Three Inventory Management Strategies: Don’t Get Caught Off Guard - AutoSuccessOnline

Three Inventory Management Strategies: Don’t Get Caught Off Guard

With this influx of pre-owned merchandise on the way, it is imperative you have a strong inventory management strategy in place to stay ahead of oversupply and optimize your used car operations.

Most experts have predicted a shift in sales from new cars to used in the coming year. With this influx of pre-owned merchandise on the way, it is imperative you have a strong inventory management strategy in place to stay ahead of oversupply and optimize your used car operations. Following are three inventory management strategies to keep your cars moving swiftly through the inventory lifecycle.

Back to the Basics
With the undersupply of inventory in the last several years, many dealerships have been lulled into a false sense that all they need to concern themselves with is pricing and marketing. Buy it, price it right and customers will come. Barring glaring issues, this model works when supply is tight. However, with supply coming back, moving inventory won’t be that simple. A shortsighted mindset centered only on pricing and marketing has led some dealerships to lose sight of the fundamentals: appraisal process, retail strategy, stocking decisions and effective management of aged inventory. Dealers need to do an internal health check and make sure they are managing their whole inventory process effectively.
Appraise Intelligently
The most common yet avoidable mistake is made on day one: either owning the wrong car or owning the right car for too much money. We all know that cars are depreciating assets with a finite window in which to make you money. You must know the car you are buying. Walk the car. Review the CARFAX reports. Review your sales history and the market data, both retail and wholesale. There is no substitute for a strong appraisal process. If you take in a trade and it’s not a fit, make that decision on day one. Don’t pour money into recon and then arrive at that conclusion on day 45.
Prepare for Oversupply With These Three Steps
With analysts predicting that used vehicle supplies will continue to increase, there are three steps you can take to manage your used-car business when there is an oversupply:Step 1: Be smart about what vehicles you buy and choose to retail. Don’t just look at mileage, condition, age and history. Pay attention to supply, particularly off lease.

Step 2: Be thorough and attentive in how you merchandise and price your vehicles in the market, particularly if they’re in high supply. Don’t price yourself way out of the market on the high side or the low side. On the high side, consumers will question your integrity. On the low side, they’ll think something is wrong with the vehicles.

Step 3: Stay on top of aged inventory, and move swiftly. Increased supply is not a short-term problem. Look at tightening up your aging policy, instituting one if you don’t already have one or have been lax enforcing it. The longer you wait to deal with an aged unit, the bigger the wholesale loss.

You May Also Like

Ways to Save on Credit Card Merchant Transaction Fees

A processor should lessen your workload by handling merchant processing. They should free you up to focus on the customer, while feeling confident that your processing remains compliant and safe.  

By Richard Rodgers, Dannah Investment Group, LLC, and Aaron Cott, TRUECard

Cash or card? Apple Pay? Chip or swipe? Email receipt? These questions are asked of consumers at most businesses today at the time of payment. Credit cards are the primary payment method, requiring business owners to have efficient and reliable machines to process credit cards. Where employers get stuck is by assuming they have no say or option in the merchant fees associated with processing credit card transactions. What if you could find a way to save money each month simply by changing your credit card processing company?

How End-of-Year-Sales May Impact Auto Finance Digital Transformation Strategies

We still have a very paper-driven culture but we need to continue to shift focus to digitization to reduce risk and liability.

The ROI of Giving Back

The key place to begin for any type of giving-back initiative is to determine what drives you and inspires you.

5 Technologies That Have Transformed Automotive Transportation

Recent advances in transportation offer efficiencies for drivers and carriers and provide peace of mind for customers. These improvements often offer cost improvements, as well as reduce liability for the carrier.

car carrier Ship.Cars
Skip the Stip: Lending Without Stipulations

New AI-powered technologies are creating more access to credit opportunities without the need for these stipulations and lengthy supporting documents.

Other Posts

Rapid Recon, Velocity Automotive Close the Trade Appraisal Gap

Appraisers at dealerships using the recon software and VINSight now have quantifiable data to make more informed trade offers.

EV Credits — Are They Worth It?

The industry brings with it environmental benefits, economic opportunities and infrastructure development, but are EV credits the way to go?

Utility Audit: More than 80% of Companies Overpay on Their Utility Bills – Are You One of Them?

Are you paying too much for your utilities? A utility bill audit by a trained professional can uncover errors and overcharges.

Unmasking Double Brokering in Automotive Transport: A Quick Guide

Transport and logistics is not immune to fraudulent practices such as double brokering. Here’s what you need to know to stay safe.

autosled - double brokering