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

Change is Constant: Dealer Success Requires Business Agility Powered by Technology

When it comes to enhancing customer experience, technology is vital to making the car-buying process as frictionless as possible.

By Cliff Green, CEO of Green 

Used car sales soared in 2020 and 2021 as supply chain issues and labor shortages decreased new car inventories. As car buyers stayed away from dealerships during the pandemic and sales of used cars increased, business boomed for online used car retailer Carvana. However, moving into 2023, things look vastly different for Carvana. The outlook for the company is deteriorating along with falling used car prices, rising interest rates and lower demand.

How Dealers Can Navigate the Rising Cost of Doing Business in 2023

Risks and trends affecting your dealership — and how to work with your insurer to manage costs.

Why Digital Retailing Is Increasing Fraud, and What You Can Do About It

By introducing readily available technologies into the online and in-store workflows, dealers can save themselves a lot of headaches.

8 Questions Dealers Should Ask to Choose the Right VoIP Provider

Unlike traditional landlines, VoIP systems come with powerful features to help businesses make the right impression the first time.

Take Advantage of Super Bowl Viewership to Try New Advertising Strategies for EVs

Interactive CTV ads allow a user to click their remote to set a sales appointment or get a trade-in quote.

Other Posts

Top 3 Ways to Attract Skilled Workers During a Talent Shortage

Today’s companies need a game-changing way to recruit and deliver value to their greatest asset — skilled workers.

4 Ways Technology Improves the Car Shipping Process

New car shipping software solutions reimagine old processes, streamlining and automating routine business practices.

Turn Show-and-Tell into Show-and-Sell with Videography

Boost your fixed ops business by recording a video for your customer-facing service work.

How Window Sticker and Buyer’s Guide Generation Solutions Can Streamline the Automotive Retail Process

To help advance all aspects of the automotive merchandising process, dealers need to have access to software that can easily be accessed from a mobile device, like an iPad, to help streamline window sticker and buyer’s guide generation.