Dealership profits are currently at an all-time high. Unfortunately, inventory levels haven’t been able to keep pace. Widespread vehicle shortages are making it tough to take full advantage of consumer demand. And going broke acquiring expensive inventory isn’t the solution.
So, how can dealers keep up with demand without sacrificing profits?
Simple. By sourcing smarter (and more profitably) with an in-house vehicle buying center (VBC).
BENEFITS OF A VEHICLE BUYING CENTER
A VBC is a department of your dealership built for one purpose: private-party vehicle acquisition. In many ways, a VinCue VBC works similarly to the business model popularized by CarMax. And reverse-engineering this model does more than just open up another sourcing channel. It also lets you acquire more profitable inventory for your dealership.
1. YOU CONTROL THE PRICE YOU PAY FOR EACH VEHICLE
Prices increase with every hand that flies up at auction. But when you buy directly from the public, you control the price. This lets you avoid problem vehicles and negotiate deals that are fair to both parties.
2. IT ELIMINATES EXTRA AUCTION COSTS
Auction expenses, like transportation and acquisition costs, end up eating into your gross margin. Sourcing through your VBC eliminates the middleman and helps you hold onto front-end gross with each purchase.
3. YOU CAN BUY THE VEHICLES YOU WANT INSTEAD OF SETTLING FOR WHAT’S AVAILABLE AT AUCTION
Your selection of new inventory at auction is limited to whatever’s available — even if those vehicles aren’t right for your market. Your VinCue VBC empowers you to exclusively stock the profitable inventory you want on the lot.
HOW TO BUILD YOUR OWN VBC
STEP 1: Start with an achievable goal.
Like any new venture, it’s best to start small and grow from there. For example, start with a commitment to buy at least 20 vehicles per month through your VBC. As your business grows, so should your monthly goal.
Even the smallest independents can eventually buy 100+ vehicles per month from the public. Keep at it!
STEP 2: Update your website.
Your dealership website is your first impression with most buyers. The same goes for first-time sellers. Dedicate a section of your website specifically to your VBC that’s easy for visitors to find. Buying a separate domain (e.g., “selltoabcmotors.com”) can also help with marketing your VBC.
STEP 3: Hire full-time VBC agents.
Finding the right cars and buying them at the right prices takes time. That’s why you’ll want to staff your VBC with full-time agents. Look for individuals who excel at communication and customer service. They’re the key to working out the best deal possible with each seller.
STEP 4: Invest in advertising and lead generation.
Traditional marketing channels are one way to reach sellers. However, we recommend using digital marketing tools to target the right audience. Software partners who assist with lead generation are also critical to the success of your VBC. These partners can bring in sellers without you ever having to lift a finger.
USE A VEHICLE BUYING CENTER TO BOOST YOUR DEALERSHIP’S TURN AND GROSS
An in-house vehicle buying center can be a game-changer for your inventory sourcing strategy. It’s the key to boosting inventory turn and front-end gross through more profitable sourcing. And the best part: Any dealership can build its own VBC. It just takes the right tools.
We recommend using an all-in-one dealership platform to help get your VBC off the ground. Look for a tool that includes precision advertising, customizable website templates and market-pricing solutions to help optimize your VBC. For a detailed process, please visit www.dealercue.com.