Something That I’d Like Every Velocity Manager to Read…

Here are questions and my responses to a very thoughtful velocity operator:

Dale,

Good Afternoon.  You came and spoke to my NADA class last week. I just wanted to send you an email to tell you how much I enjoyed your presentation. I’m glad I got to ask you a lot of questions during our class because I wasn’t fully convinced of your product. But now that you actually gave a clear presentation of how it can really help us, and how the game has really changed, I’m excited to help get our inventory priced correctly and make more money.

I was just going through the notes I was taking during your presentation and noticed I wrote down some things and I can’t remember what the exact point was. What was the percentage of inventory that you suggested for the first 30 days to be as a good guide? And also, do you suggest pricing those first 30 day units at a certain percentage? We are currently at 99% for 0-15 days and 95% for 16-30, so I’m not sure if that is good or if that needs improvement.

If there is some type of support that you guys offer over a conference call or something I would definitely be interested in getting someone that is well versed with your program to help us. And if your offer to send me a book is still on the table, I would love to read your new book. Hope all is well. Thanks for your time! Hope to hear from you soon.

– Kevin

Kevin,

Thank you so much for your note, and most importantly your commitment to the Velocity Method of Management.  I know that it’s the right approach.

As of today, the percent of your vehicles under 30 days is 54, and candidly that is much better than most.  The top performing Velocity dealers, however, average between 65% and 70% under 30 days.  Based on your present performance, this is an obtainable objective for you.

Second, your price to market today of 99% for the first 15 days, 95% for 16-30 days, 92% for 31-45 days, 91% for 46-60 days, and 90% for 61-90 days is very appropriate.  To be sure however, there is variance from market-to-market and unfortunately day-to-day. Therefore, there are some moments in the market where you may need to dial it up or down.  Also, of course, remember that the lower market day’s supply of you inventory, the less aggressive your pricing needs to be.

A copy of Velocity 2.0: Paint, Pixels, and Profitability is one its way. Further, I’ll make sure that Jasen conducts routine conference calls.  He will also include various members of our experienced staff to provide advice and perspective on specific areas of concern.  Please continue to communicate with me, as I would like to stay in touch.

I also want you to know that we are about to roll out a new tool (no charge) called vAuto Knowledge Network.  The Knowledge Network will allow you to compare velocity metrics such as these with other similar velocity dealers based on size, franchise and peer groups.  Jasen will be in touch with you soon regarding this new functionality.

Respectfully,

– Dale