Wednesday, Feb. 17, 2016, 10:13 AM UPDATED 10:13 AM
When there is harmony between all departments in the dealership, the results can (and will!) Be very impressive.
When meeting with dealers, I often get asked how it is possible for one particular top dealer to do the kind of numbers and the kind of growth they are doing. The top dealer those people are referring to retailed over 1,200 used vehicles in 2015.
That number is pretty remarkable on its own, but when you come to learn that dealer only retailed 400 used vehicles in 2013, the 1,200 number becomes even more impressive. Also, this top dealer retailed more used vehicles in 2015 than new vehicles, and its used retail numbers do not include wholesale units.
Everyone likes to wonder, “How did they do it?” People sometimes assume that the dealership must have previously been underperforming in order to be able to have that kind of turn around.
In my opinion, they were not underperforming. When you compare its new-to-used ratio with that of other dealers, the ratio was above average. You could, of course, make an argument that the entire new-car franchise dealer body in Canada is under performing in used retail sales, but we can save that discussion for a later date.
So, what’s the secret to success? How do the top dealers do it? I’ll tell you.
These dealers buy a lot of used vehicles and then turn around and sell them very quickly. Resist the urge to scoff at this “secret,” and instead take a moment to realize how encouraging that secret is for you. If you are looking ahead to 2016 and beyond — and are trying to find ways to improve on new, used or service profit — then look no further!
There is no trick or silver bullet: It’s just buying and selling, something that we all do every day. You do need to learn how to do the buying and selling in the most efficient manner possible – and all top dealers are aware of the amount of work and effort which goes into properly executing a successful used-car department.
As Thomas Edison once said, “Opportunity is sometimes missed because it is dressed in overalls and looks like work.”
There is no simple way to properly sell a lot of used vehicles. It’s hard work, but don’t let excuses for why it’s not possible for your particular store to double or triple its used-car retail volume infiltrate the conversation.
The only viable excuse is you don’t want to work that hard; and if that’s the case, it’s fine — but own it.
I can assure you that the excuses like your brand, your market, your location, your customers and your staff don’t cut it. If you are set to do the same thing in 2016 that you did in 2015, then you can’t logically expect better results. However, if you are ready to change, here are some good starting points to start you on your journey to becoming a top dealer:
Know where you are
Imagine calling an airline or train station and asking them to get you on a flight or train that will take you to Vancouver. The first question the agent will ask is which city you will be leaving from. Could you picture what the reaction would be if your response was “I’m not sure where I’m leaving from; I just want to get to Vancouver; please make it happen.” We all want to sell more cars and make more money, but in the beginning we need to accurately measure all forms of data to understand where we actually are.
Know where you are going
Let’s go back to our travel situation. This one is easy, right? We want to get to Vancouver. Well, most dealers will just say that they want to get the equivalent of “West” (or North or South depending on where you are when reading this). Where we are going needs to be a specific target or goal and must be based on understanding where you are and what opportunity you believe is possible.
Plan the journey
Great, you’re in Toronto and are going to Vancouver. How? Are you going by plane, train, bus, boat (yes, it’s possible), car or foot? In this journey, there will be many options, but at the core of these options will be people, processes and tools. Make sure you have (or you get) the people with the right set of skills to take you there. You don’t want a train conductor flying you to Vancouver by plane.
Monitor and measure continuously
Use the instruments and tools that will keep you on track, and adjust your path as necessary. There will always be roadblocks and walls to get around. Don’t give up — find a solution and keep going.
Start all over again
Once you land at your goal, you will already understand where you are and, by continuously measuring, you will already know what opportunities exist (there will always be opportunity). Your skills and ability will have improved, and you will be that much closer to becoming a top dealer.
Although everything I’ve mentioned in this article is simple to understand, the end goal isn’t easy to pull off. It requires dedication, discipline and commitment, both financially and from a time perspective. It also requires the establishment of a full-on used-car department with exclusive staff, training, targets and management.
This requires change and a new direction, as most franchise dealerships that I am aware of dedicate almost all of their time and resources to the new and service departments and minimal time and resources, if any, to the used-car department.
Why should you stop treating the used-car department like the red-headed stepchild? Because I believe that the used-car department is the fuel that drives the entire dealership and that it should be the most profitable department in the dealership.
With all of this change and hard work will come great profits — not only for today, but for many years to come; and not only for the used-car department, but for the entire dealership. An efficiently operating used-car department cannot take advantage of the new or service departments and actually can only increase the bottom lines of those departments.
However, both the new and service departments can, and often do, take advantage of the used-car department, to the detriment of the overall dealership. Why? Well, let’s just say that it’s the way we have always done business.
When there is harmony between all departments in the dealership, the results can (and will!) Be very impressive. The top dealers have witnessed this — have you?
Remember, it all starts with you!
Richard Macdonald is the founder of RPM Solutions. Richard provides consulting, training and coaching services to new-car franchise stores to help them maximize their used-car department profits. For more information, Richard at 416-894-1475 or, or visit .