One of the overriding principles of solid vehicle inventory management is that you must know, without any doubt, the vehicles that sell the quickest and provide you the best possible ROI. We all think we know the answer to this but the reality is that most stores do not have real, definitive, subjective data, nor do most of them have a real stocking guider or executable inventory replenishment plan.
We all know that you cannot be all things to all people and the truth is that your store has a specific demographic and personality that has developed over the years. It is a product of your franchise, location, reputation and several other factors including personnel, promotion, price, etc.
When I say “go with the Flow” what I mean is to makes sure your “shelf” contains only those items that have a proven history. If a little is good, sometimes more is better. With the proper tools, you can pinpoint the point of diminishing returns for all vehicle segment and the 7 most recent model years.
Most Dealerships have a “reactive” approach to used vehicle inventory management. By that I mean, they tell me that “I can’t help what gets traded in here”, or “the ones I need are way out of the book”. Statements like this are very common and I hear this all of the time.
The “proactive” approach is much more successful and profitable. When you are absolutely sure that you are right, the decisions come easy. Only stock what you are absolutely sure you need. Test a few “flyers” all the time tamd be sure to measure the “activities” on these. By activities, I mean, Demo Drives, Sales Presentations, Internet Clicks, Etc. Set a pre determined limit of how many days you are going to try these “flyers”. When you get to the limit, cash it and move on to the next test. This method will allow you to find additional niches in your market that you might not have otherwise discovered. “Measure it and Manage it”. Going with the flow is really not that difficult.
Swimming upstream is simply a futile exercise. 😆