We’re living through a time of strange contrasts in the automotive retailing industry. Thanks to the global chip shortage, dealers are hurting for inventory while seeing record margins on sales. This has put dealers in the strange situation where they’re taking extra steps to cut costs and protect tomorrow’s bottom line even though today’s profits are through the roof — because the one thing we know for sure is the current paradigm isn’t sustainable long term.
The question is, where can dealers go to cut costs in the dealership without inadvertently hurting the business? Taking resources away from key revenue drivers, like staffing or advertising budgets, isn’t the answer.
Instead, dealers have to get creative in finding the sources of waste and inefficiency that fly under the radar, quietly draining profitability from the business without anyone noticing.
One such place is vehicle movement: picking up from or delivering to auction, swapping inventory between stores, transporting to and from a reconditioning facility, or dropping off and retrieving a vehicle for a remote test drive.
How Does Your Dealership Handle Vehicle Moves?
Is the way your dealership handles vehicle moves proactive or reactive?
In other words, do you find yourself responding in the moment as needs arise, scrambling to find available staff and resources to move vehicles, or do you have established procedures and protocols in place to make sure things run smoothly?
This may sound like a false distinction if you don’t typically have trouble finding someone to execute a vehicle move, but consider the following scenario.
Say we have two stores attempting to swap inventory. More often than not, there’s a lack of communication and coordination between the stores.
Maybe Manager A tries to get a hold of Manager B and ends up leaving them a voicemail, or perhaps they just expect a call back. Maybe one store is aware of the swap ahead of time and the other is caught off guard. There are many different variations of this scenario. In all of them, someone’s valuable time is getting wasted, and the cause is a lack of communication, coordination and planning.
Suddenly, a job that could be handled by a single employee dropping one car off and picking up the other for the return trip may end up involving anywhere from two to four employees.
How many drivers should it take to move two vehicles? What more profitable activities could those employees have been tasked with instead? Of course, it should go without saying the more people that are involved, the longer the job will take to execute — an exponential increase in wasted time and resources.
Getting Proactive with Vehicle Movement
Ultimately, the same inefficiency can and does play out with vehicle moves to and from auction, reconditioning or even customers. So, how can dealers get proactive with vehicle movement and root out this resource waste?
The answer lies in addressing the core lack of communication and coordination – or rather, the lack of a centralized communication solution that gives you control over the back-and-forth between stores and individuals.
With a system that centralizes vehicle move requests and opens digital lines of communication between stores, vehicle moves won’t catch you off guard. Preplanning and properly allocating resources becomes a breeze, and you save more money without sacrificing any revenue drivers.
In fact, you create more profit opportunities by freeing up your employees to do profitable work more often.
Take a step back today and consider how your dealership handles vehicle moves. Are you proactive or reactive? Is the way you move vehicles costing you extra money unnecessarily? Perhaps most importantly, do you really know what the average cost per mile is to move these vehicles? The answer is most likely “no,” because it’s not typically measured — and anything that costs money but isn’t measured almost always leads to significant waste.
It’s time to implement a solution that’ll put you back in control of vehicle movement at your dealership — instead of letting it control you.