacturer to autoload unedited, original window stickers or OEM build sheets for your dealership’s vehicles.
Rapid Recon explained data integrity is the overall accuracy, completeness and consistency of vehicle data. Rapid Recon’s authentic OEM MSRP solution powered by iPacket can manage more than 30 OEM sticker automations and more than 10 million OEM MSRP documents, “which come with enormous responsibility.”
Rapid Recon said, “Misrepresenting a vehicle with ‘dirty data’ can be costly to trade appraisals, pricing, and potential legal recourse.”
The company continued, “iPacket only provides MSRP data directly from automotive OEM integrations and never purchases MSRP/ original window sticker data from third-party data providers.
“Dealers should never take a third party’s word that a vehicle’s original window sticker/build sheet data is accurate without verifying for themselves,” Rapid Recon went on to say .
For more details, Rapid Recon users can contact their performance manager or take a demo via https://www.rapidrecon.com/schedule-a-demo/.
