Three Pointers To Maximize Purchased Unit Profitability

05.02.2018

I’ve heard more complaints lately from dealers that it seems impossible to acquire wholesale inventory and make the front-end gross profit they expect. Indeed, if you compare the typical Cost to Market metrics for purchased and trade-in units, you can see why some dealers are complaining. The typical Cost to Market range for auction-purchased units […]

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4 Corollaries From the Facebook, Dealer Data Fronts

04.16.2018

I’ve been following the controversy involving Facebook and its user data. The debate and discussion remind me of an issue that’s very familiar to dealers—how dealership data is handled and monetized by some technology partners. To be sure, the particulars of the issues facing Facebook and dealers are different. But there are four apparent corollaries […]

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3 Opportunity Costs You Should Consider Trimming

04.10.2018

As more dealers think of ways to adjust to today’s margin-compressed environment, cutting costs becomes a primary topic of conversation, if not decisions. It’s a good exercise. It points your attention to how you’re spending money. It prompts you to examine whether these investments deliver the return on investment (ROI) they should. But I caution […]

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Margin Compression Takes A Bite—How Will You Bite Back?

04.02.2018

For many dealers, margin compression in used vehicles has been a bit like a leaky water line. The truth is, the line’s been slowly dripping for years. But no one really noticed it until now—after a ceiling or wall has started to bubble, crack or crumble. Dealers’ awareness of margin compression seems to have taken […]

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NADA Day 3: Final Thoughts On A Great Convention

03.26.2018

I heard that there were more than 100 new products offered and promoted through press releases at this year’s NADA—almost double the number from last year. Among them, there were multiple companies offering a variety of solutions you could categorize as part of “digital retailing,” which is intended to help dealers engage and transact more […]

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NADA Day 2: A Telling Conversation and Other Nuggets

03.25.2018

I had the honor and privilege of spending time this week with Thomas “Mack” McLarty, a highly successful third-generation dealer from Arkansas who has also had a remarkable political career, including his service as chief of staff for former President Bill Clinton. I was curious to get McLarty’s perspective on the differences between running a […]

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NADA Day 1: Four Themes To Consider

03.24.2018

I took a fair amount of notes during the American Financial Services Association’s annual conference, and Automotive News Retail Forum events here in Las Vegas. Then, I compared the notes with take-aways from my conversations with dealers on the opening day of the NADA convention. I was curious if the comparison might yield any big […]

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An Emphasis On Efficiency, Innovation at NADA

03.20.2018

I’m ready for NADA. Are you? I’ve been asking that question, along with a follow-up—what are you ready for? The answers I’ve gleaned from dealers all boil down to essentially the same thing: Dealers are hungry for ways they can become better, more efficient, and more profitable. It’s the right answer, particularly as you consider […]

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Part 2: 4 Ways To Mitigate Margin Compression

03.02.2018

If today’s used vehicle market was a house, it’d have a serious structural problem. Let’s say the house had eight-foot ceilings 10 years ago. Today, the ceiling height is probably closer to seven feet, or even less, depending on location. I know the shrinking ceiling analogy is slightly abstract, but it’s an apt way to […]

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Part One: A Troubling Tradition-Minded Trend To Avoid

02.27.2018

In the past few weeks, I’ve noticed a troubling trend in dealers’ used vehicle inventories. The inventory turn rates at these dealers is slowing down. Last year, the dealers consistently maintained an annualized turn rate of 12 times or better. Today, I’m seeing the same dealers post turn rates closer to 10 or even less. […]

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