It happens every year. And every year many dealerships come to the sudden realization that they have too much inventory, or their aging inventory has crept up on them. Now it is fall, and the wholesale prices are doing just that — falling — at an alarming rate, creating an immediate need for a solution. The solution, of course, was to lean used-car inventories back as your operation approaches mid-July and continue a lean inventory operation through mid-September. But between the heat of the selling season and vacations, this scenario seems to elude even the most seasoned veterans every year.
The reality? You've missed the great August sell-off. What can be done? Don't fret. Here are five highly successful options to still liquidate that aging inventory before the complete market correction takes place:
- Re-evaluate the retail situation of these vehicles. Have you and your team re-walked the vehicles before making the wholesale decision? I can't count the number of times that I walked up to an aged used car and quickly saw why it hadn't sold. Our customers probably told our team why as well, but nothing was ever done to correct or fix the usually small issue. So let's not think that aging vehicles can't still retail quickly, provided they look like the stars they should have been in the first place. Also, check the retail price to make certain that it not only reflects the correct price to market, but that it also is priced right given market availability, mileage, color, etc. And while we are at it double check your CRM system for the customers that were in on these vehicles. Make a manager call to see if the customers are still interested in the vehicle(s) or if they know anyone who may be interested at the new lower price(s). This process will often find retail customers who are still in the market and worst case you may sell some other inventory.
- List it online. There still is a wholesale market out there with buyers. Online remarketing is still your best bet. Buyers who are looking for inventory are often seeking specific vehicles. If your inventory fits what they are looking for, there is a good chance a deal can be struck. The best part is you get to keep the inventory on the lot, still attempting the retail approach. Just make certain that it is properly priced to be attractive to online wholesale shoppers.
- List it where it matters. We all know all-wheel drive cars and four wheel drive trucks sell better in the northern states. Front wheel and two wheel drives sell better in the southern states. Now is a good time to start listing vehicles for delivery in those markets, before winter sets in, as the higher values of these vehicles will still look attractive.
- Transportation assistance is like gold this time of year. I don't know about you, but I love transport assistance when it's real. Don't play games with this one. No one likes to buy three vehicles or do this to get that. Make the offer real. This oftentimes is a tipping point when it comes to the buyer saying yes. At the end of the month, the $200-$300 per vehicle will be well worth it.
- Let your finger do the dialing ... you might be surprised! Start calling the dealers in your market place, "What? What?!" you say. Again, you'll be surprised at the results. But like anything, it's how you state or phrase it. If you call around offering the wrong product to the wrong stores or sound desperate, like your job is on the line, then the offers will reflect those perceptions. However, if you make the calls as a gesture of good will — "I got this wonderful car in on trade, but it doesn't fit our customer base (note age is not a discussion point), it's reconditioned and just needs to be at the right store." — now you have a discussion. One of the best parts of this is the networking benefit. Potentially more inventory balancing can be done with your new group of dealership friends. But I can't wholesale direct to other stores you say? No problem. Just one of the auctions that you work with, and ask if they would provide the facilitation services and build your network (and theirs).
I'm certain there are other good ideas out there to consider. Just know that these situations are still manageable, and the potential losses can still be managed before the leaves start to fall. But time is of the essence. Whatever you do be aware that fall is coming. The change may look slow and the fall of pricing gentle, but I assure you the landing can be hard. That's fall for now. And I'll see you in the lens of the lane.